As a Western marketer, you may already know just how far ahead of the digital game Chinese consumers are. As one of the world’s fastest adopters of smartphones, e-commerce, and cutting-edge digital technologies overall, it makes sense that Chinese customers are now surging ahead with social commerce; particularly amongst the younger generation of digital natives.

Understanding the Chinese social commerce market

Research by McKinsey has found that social commerce – e-Commerce fuelled by social platforms – has experienced triple-digit growth figures in China over the past five years. [1] It is now one of the biggest marketing and commerce trends in China, and a significant disrupting force that all Western brands need to be aware of.

In fact, a deep dive into the figures are quite staggering. Chinese customers now spend over seven hours each day on mobile internet platforms – a figure that grew by 20pc during the pandemic. Around 60% of this time is spent using content or social apps, with users looking to social media to find recommendations, entertainment, influencer content, and information from friends, in order to help reach decisions about purchases. In fact, 50% of shopping interest is driven from social apps, and 25% of eventual purchases are too. What’s more, McKinsey has estimated that the size of China’s social commerce market will increase over twofold from 2019 figures to hit around 2.9 trillion RMB of gross sales by the end of this year.

All of this comes within a broader backdrop of diminishing bricks and mortar sales and even falling growth of online sales (JD and Alibaba have seen growth in their eCommerce sales drop by around 20%).

The benefits of social commerce

When brands have an effective social commerce strategy, they are able to grow their businesses and brands rapidly and gain immediate access to their target customers, particularly in attractive lower-tier cities across China.

Brands that already have a social commerce presence are already reporting success, with key platforms such as Xingsheng Selected and Pinduoduo seeing growth figures of 233% and 92% respectively in active monthly user figures.

Some of the biggest brands in China are already selling on these platforms, and even new entrants, such as TST Tin’Secrets have used them to build rapidly successful businesses entirely from scratch – and in record time. McKinsey found that new entrants could build up successful social commerce businesses in as little as six months!

What should Western brands do about social commerce?

Firstly, it’s important to note that competition in the social commerce space is ramping up fast, so Western brands should plan to move quickly into the space to gain an early-adopter position which they can then build upon. From this point of entry, success lies in devising an effective social commerce strategy that will allow the brand to position itself for sustainable, measurable growth.

Know the market

There are various models of social commerce, which Western brands need to understand before they make the leap. For example, social-first commerce happens where KOLs are used to direct customers to branded or in-platform stores. Social discounter systems work by incentivising social product shares with incremental price drops per customer. There are community models which incentivise in-network sales by offering small businesses and consumers commissions, and Social DTC models where KOLs and brands use branded WeChat groups to chat to customers and convert them into sales via WeChat Mini-Programs. A Chinese marketing agency can help you to establish the best model for your brand and to put a strategy in place that takes you forward.

Have a clear plan

Western brands should also know that the most successful approaches for Chinese social commerce rely on having a clear and coherent strategy that integrates with all other elements of your digital marketing mix. Off-the-cuff and unplanned content, delivered on a scattered basis, is unlikely to result in a good ROI. To get large volumes of quality traffic that converts, you need to optimise your digital ecosystem, have a strong content plan, know what you are trying to achieve and test, test, test!

Four steps to social commerce success:

Most social commerce strategies will focus on four main pillars of success:

1. Have a clear user acquisition plan, encompassing paid leads through social advertising, social referrals and traffic exchange. Rich social content is a primary route for generating traffic, which can then be fed to private branded WeChat groups and then onward to conversion via a WeChat Mini-Program or Tmall store. The process must be seamless, fun, engaging and intuitive!
2. Carefully manage your online community, using KOLS, brand ambassadors, segmented content and even tools such as avatars to manage your brand reputation and keep conversations flowing. Many successful social commerce companies are using a series of community managers who take on different roles, whether that’s offering product explainer videos, sharing endorsements or promos, or offering tailored advice and support to potential customers with queries.
3. Carefully manage your content flow, from brand-led, third-party and user-generated sources. Lifestyle content is essential to success, but product references must be appropriate, natural and light-touch so that the content truly delivers value, entertainment and meaning to your target customers.
4. Ensure all of your infrastructure works in a seamless way – from your branded WeChat Mini-Programs to your integrated CRM database. This means a lot of testing to ensure that your customers can convert in as few steps as possible, without setbacks such as broken links or slow loading pages!

Get expert help!

We’d also add a fifth step to success – getting expert help from an experienced Chinese digital marketing agency to maximise your chances of success. China’s digital markets are vast, complex and highly segmented, and our team of digital marketing natives possess the perfect blend of digital expertise and native language skills to make your marketing a success.

Whatever your industry and the stage of your Chinese marketing journey, we can add measurable value – evidencing our returns at every stage and working flexibly according to your needs. We can also work on a socially distanced basis as required. Please get in touch in the first instance to discuss your needs and allow us to assist.

Source

[1] China consumer report 2021 – Understanding Chinese Consumers: Growth Engine of the World, McKinsey