Social networks boost consumer purchases
By Chen Meiling | China Daily Updated: Feb 7, 2020
Retail businesses using apps prosper as online platforms have deeply penetrated into Chinese people’s lives
Every night before going to bed, Yang Huiwen, a 22-year-old public relations intern in Beijing, would spend about an hour on the short-video sharing app TikTok.
One of her favorites is Li Jiaqi, a well-known influencer in the makeup sector who has more than 10 million followers on the Chinese Twitter-like social platform Sina Weibo.
In his livestreaming videos, Li would try on dozens of lipsticks on his hands and lips one by one, compare colors that have subtle differences, dish out on the merits of brands, and have “convenient” links right there for anyone who wants to buy.
Yang said she often buys two lipsticks after watching the videos, and they cost 500-600 yuan ($72-87) each. She added each show of Li would attract as many as 6 million fans to watch. Some 100,000 products may be purchased within several minutes.
Besides Li, Yang follows a dozen bloggers on Weibo too. They are mainly involved in skincare and makeup. She would also click ads on WeChat Moments if the spokesperson catches her eye. Her monthly expenditure on online shopping through social platforms is about 2,000-3,000 yuan.
“Many of my friends agree that recommendations from key opinion leaders like Li are uppermost in our purchase decisions because we trust them,” she said. “And if we know more details, we’re more motivated to buy.”
Chinese consumers can spend about four hours on mobile phones every day on average, including over 2.3 hours on social media platforms.
The number of monthly active users of WeChat has reached 1.1 billion worldwide. The number on Weibo has hit 500 million, a report of Tencent Marketing Insight and Boston Consulting Group said.
Social platforms have penetrated deeply into the life of Chinese people and made it possible for brands to link potential consumers in a more interactive and efficient way. It creates new marketing and selling methods, including ads on social media and social e-commerce platforms, promotions of KOL, and online group buying communities.
About 28 percent of 6,302 consumers interviewed said they are highly influenced by WeChat accounts and WeChat mini-programs, 31 percent by KOL and key opinion consumers, and 37 percent by online social communities, the report showed.
Liu Ying, 53, a college teacher in Beijing, said except for apparel, most of her shopping is done online. They include kitchen tools, books and fresh fruit. Most of the time, she is inspired by promotions from friends, Weibo bloggers and WeChat groups.
“Reputation, instead of price, is more important to me,” she explained.
Though the quality is not always as good as what she expected, the convenience of shopping and quick logistics have lured her into online shopping often. She said she sometimes spends eight to nine hours on Weibo, WeChat and short-video sharing platforms daily since she does not want to be “left behind by young people.”
“Promotions are acceptable, but it’s sometimes annoying if there are too many or trying to sell me something that I don’t need,” Liu added.
Amid the upgrades in consumption and the booming internet businesses, retail built on online relations is an inevitable trend, as brands are seeking closer interaction with consumers and consumers are expecting targeted services, said Ma He, investment manager of Meridian Capital China.
Thanks to social media, the boundary between marketing and selling has become vague, as more platforms have made it easier for consumers to be exposed to ads and purchasing channels, he said. The tendency to weigh the reputation of products among acquaintances also boosts social commerce, he added.
Jason Yu, general manager of Kantar Worldpanel in China, said: “As social interactions prove to be effective to stimulate people’s desire to buy, there will be huge potential to further grow in this sector.”
By now, almost all social media platforms have built their own commerce platforms or have linked up with an external outfit. More companies are using WeChat mini-programs to supplement their own app or flagship stores.
“It’s important to build up the loyalty of users by establishing a trustworthy brand rather than offering heavy subsidies. Social media platforms will have to find a way to lock up consumers’ interest and enhance customers’ revisits and referrals.”
Yu added social commerce can be applicable to all consumer sectors, but so far they are more widely leveraged in the beauty, luxury and fashion sector.
Global makeup brand Mac cooperated with internet celebrities in livestreaming and short-video platforms, and keeps on guiding consumers at offline stores into their online mini-program and WeChat account for long-term promotions.
Japanese clothing brand Uniqlo invested in targeted advertising on WeChat Moments and WeChat accounts before the Singles Day, a Chinese online shopping carnival, to increase the brand’s exposure rate by 50 percent, the report showed.
Uniqlo consumers can receive the latest information about new products, discount and suggestions on clothes matching through the mini-program.
In 2019, daily active users of WeChat’s mini-program surpassed 300 million, creating turnover of more than 800 billion yuan in total, data from Tencent showed.
About 85 percent of over 70 consumer goods companies interviewed by TMI and BCG agreed that social media plays the most important role in deciding whether consumers will or will not buy their products. Some 81 percent said they put the largest investment in social media among all online marketing channels.
The focus of brands is shifting from products to people－that is to bring more potential consumers into brand fans and actual users, according to the report.
Veronique Yang, managing director and partner of BCG, said social commerce reduces the cost of obtaining new customers as old consumers will help develop new ones in their inter-personal communities.
On average, more than 750 million users read Moments on WeChat every day. About 69 percent of interviewees once shared links of online shopping on social media, the report said.
She said it’s important to offer high-quality content, such as more solid knowledge related to the commodity, feedback from previous users and entertaining material.
“For example, makeup brands can provide beauty courses; baby and maternal products can share parenting skills on social platforms.”
She added that besides consumer goods companies, automobile, insurance and finance companies are also joining the trend.