WeChat has over 800 million users, 83% of whom purchased products through the messaging platform in 2015. This number beats the 375 million users on China’s largest B2C marketplace Tmall. The difference between social commerce and commerce is the engagement, and that’s where social Customer Relation Management (CRM) is finding its time to shine.

Compared with other e-commerce platforms, a WeChat public account not only helps their users to purchase physical goods but also helps brand channels engage followers and interact with them.

“Many Chinese people now buy luxury items on WeChat, rather than using e-commerce platforms. This helps to build trustworthy social commerce, rather than a traditional retail market model,” Anthony Xu, CEO of OCheng told TechNode.

OCheng, a Chinese company that adapts machine learning uses chatbots to respond to the customers showcased their solution on Chinaccelerator batch 11 demo day.

Top luxury brands are finding it more and more difficult to manage over a million customers one by one. AI-powered chatbots are replacing membership cards that not only understand customer’s past purchases, but also engage them in conversation. An artificial intelligence-based chatbot can handle routine questions, send out personalized messages, and recommend products based on their purchase history.

OCheng’s solution for brands helped increase French cosmetic company Sephora‘s fanbase from 90,000 to 3 million in 2016. They looked at Sephora’s WeChat account and segmented based engagement. Targeting certain segments, they invited some to connect with the chatbot and engaged with them based on their purchase history.

Competitors do exist, including Social Touch (时趣) and Youzan, but Anthony says that their competitors focus on SMEs. The Shanghai-based company says they have a more scalable business model and adopt machine learning, which other companies lack.

Aiming to function as a social commerce for brands and the number 1 social CRM for luxury brands in China, OCheng has partnered with 15 lifestyle, fashion and cosmetic brands including Dunhill, HMC, Baby Bear, Sephora, Michael Kors. Now the company is handling 4 million followers with using their chatbot. Established in 2015, the company has since generated an average of RMB 4 million (US$ 586,000) in revenue per year.

Chinese company joining an international accelerator

OCheng is now working with dozens of global luxury brands, where the company needed the global expansion gateway.

“China-based accelerators can provide networks within China, but what I needed was hands-on mentorship from international mentors. Chinaccelerator had good global networks and provided partnership opportunities, and we needed just that,” Anthony says. “We want to approach more international brands and work with them to build a global social commerce platform.”

Luxury brands need innovation

“We have two strong points that other companies cannot replicate. Our technology base is strong and we’re using AI to do the CRM. We have experience in cosmetic and lifestyle brands, and have knowledge and connections,” Anthony says.

35-year-old Anthony previously worked at Alipay’s technology unit, and later worked in a digital marketing department at Yum! and Mary Kay. Leveraging his past experience and connections to start his digital marketing solution company, Anthony believes that OCheng is at the right place and time.

“Fashion, cosmetic and luxury brands need innovation; digital marketing is an important part of that. They want to work with startups to bring innovation within their companies. On the other hand, AI now is being applied to all industries,” Anthony remarks.

OCheng has two business models: software-as-a-service (SaaS) and premium customization services. The former is a 1 year subscription for brands and the latter provides a personalized model with systems integrations. They charge 10,000 ~20,000 RMB (US$1,465 ~ 2,930) a month for brands, based on the number of their followers and the functions they want to use.

Eva Yoo is Shanghai-based tech writer. Reach her at evayoo@technode.com

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