Comprehensive Guide to Social Commerce In China

Are you struggling to keep up with the ever-changing landscape of social commerce in China? Well, you’re not alone! With its rapid growth and influence, social commerce has become a game-changer for businesses looking to tap into the booming Chinese market. In fact, did you know that social commerce accounted for almost 16 percent of retail e-commerce sales in China in 2022?

Don’t worry, we’ve got you covered. In this article, we’ll explore the growth and impact of social commerce in China, the key players and social commerce platforms driving this phenomenon, emerging trends to watch out for, and the benefits it brings to brands. Get ready to dive into the world of social commerce in China like never before!

Key Takeaways

• Social commerce is rapidly growing in China, accounting for 16.3% of online retail e-commerce sales in 2023.
• In social commerce, people use apps like WeChat and Xiaohongshu to shop and interact with other buyers, sellers, and influencers before making a purchase.
• The shift from traditional e-commerce to social commerce has led to changes in marketing strategies, focusing on platforms that integrate social interactions and shopping experiences.
• China’s successful social commerce model is being replicated globally, offering new opportunities for businesses worldwide to increase brand visibility and engage customers effectively.

What is Social Commerce in China?

Social commerce is when social interactions and online shopping come together, creating a smooth and enjoyable shopping experience. It’s about combining the convenience of e-commerce with the fun and connection of social media.

With social commerce, people can buy products directly within their favorite platforms like WeChat and Xiaohongshu, without having to leave the app. It’s all about making it easier for customers to shop while also allowing them to interact with others and share their experiences.

So, instead of just browsing through products on a website, social commerce lets you explore items in a more interactive way, discover recommendations from friends or influencers, and make purchases with just a few clicks.

How did it all start and why China is a definite pioneer in social commerce?

Back when I first started observing China’s digital landscape, things were just taking off. Everywhere I looked, people were glued to their smartphones, browsing, chatting, and, of course, shopping. What fascinated me was how naturally social interactions blended with commerce.

At the heart of this was the trust Chinese people placed in recommendations from friends, family, and even popular figures online. I remember seeing a makeup tutorial on Douyin and being amazed when the influencer directly linked to the lipstick she used. It was genius – shopping made as easy as a single click.

With time, new platforms were sprouting up, each adding its twist to the social shopping experience. And the giants – Alibaba, Tencent, JD.com – they weren’t just watching. They were at the forefront, pushing boundaries and integrating more engaging, social features.

But it wasn’t just about the tech. It was the people. Young Chinese shoppers were adventurous. They didn’t just want products; they craved experiences, stories, and connections. As platforms catered to this desire, social commerce naturally took the lead, and China emerged as its global champion. What began as a curiosity turned into a revolution, and I was right there, watching China reshape the future of shopping.

What’s the current size of China’s social commerce?

Thanks to the fact that China has the largest social media population worldwide (only WeChat gathers 1.26 billion monthly active users), it’s no wonder that it is the country pioneering in social commerce.

On average, Chinese Internet users spend more than two hours a day browsing different social media platforms. In 2022, around 84% of Chinese consumers bought at least one product on Chinese social media platforms, in comparison to only 36% in the US.

As of 2023, social commerce sales account for 16.3% of total e-commerce retail sales value in China and they will record a steady growth in the future. In comparison, the US stands at around 5%.

It is predicted that next year (2024), social commerce sales will reach $507.94 billion, with an annual growth of more than 10%.

ResearchAndMarkets.com forecasts that China’s social commerce industry could hit $2 trillion by 2028 from its 2022 value of $363 billion. The market research firm said the sector’s value would grow at a compound annual growth rate of 33.7% between 2022 and 2028.

Changes in marketing strategies due to digital content growth

The rapid growth of social commerce in China has led to significant changes in marketing strategies, particularly due to the increase in digital content. Companies are now shifting their focus from traditional e-commerce channels to platforms that integrate social interactions and shopping experiences.

This shift requires brands to adapt their marketing tactics by incorporating elements such as interactivity and informativeness on social media platforms. In the US, companies are looking towards China’s social commerce market for inspiration and insights into consumer shopping trends.

Benefits of social commerce

Social commerce offers several benefits that can help companies increase their brand visibility, enhance customer engagement, and streamline the customer journey.

• Increased brand visibility: Social commerce allows businesses to reach a wider audience and gain more exposure for their brand. By leveraging social media platforms, companies can showcase their products and services to a large number of potential customers.

• Enhanced customer engagement: Social commerce provides a more interactive shopping experience on social media platforms. Customers can engage with brands through comments, likes, and shares, fostering a sense of community and connection. This engagement helps build trust and loyalty among customers.

• Streamlined customer journey: With social commerce, customers can discover products, read reviews, and make purchases without leaving the social media platform. This seamless integration makes the shopping process convenient and efficient for customers.

Key Players and Platforms in China’s Social Commerce Market

China’s social commerce market is dominated by key players and platforms such as Xiaohongshu, Pinduoduo, WeChat, and Douyin. These platforms offer personalized customer experiences and shoppable content that are driving the growth of social commerce in China.

Discover more about these influential players and the emerging trends in this dynamic market by reading on.

WeChat

WeChat is a super popular social media platform in China, developed by Tencent. It has over one billion users! In 2021 alone, WeChat made $17.4 billion from social network revenue.

In fact, WeChat is where everything started. With the introduction of WeChat mini-programs, an e-commerce solution within the platform, Chinese Internet users started enjoying online shopping within their favorite social media platform. Mini-programs allowed them to share their favorite products and brands with their friends and more.

Thanks to an extensive user base and an integration of many commerce-friendly features, like in-app shops, e-brochures, and the WeChat Pay payment method, WeChat became a leader of social commerce in China.

Check our guide to WeChat eCommerce to learn more!

Xiaohongshu (Little Red Book)

If you’re looking to tap into China’s social commerce market, you can’t ignore Xiaohongshu (Little Red Book). As China’s most trusted social shopping platform, it has gained popularity among young female shoppers in top-tier cities.

With 200 million monthly active users, it is a popular platform, especially for Chinese women who are interested in beauty products. So, if your target audience includes these demographics and you want to reach them with your brand or product, XiaoHongShu could be the perfect platform for you.

Xiaohongshu has its own integrated marketplace, where you can sell your products directly to the users of the app. It’s especially profitable for fashion and beauty brands, that can promote their products, collaborate with Key Opinion Leaders and Key Opinion Consumers, and organize live-streaming sessions, during which they will present products and sell them directly.

It’s a very convenient platform for shopping, and it’s the most trusted one, in terms of product reviews and recommendations.

Here is our Little Red Book eCommerce Guide!

Pinduoduo

Pinduoduo is the one of biggest social commerce platforms in China, and it’s making a big impact in the digital marketplace. It has quickly become the third-largest e-commerce player in China, just behind Alibaba and JD.com, the most popular traditional e-commerce platforms in the country.

In fact, Pinduoduo didn’t start from social media, but from e-commerce. It gained popularity thanks to its unique business model, where people can engage in group buying, inviting friends to purchase products in bulk, to get a better price. This model turned out to be a big hit, especially during the COVID-19 pandemic, when people were teaming up inside their buildings, to buy the necessities without leaving the house.

Here is how it works:

One of the reasons for its success is that it has gained popularity among consumers in lower-tier cities and rural areas. In fact, Pinduoduo achieved a market capitalization of USD 100 billion in less than five years! This shows how significant social commerce is becoming in China’s digital market, especially when it comes to reaching Chinese consumers who are shopping online.

Here is our more detailed step-by-step guide

Douyin and its integration of shoppable content

Douyin, a prominent player in China’s social commerce market, has successfully integrated shoppable content into its platform. This means that users can seamlessly purchase products directly from video creators within this social commerce platform.

Douyin Stores, introduced in May 2018, is a native e-commerce system that allows for this convenient shopping experience. This integration reflects the growing trend in China of blending entertainment and e-commerce together.

With its explosive growth in e-commerce sales, Douyin has become a key platform for brands looking to target Chinese consumers.

Here you can check our guide to Douyin Flagship Stores

Taobao

Alibaba’s online behemoths, Taobao and TMall, have seamlessly woven social commerce into their fabric via the pioneering GuangGuang platform. Bolstered by the star power of live-streaming mavens like Li Jiaqi, the “lipstick king,” and an assortment of vibrant sales events beyond just the famed 11.11 festival, GuangGuang has set new standards for the e-commerce realm.

At its core, the massive reach of Taobao and TMall ensures that a vast audience is constantly engaged in the social shopping arena. Moreover, the platform’s retail-centric approach ensures that users are primed for purchasing, making every interaction count. The regular splash of unique sales events further spices up the shopping journey, offering irresistible deals and memorable moments to shoppers.

Emerging Trends in Social Commerce

Shoppable Content, Livestream Shopping, Shoppable Chat, Merging Marketing and Transactions, and Personalization through First-Party Data – are just a few of the emerging trends in China’s social commerce market.

Shoppable Content

When it comes to social commerce in China, shoppable content is a big trend that brands should pay attention to. Platforms like Douyin have become popular for their ability to integrate entertainment and shopping seamlessly.

With short videos and live streaming, these platforms create engaging experiences for consumers while giving them the opportunity to make purchases directly. In fact, brands like Taobao have achieved great success by leveraging shoppable content on platforms like Douyin.

This emerging trend is gaining traction in China’s social commerce landscape and provides an exciting opportunity for brands to connect with their target audience in new and innovative ways.

Livestream Shopping

Livestream shopping has experienced remarkable growth in China, becoming a booming market worth $720 billion. It has revolutionized how brands engage with and sell to their customers.

In fact, live-streaming has become an integral part of e-commerce in China. The numbers speak for themselves – live-streaming commerce sold over $720 billion in 2023 and continues to grow at a rate of 53%.

This trend has had a tremendous impact on boosting brand recognition and driving sales performance in the Chinese market. With such impressive results, it’s clear that livestream shopping is here to stay as an effective way for businesses to connect with consumers and generate revenue.

Shoppable Chats

WeChat and Douyin are essential platforms when it comes to social commerce in China. They have become vibrant shopping hubs, offering high-value content that is highly social and relatable.

Shoppable chat, which allows users to seamlessly shop within the chat interface, is becoming increasingly important in social commerce. With WeChat being one of the most powerful e-commerce platforms in China, and Douyin’s integration of shoppable content, these platforms are leading the way in shaping the future of online shopping in China.

Merging Marketing and Transactions

In China, platforms like WeChat, Weibo, and Douyin have undergone a transformation by merging marketing and transactions. These platforms offer messaging and blogging features combined with e-commerce and online payment options.

By integrating these functionalities, they create a comprehensive ecosystem for social commerce. This trend reflects the growing popularity of social commerce in China, where brands can learn from the merging of marketing and transactions to leverage this trend for their success.

It presents an opportunity for marketers to engage with customers through multiple channels while facilitating seamless transactions within the same platform. Such integration allows businesses to reach their target audience more effectively and provide a convenient shopping experience all in one place.

Personalization through First-Party Data

First-party data is the information businesses collect directly from their customers, such as purchase history, browsing behavior, and preferences. By leveraging this data, marketers can create more personalized and targeted marketing strategies.

Personalization allows businesses to understand their customers on a deeper level and tailor their messaging accordingly. It helps to deliver relevant content and offers that resonate with individual customer preferences, increasing engagement and driving conversions.

Moreover, personalized marketing has become a growing trend as customers expect brands to understand their needs and provide a tailored experience.

Through first-party data, businesses can segment their customer base into specific groups based on behavioral patterns or demographic information. This segmentation enables targeted advertising campaigns that are more likely to reach the right audience at the right time with the right message.

Shopping in the Metaverse: Introduce the concept of “Metaverse Shopping”.

Have you heard of “Metaverse Shopping“? It’s an exciting new trend in social commerce. Basically, it means shopping in a virtual reality world. Instead of going to a physical store or shopping online, customers can step into a virtual environment and browse and buy products using their avatars.

It offers a more immersive and engaging experience for shoppers. And guess what? Gen Z, who grew up with 3D experiences, is expected to be the first to embrace this kind of shopping.

So, get ready for the future of retail in the metaverse!

Virtual Influencers as Brand Ambassadors

Let me tell you about the rise of virtual influencers as brand ambassadors in China. Virtual influencers are digitally created personalities who are gaining popularity among China’s young consumer base.

These virtual influencers serve as online ambassadors for brands, leveraging their strong presence on social media platforms to engage with their Gen Z audience. The emergence of virtual influencers is closely tied to the growing influence of social media and the power it holds in shaping consumer behavior.

Chinese tech giants like Tencent and Alibaba are leading the way in developing this market by creating their own virtual human characters. This trend is not limited to China alone, as virtual influencers have also gained traction in other Asian markets such as Japan and South Korea.

Success Factors of Social Commerce in China

Social commerce in China offers numerous benefits, including integrated social media, e-commerce, and content creation, enhanced user engagement through influencer marketing, and the rise of community group buying.

Integration of social media, e-commerce, and content creation

In China, the integration of social media, e-commerce, and content creation is a game-changer for businesses. It allows them to reach customers directly through platforms like WeChat and Douyin and sell their products seamlessly.

By combining engaging content with shopping features, brands can attract and retain customers more effectively. This integration not only enhances brand visibility but also provides a personalized customer experience.

So, when it comes to social commerce in China, integrating social media, e-commerce, and content creation is key to success in social commerce growth.

User engagement and influencer marketing

Influencers play a significant role in driving consumer engagement and online retail sales on social network platforms. In fact, it is predicted that 60.9% of Chinese social commerce sales in 2023 will come from influencer marketing.

The influence of social media influencers helps to build trust, increase brand visibility, and enhance customer engagement. By leveraging influencers’ reach and credibility with their followers, brands can effectively promote their products or services to a highly engaged audience on various social media channels.

This type of marketing strategy has become essential for brands looking to tap into the growing social commerce market in China.

The rise of community group buying and live streaming commerce

In China’s e-commerce market, two trends have gained significant traction: community group buying and live-streaming commerce. Community group buying allows consumers to pool their resources together for discounted bulk purchases, while live-streaming commerce enables brands and influencers to showcase products through interactive live streams, allowing viewers to make purchases in real-time.

These emerging trends have rapidly grown in popularity due to their ability to create a sense of community engagement and offer unique shopping experiences. With China’s advanced influencer economy and high e-commerce penetration rate, the rise of these trends further strengthens the social commerce industry in China.

Conclusion

In conclusion, understanding and leveraging social commerce is crucial for brands looking to succeed in the Chinese market. With its rapid growth and impact on consumer behavior, embracing new ways of shopping on social media platforms is essential for staying ahead in China’s digital economy.

By integrating social interactions, e-commerce, and content creation, brands can enhance customer engagement and capitalize on the opportunities presented by social commerce trends such as livestream shopping and personalized experiences.

To thrive in this evolving landscape, proactive adaptation is key. In this rapidly evolving landscape of Chinese social commerce, brands need a guide, a partner, and a strategist – that’s where Gentlemen Marketing Agency steps in.

With our unparalleled insights into the Chinese market and a deep understanding of social platforms like WeChat, Xiaohongshu, Douyin (we are a certified Douyin Partner!), or Taobao, we are primed to help your brand make its mark.

Whether it’s collaborating with top-tier KOLs or creating standout campaigns for special sales events, our expertise ensures that your brand not only enters the Chinese social commerce space but thrives in it.

Join us and be part of China’s next big social commerce success story. Social commerce adoption is your key to success in today’s China!

Contact us to schedule a free consultation