This year’s Singles’ Day confirmed yet again the dominant spot that Alibaba enjoys in China’s online retailing boom.
Yet other forms of online commerce — in particular, messaging app WeChat — are gaining traction as more consumers seek a richer online shopping experience. Such shopping, where products are presented alongside related lifestyle articles, tutorial videos, or other forms of content, is proving popular among a growing customer base that is looking for more than just low prices.
A 2016 survey by consultancy firm McKinsey & Company shows strong growth for shopping on WeChat, owned by internet giant Tencent, with some 31 percent of the messaging app’s users making purchases on the platform — double the proportion of the previous year. Impulse-driven categories like apparel and personal care are most popular among WeChat shoppers. Within those categories, between 25 and 30 percent of all e-commerce transactions occur on the messaging app, the report said.
The simplest way to get a foothold in online retailing through WeChat is by selling to a user’s own personal network of friends and acquaintances.
Tong Jia, a former creative director with advertising agency Leo Burnett in Beijing, sells vegetables produced on his own organic farm on the outskirts of the city to his 2,000 or so WeChat contacts through Weidian, a Tencent-backed website optimized for accessibility from within messaging apps like WeChat and QQ, as well as microblog platform Weibo.
But the bigger e-commerce opportunity comes in the form of public accounts on WeChat. As the name suggests, the general public can subscribe to WeChat public accounts, opening the sales channel to a larger market.
The shopping experience is markedly different to that provided by conventional e-commerce platforms like Alibaba’s Taobao, where users tend to access the website with a particular product already in mind — though they are of course inevitably distracted from time to time. With WeChat, however, customers take a back-seat role, receiving content as it is pushed to them from the accounts to which they have subscribed. After engaging with that content — a lifestyle article written by a vendor that showcases their product in a real-life context, for example — the customer then has the option to click through and make a purchase.
Such a novel methodology means the platform lends itself especially well to launching new, unusual products with which many Chinese may not be familiar, and thus may not be proactive in seeking out themselves.
For example, in April the WeChat public account “Yu’s Gourmet Delights,” run by Shen Tongyu, a former journalist at Chinese state broadcaster CCTV, posted a video showing how to make a Belgian-style waffle. Within one day, the clip had attracted 50,000 views, and the store’s 500 waffle irons had sold out.
Another vendor using such an account is 24-year-old Beijing native Wang Houhou, who started blogging about fashion on social media platforms two years ago and has published three books, including one on fashion and lifestyle.
After graduating from college in the U.S., Wang returned to China and set up the public account with her business partner and go full-throttle into online retailing. Now, her WeChat account has more than 35,000 followers and sells around 100 accessories and articles of clothing per week. Wang herself models the items, which are normally accompanied by detailed product descriptions. Customers can pay through WeChat’s electronic wallet feature, or by using the Alibaba equivalent, Alipay.
Wu Xincong, a 24-year-old from Beijing, recently bought a brown lattice shirt with exaggerated bishop sleeves from Wang’s online store. Wu has been a fan of Wang for more than a year. “She has her own independent aesthetic manner and values,” she told Sixth Tone, referring to the young entrepreneur.
A spokesperson for Tencent, WeChat’s operator, said in a written statement to Sixth Tone that “WeChat is a way of life,” and that the company respects any users who set up businesses through the platform, provided they do so in accordance with the law.
Figures from the Internet Society of China, a government-affiliated association that provides data on internet use, show that around 182 billion yuan ($26.3 billion) in sales were generated through social shopping channels like WeChat, Weibo, and QQ in 2015. According to the industry association, that figure will more than double this year — but even so, the volume of sales of such channels fall well short of that generated by e-commerce giant Alibaba, whose sales in the 12 months leading up to March 2016 reached 3.1 trillion yuan, an increase of 23 percent from the same period in the previous year.
Alibaba’s model — an unimaginable range of products and services at astonishingly low prices — may have made it the leader of the pack, but the company has also shown interest in the content-based approach heralded by WeChat. In September 2015, Taobao — Alibaba’s premier e-commerce platform — announced a three-year plan to set aside 2 billion yuan in cash injections for vendors who offer so-called scenario-based marketing for their products, referring to content that situates products in contexts relatable to the purchaser. Content creators who post automatically matched links to the products they refer to in their articles or videos may then collect commissions. In May this year, Taobao launched a live-streaming feature where vendors can extol their products’ appeal to prospective customers in real time.
Industry observer Bai Bei believes that WeChat has its work cut out for itself. “WeChat’s conversion rate is very high,” said Bai, who is head of Tuiwu, the content-based ecommerce branch of social media monitor New Rank. Customers might be more likely to click through an article or video and purchase the advertised product, but the fact remains, said Bai, that vendors on WeChat struggle to reach as wide a user-base due to the enclosed nature of messaging apps. “WeChat’s e-commerce ecology is huge, but the content provided by individuals will struggle to expand because the channels for such content are limited.”
“The most successful WeChat accounts now are making 10 million yuan in sales each month,” Bai said. “[In China] that’s still a relatively small amount.”
Header image: A WeChat user views jewelry product listings on the app’s Moments feature in Shanghai, Nov. 9, 2016. Chen Cheng/IC)