Did you realize that China is presently the BIGGEST eCommerce sector worldwide? One of the major forces that has caused social commerce in China to become so prominent is its development.
Consequently, if you aspire to have a successful relationship with Chinese customers in such an intense market, you should thoroughly explore how social media influences people and how it impacts their shopping decisions. Everything can be found below.
How Big is Social eCommerce in China?
China is the leader in the eCommerce industry and also has the most sophisticated social commerce market globally. For 2021, the scale of China’s social commerce arena has grown to 2.5 trillion yuan, equivalent to more than 374 billion dollars, with a user base of almost 800 million.
Social media is something that is heavily ingrained in people’s daily routines in this country, as it is in many other places. But, to a much more immersive extent.
As of 2021, Statista reports that around one billion people are using social media. China has firmly secured its position as the nation with the greatest number of people using social media! It is estimated that by 2026, the amount will approach around 1.3 billion.
Furthermore, the typical Chinese web user invests approximately 5 hours and 15 minutes on the web every day, almost half of which is devoted to exploring social networking websites. It is not only a tool for talking and staying informed.
Social media offers great opportunities to investigate, compare, and buy products and services. Furthermore, discovering bargains and sales is effortless and quick via these platforms. A 2020 survey showed that more than seven out of every ten Chinese shoppers preferred to purchase goods through social media platforms. The rate is significantly higher than the worldwide norm of 42%
How come? The level of progression of the market is responsible for the Chinese population’s receptiveness to online and social shopping. eMarketer has observed that China’s adoption rate of social commerce is increasing much more quickly than the rate of growth in the United States.
It appears that eMarketer anticipates that China is likely to remain the leader in terms of sales and growth rate in the upcoming future. What are the main factors driving the expansion of social commerce in China?
Why is Social eCommerce so Successful in China?
Established & Saturated eCommerce Market
Keeping abreast of the eCommerce landscape in China would reveal that it is highly evolved and has now become congested.
Brands encounter strenuous rivalry in the public setting in public commercial centers, for example, Tmall, JD.com, and Pinduoduo. It has been estimated that approximately 80% of the total market of B2C retail platforms is taken up by the top 3.
Considering the increasing expense of obtaining new customers, businesses are looking for different ways to attract individual visitor traffic. This includes traffic to:
- Their branded website (.cn)
- Their WeChat Mini Programs (MPs), a sub-application inside China’s top social media/messaging platform WeChat
Put simply, platforms like WeChat are providing a remedy to reduce the troubles that China’s e-Commerce market is facing.
As has been noted previously, the typical Chinese user of the Internet devotes a significant amount of time to exploring social media while online. And they do not just access them at home. The very large proportion of people in China that have a cell phone allows them to remain connected and socially active regardless of their location.
Consequently, social media has been effortlessly integrated into people’s day-to-day lives, both on and offline, with WeChat leading the way. Take a look at this customer journey, for example:
- Use the regular messaging function and WeChat Moments feed to keep in touch with friends
- Access WeChat Official Accounts (OAs) and Mini Programs to contact and enjoy different brands’ services
- Utilize WeChat Pay as a digital wallet for both online and offline purchases
- Make use of the QR code scanning feature on the app to scan any code they approach
Chinese people usually spend a lot of time interacting on social media, allowing them to connect with their acquaintances, relatives and other people who are online.
Thus, social media platforms can serve as a valuable touchpoint for brands to effectively:
- Reach customers
- Facilitate purchases
- Serve them at any stage of the consumer life cycle
Additionally, businesses may gain advantages from people discussing their products or services by using the programs. Customers can effortlessly broadcast product/service information and evidence of involvement with the brand through the same platforms!
Ease of Use & Convenience
A key reason for the widespread use of social e-Commerce in China is its convenience; users can make a purchase without having to exit the application. The features that facilitate this ease of use include:
- One-click registration/login
- One-click purchase
And this is even more true for WeChat:
As an illustration, WeChat APIs offer a one-click authentication process, granting people the ease to sign on or log in for obtaining a service or buying something inside the WeChat universe. Once they select it, the system will fill out any data that has been registered previously (like name, telephone number, address) which is held on WeChat.
Moreover, the “Purchase” button is cleverly inserted throughout the platform, from H5 ads to streaming videos. Using this feature, anyone can buy whatever they want with just a few clicks at any time. The lack of pain associated with buying things on WeChat has made the social shopping platform in China very well-liked.
The ease of using the WeChat Pay digital wallet is an important factor. Less energy is needed to be sent to a different page or system. In this way, it provides further encouragement for users to purchase items within the same system.
Tendencies of the Main User Base
And that is not all. This prospect for social commerce proliferation occurred perfectly in line with the emerging and existing customer bases in China – Millennials and Gen Z – providing a desirable solution to their requirements. By the year 2016, both Chinese Millennials and those in the older Gen Z demographic made up more than half of the nation’s digital purchasers.
They don’t particularly enjoy being marketed to through traditional advertisements. Consequently, creating innovative material and interacting on the social media platforms that the most active demographics prefer, enable brands to form an enhanced, vivid, amusing, and more personal connection with these demographic groups.
In addition, their behaviors should be noted as well. Generally, those in younger age groups tend to have a more intense enjoyment-seeking mindset. They treat themselves by engaging in activities that bring enjoyment, such as shopping.
A McKinsey report released in 2020 revealed that Chinese shoppers can be highly impulsive, far more so than their counterparts in other nations. Out of the groups surveyed, the Chinese members of Generation Z showed the most impulsive responses.
In addition, these young customers are more likely to exceed their spending limit. It is rumored that the amount of money this group of young people spends per year on luxury items has now become comparable to that of Gen Xers.
However, customers are also quite strict about the type of shopping experience they expect. They have a preference for:
- Social-fueled and technologically driven experiences over traditional settings
- Unique customizable products and services
- Loyalty to the brands they like/know
- Omnichannel shopping experiences
- Word-of-mouth recommendations
We should take a look at the top three social commerce platforms and discuss why they should be considered when it comes to using shopping apps in China if you’re looking to do e-commerce.
#1. XiaoHongShu – Instagram, Pinterest, and Amazon in One!
XiaoHongShu was established in 2013 and has gained tremendous recognition in recent times. The Chinese title “XiaoHongShu” translates to “Little Red Book” in English, yet in English-speaking nations it is known as “Red”. When it first started out, the platform acted as a social media page where users could give advice about international shopping and also give their opinions on fashion and beauty merchandise.
In 2014, the platform became equipped with e-commerce capabilities, making it one of the earliest and most widely-known Chinese websites for social commerce. Since then, various renowned internationally recognized companies have used the platform to bring their items to the Chinese market.
XiaoHongShu experienced a huge rise in popularity in 2015, increasing the value of its goods and services per six-month timeframe from one million RMB to more than one hundred million RMB. As of the start of 2019, there were in excess of 200 million frequent users of the platform on a regular basis.
XiaoHongShu As A Social Commerce Platform and One of the Largest Shopping Apps in China
XiaoHongShu offers a variety of features to draw users in and keep them engaged, such as reading, liking, and making purchases. XiaoHongShu has not only become an e-commerce platform, but it has also been able to draw in users because of its social capabilities. This is beneficial to marketers since it can help create a buzz around the product and enhance the potential for the product to become a phenomenon through a content-driven marketing plan.
The impact of word of mouth can be clearly seen on the XiaoHongShu platform, with the most trendy posts and products getting an abundance of likes and shares on different platforms. XiaoHongShu is a special type of social media platform in China, as it allows people to share posts outside of the application to two of the nation’s biggest social media networks, WeChat and Weibo, in order to reach more people.
#2. Pinduoduo: Where Group Buying Meets E-Commerce
Pinduoduo has been making quite the stir in the Chinese digital environment if one hadn’t been paying attention. Pinduoduo pulls together elements of the group-purchasing features seen on apps like Groupon and provides customers with a fully-fledged e-commerce atmosphere equivalent to other sites such as T-Mall, Taobao, and Amazon.
Pinduoduo was established not long ago, launching the website in 2015. Pinduoduo saw the quickest expansion ever recorded for any e-commerce business in China, reaching of a GMV (Gross Merchandise Value) of more than RMB 100 billion within merely 2 years and 3 months since its commencement. Jingdong took four times longer to achieve an equivalent Gross Merchandise Value as an example.
Pinduoduo – Social Commerce For Bargain Hunters
Pinduoduo’s great success has been attributed to its social commerce features, which drive people to share posts and products, give reviews, and simply open the app to be rewarded with discounted prices and freebies.
These incentives are meant to broaden the reach of the platform and entice people to buy something. Given the large reductions available on the website, a large proportion of the items sold on the platform are bought on a whim. Acknowleding this form of user interaction, Pinduoduo commenced incentivizing users to even just have a look at their daily offers, by offering rewards for opening the app, as this could lead to many purchases.
The greatest advantages of using the platform are accessible only to those who utilize the social features to their full advantage. When a collective purchasing campaign is running, consumers get a link which they can pass on to their buddies. If users share the provided link and succeed in convincing others to buy something, they will receive discounts or even a complimentary product if they get enough referrals!
Given that Pinduoduo caters to rural areas where customers tend to prioritize affordability, its features contribute to its strong customer loyalty.
3. WeChat – The Social Media App in China That Does Everything
It’s unsurprising that Wechat is one of the most effective social commerce sites in China, considering it holds sway in almost every field from adverting to digital shopping. WeChat, frequently known as China’s answer to Facebook, has become vastly more than just an application for social networking!
WeChat’s Social Commerce Features
WeChat possesses three features that produce social commerce features– WeChat Stores, WeChat Mini-Programs, and The WeChat Good merchandise Circle.
Since the arrival of WeChat mini-programs, the classic WeChat store function has become less popular due to its increased personalization and additional features. WeChat Official Accounts can be used to host mobile websites known as WeChat stores. These stores are linked to the WeChat Account.
WeChat mini-programs are like apps that allow users to use app-like features without leaving the WeChat environment!
Enormous progress has been made with WeChat Mini-Programs during 2018 and 2019. When mini-programs first came out, there were many who didn’t think they would be a success, and had a bumpy beginning. Nevertheless, Tencent has pumped immense amounts of money into the space, providing backing to developers and businesses ready to explore this updated feature, which in turn has led to an increase in utilization.
The WeChat Good Product Circle
The WeChat Good Product circle was launched in early 2019, making it a very recent addition. Tencent recently made a large update to WeChat, called 7.0. This included a new tool known as the “shopping list”, which made it possible for users to store any items they locate in WeChat mini-programs.
The WeChat Good Product Circle basically allows users to observe what other individuals have bought. Users can easily observe what is popular among their peers by taking a look in the discover section, which displays three sections: “recommended products,” “everyone bought,” and “circle group”.
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