Zeng Ying, a senior project manager at Chinese e-commerce platform Youzan, made the point at a recent summit organised by HPA China in Shanghai.
She said that sharing content through platforms such as The Little Red Book, Tik Tok, Kuaishou, and WeChat was an important step for firms to market their products and that major players such as Wahaha and BY-HEALTH had already jumped on the bandwagon in recent months.
“The traditional retailer’s job is to recommend a product to customers but for WeChat business owners, it is to recommend the health food products amongst their circles of friends…People trust the recommendations on WeChat a lot because they are real life examples,” she said.
Citing beverage brand Wahaha as an example, Zeng said that its membership-based social e-commerce model had been successful in attracting 170,000 members within three months after its launch in December last year.
Under this model, users can start buying Wahaha’s products and recommend it to other users after paying a membership fee of RMB$98. Recommending a product also allows a user to earn sales commission.
Likewise, BY-HEALTH also launched a mini application on WeChat, where there are limited time frame for special discounts and group buying promotions, which in turn helped to drive product sales.
The social e-commerce phenomenon is a rising star in China’s e-commerce scene. Last year, the scale of social e-commerce was RMB$967.2bn (US$140.7bn), which was an annual growth rate of 59%.
E-commerce, on the other hand, was estimated to worth RMB$10tr (US$1.45tr), growing 30% on a yoy rate.
However, it is important to note that the new Chinese e-commerce rules introduced last year require business owners to apply for a business license. Conducting business without the license is illegal.