The Essence of Referral: Focus on Users Sharing Behavior
Yesterday, I visited the Huasheng Riji office for a learning session and gained some valuable insights. Here’s a brief summary.
Launched in July 2017, Huasheng Riji entered its internal beta phase (the preparatory and development stages are unknown to me). It officially went live in August, with daily user growth reaching 10,000 by December 2017. Around that time, the team expanded from just over a dozen members. In the first quarter of 2018, it secured tens of millions of dollars in funding from Alibaba and SoftBank. By August 2018, its user base exceeded 30 million, and daily user growth now operates in the hundreds of thousands.
Huasheng Riji essentially doesn’t invest in SEO, SEM, or paid advertising. Its core traffic comes almost entirely from user sharing.
Now for the key takeaways:
Huasheng Riji highlights four or five core advantages, but in reality, only two truly matter:
The first is product diversity. Leveraging Alibaba’s Taobao and Tmall as its product database, whether it’s personalized recommendations for individuals or mass customization, you can find any product you want here.
The second is the business model, centered on sharing. By incentivizing users through profit distribution, the entire product’s core logic revolves around sharing. (Users earn commissions by sharing; throughout the Huasheng Riji app, sharing prompts are omnipresent.)
Zhou, who oversees operations for Huasheng Riji, repeatedly emphasized during the presentation that their model is “OSO,” where “S” stands for share.
User sharing behavior is the core. Every minor feature and operational logic within Huasheng Riji prioritizes sharing driven by financial incentives. (In its operational design, each user is assigned a unique ID. When they share a product, it carries their personal parameter tag. If someone makes a purchase through their link, the sharer earns a commission: sharing a coupon earns commission, sharing a product earns commission, and sharing to WeChat Moments earns bonus cash.)
It’s widely said that social e-commerce is the traffic dividend of 2018, and many are experimenting with viral fission. The fundamental logic of fission is user sharing behavior:
Think of it this way: If a user buys something but doesn’t share, the spread is zero. If they recommend it to a friend based on word-of-mouth, the spread becomes one. If they share it in a group chat, it’s at least three. If they post it on their WeChat Moments, it’s at least 100.
The potential reach is obvious.
Content e-commerce operates on a recommendation model; Pinduoduo’s social e-commerce is group buying; Huasheng Riji uses CPS (Cost Per Sale) sharing.
Content e-commerce drives conversions by creating problem scenarios and offering solutions through content. Pinduoduo relies on bargain-hunting and group buying (one-to-one communication). Huasheng Riji takes CPS to the extreme, with profit distribution focused on the sharing act.
I’ve seen many fission campaigns, but if yours isn’t working well, it’s usually because you’re focusing on the wrong core element.
There are only two critical points for fission: the incentive driver (cash appeals to a broader audience than single products, which have niche audiences), and the sharing mechanism (how easily users can share and how wide the reach is).
If there’s a third point, it’s the psychological barrier for users—how much resistance they feel when asked to share.
Multilevel CPS distribution:
The appeal of CPS lies in its referral-based distribution model. Multilevel distribution can edge close to pyramid schemes, but mastering this means recruiting a loyal, stable workforce for free. For example, some news apps continuously recruit下级 agents, Huasheng Riji uses tiered levels, and many gray-market businesses employ similar distribution tactics. If you’ve encountered these, you’ll understand.
The simplest example is micro-business (WeChat commerce), constantly recruiting new members to build downlines. (Many such schemes rely on permanent binding relationships.)
In summary, Huasheng Riji uses CPS to attract loyal spreading users (recruiting followers) and leverages profit-driven sharing to create a sharing economy.
There are three core elements here: the product itself, which determines audience size and whether you can build substantial scale; the CPS binding relationship and profit distribution, which determines how many loyal spreaders you’ll attract—these are your stable, deep fission traffic; and the non-binding sharing model, which generates marginal fission traffic.
The essence of fission is binding social relationships and sharing to amplify reach.
The logic of fission is to first identify the incentive driver (the benefit you provide users is their motivation to share), then the social sharing point (Pinduoduo’s bargain-hunting targets close one-to-one relationships, while sharing to WeChat Moments targets strangers, resulting in different diffusion scopes).
The stronger the incentive and the broader the audience, the more successful the fission.
Let’s touch on some other points.
The product must be good.
During the sharing session, a friend mentioned that many KOLs will advertise even for free—if your product is good enough, they’ve encountered this multiple times. Content creators on Douyin and WeChat Official Accounts have offered free promotions.
Therefore, foundational product quality is paramount and will generate many marginal benefits. For instance, I’d naturally try to recruit them as distributors.
The套路 of paid advertising.
A friend working on Colgate advertising campaigns explained that preparation is essential before launching ads.
Build reputation first, prioritize content, and start with product reviews—gather many positive user evaluations before producing product review articles.
Only after that should you invest in paid ads. Don’t target major KOLs; instead, use everyday users. For example, on Xiaohongshu, they selected 108 regular users with a combined follower count under 200,000, yet managed to get the product featured on the app’s homepage.
Use volume to counter the platform’s recommendation algorithm.
Conversion rates for e-commerce ad spend:
1:3
1:5
are already considered quite good.
Most ad spend conversions fall below 1.5.
Conversion rates on JD.com and Alibaba platforms are even worse.
We strive to build reputation and deliver excellent service. Beyond driving repeat purchases, the underlying reason is to encourage users to share with others and bring in new customers.
Driving user sharing is the top priority for reducing customer acquisition costs.
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