China is Connecting Social Media and E-Commerce Better
The rise of live streaming in China is enabling small businesses and consumers to improve E-commerce adoption. It’s a meta trend that’s typically called ‘social commerce‘.
Lessons in the Future of Retail, From China
Social Commerce in 2020 in China has entered a golden age. Micro video apps like Douyin, Kuaishou, Alibaba, Mogu, and so many others are changing how video interacts with shopping. China is doing a better job at connecting the dots between live streaming, gaming and the attention economy of its internet with E-commerce sales in general.
Social Commerce in China has come a long ways since 2018.
Social commerce has been far more prominent in China than in the US. To put that into perspective, social commerce sales in China totaled $186.04 billion (RMB1. 285 trillion) in 2019—nearly 10 times the number of sales in the US, which reached $19.42 billion last year.
Here then is yet another domain where Chinese consumers are more mobile native and young people are more involved in consumerism directly, not just as passive shoppers. It makes a world of difference for China’s varied apps market and how they introduce pragmatic utility into their product. The utility in the apps ecosystem of China vs. the Ad emphasis in America is striking.
China’s ecosystem appears much more consumer-centric, rather than relying on businesses to pay to reach consumers. This may be the central flaw of the American internet, controlled by monopolies like Google, Facebook and their shady companies like YouTube and Instagram.
Investment in the social commerce space by Tencent’s WeChat—particularly with the 2017 launch of its light apps called Mini Programs—has certainly helped garner trust and bolster usage among the general public. Chinese mini-programs are gateways to light versions of apps and ByteDance has emerged as a leader in China’s attention ecosystem with the best AI in apps.
China’s social commerce approach to retail is the future of retail and for small business retailers it’s fairer than Amazon’s bulldozer approach to E-commerce sales. The use of social media in the context of e-commerce is gaining traction in China. The booming mobile generations and the accelerated growth of social media usage are fueling the growth of social commerce. Pinduoduo and JD have really pushed innovation forward, not only Alibaba, obviously.
In comparison, Instagram, Walmart, Amazon and Shopify have for the most part failed in any resemblance of social commerce at scale. Think about how young consumers learn to shop online.
Social commerce revolutionizes consumers’ purchase journey. Social media is now an integral part
of consumers’ daily lives. It not only is a platform for consumers to look for product information and share
experience but also a popular marketplace for consumers to buy online. Young consumers, in particular,
are more likely to make purchases on social commerce sites based on friends’ or KOLs’ recommendations.
American Technology’s Reliance on Advertising: a Bottleneck to Social Commerce Innovation
Google and Facebook’s duopoly based on Ads actually blocks social commerce innovation in the United States and Europe. This is making both China and later India more innovative in app development. This bottleneck is so considerable that Asia wins the future of retail by default, no matter how big or good Amazon becomes.
A majority of social buyers in China are shopping via their mobile devices. And many digital storefronts start off on mobile layouts—whereas in the US the inverse is true. Covid-19’s retail destruction in stores thus impacts U.S. retailers more than Chinese retail brands. U.S. consumers just shift more of their spend to platforms like Amazon, which aren’t particularly good at implementing social commerce in their customer journeys.
What you have to understand is America has no equivalents to what Chinese is doing in retail technology and mobile innovation around social commerce. Pinduoduo, which loosely translates to “together, more (savings), more (fun)”, started as an e-commerce Mini Program store on Tencent but evolved into social commerce with its group buying model which has a big social buying element in that buyers are encouraged to share the product with their friends (on WeChat) in order to build a team, buy together. and secure heavy discounts.
China is doing social commerce better because its mobile apps actually lead to better access to experiences, immersion, customer journeys, products, services and convenience. It’s not just about an attention scam to boost empty Ad sales.