In most of the world, ecommerce means 3 things: emarketplaces, etailers and brands own ecommerce platforms. This is almost completely different in China, and understanding the Chinese use of social media for ecommerce means that we must first look at how the Chinese purchase goods online.
Understanding how ecommerce works in China
In China, emarketplaces are king. Ecommerce is dominated by 3 large emarketplaces; TaoBao, Tmall and JD.
Both TaoBao and Tmall are owned by the world’s largest online retail group; Alibaba. TaoBao is a C2C marketplace, much in the same way that eBay is. However, where eBay is predominantly auction based, TaoBao would be predominantly “buy now” based. Tmall is a B2C marketplace, where brands and retailers can list their products for sale. JD is like Tmall, as they operate a B2C marketplace.
This focus on emarketplaces is the key difference between Chinese ecommerce and what we are accustomed to in Europe and the US. This difference means that Chinese consumers are used to purchasing through platforms, and not, from brands or retailers directly.
This means that, while in our own ecommerce environment, we trust retailers and brands, Chinese consumers trust buying through a third party.
Social and Ecommerce
The difference in purchasing habits has led to an openness to buying through third parties, that is only just beginning to penetrate our own ecommerce ether. In this way, the evolution of Chinese ecommerce is further down along the path than we are.
Digital social interaction in China means one thing: WeChat. WeChat has over 1.1 billion registered accounts, 732 million users, 570 million of which use it daily.
WeChat is a hybrid of a messaging platform (like WhatsApp), social media platform (like Facebook), ecommerce platform (like nothing we have), and a whole load of other features.
Facebook are trying to bring this idea of purchasing through social media to us, with Facebook Stores. However, it’s penetration is virtually non-existent compared to that of WeChat.
It would not be uncommon for someone in China to be running low on milk, only to open WeChat, scan the item and order it online – all through WeChat.
What areas of WeChat should I know about?
Think of moments (somewhat) like Facebook. It is a semi-closed social media platform; therefore, users must become friends to interact.
More importantly, from an ecommerce perspective, you can advertise. This gives you the opportunity to show content to not just the people your brand is connected to, but to a wider audience.
Think of how much revenue you generated through Facebook ads in 2016, well, China’s ecommerce market is almost 10x the size of the UK’s. Do I have your attention?
This is what your consumers use to buy things, just like the above milk example. It not only merges on and offline, however, you can use it to buy all sorts of things. Need a taxi, crave a McDonald’s, got to top up your utilities, want to pay a friend? Wallet!
It is worth noting too that WeChat’s parent company has a 15% stake in JD, this means that JD is featured on WeChat allowing for 32% of ecommerce transactions on the platform.
WeChat is far broader than what we have mentioned here, and we have barely scratched the surface of the differences between our own digital social habits and those in China.
The Chinese landscape for both ecommerce and social is so different from what we are used to, that any brand arrogantly attempting to enter China without doing proper and comprehensive research is guaranteed failure.