Social commerce is set to soar in 2023. The market is projected to exceed a staggering 1 trillion USD in global sales this year. A social commerce pioneer, China will continue to be a major driver of this growth. The country has witnessed a substantial expansion of its social commerce sector in recent years, with a 40.25% surge in market size from 2021 to 2023.
Ashley Galina Dudarenok is the founder of Alarice and a China marketing expert. This article is based on her insights from the China Social Commerce Report 2023, produced by Alarice and ChatLabs.
TechNode Insider is an open platform for subject experts to discuss China tech with TechNode’s audience.
While traditional e-commerce channels continue to command a significant 72% market share in China as of H1 2022, social commerce is quickly ascending, rising from a 14% market share in 2021 to 21% in H1 2022. This emergence of new sales avenues is changing the e-commerce landscape, prompting businesses to modify their approaches to remain competitive.
Given this growth, it’s crucial for businesses to stay ahead. Alarice and ChatLabs have partnered to produce the China Social Commerce Report 2023, detailing the sector’s technologies and strategies. This report can help brands apply lessons from China’s success to navigate the social commerce landscape effectively. Below are some of the key takeaways.
The 3 Social Commerce User Journeys
As of June 2023, China’s online population reached 1.079 billion, according to a statistical report released on August 29 by the China Internet Network Information Center (CNNIC). The figure represents an internet penetration rate of 76.4% and an increase of 11.09 million people compared to December 2022, according to the report. By June of this year, the number of instant messaging and online video users reached 1.047 billion and 1.044 billion, with penetration rates of 97.1% and 96.8%, respectively.
In light of these trends, content has emerged as a critical element in driving sales on social commerce platforms. Brands equipped with the right insights can craft engaging content and integrate seamless communication and transaction functionalities. Let’s explore the relevant social commerce user journeys that brands can learn from and implement in their strategies.
1. Enhancing user experience with shoppable content
Shoppable content is an approach that integrates purchasing opportunities directly into a brand’s digital content. This strategy transforms traditional browsing into an interactive shopping experience, making it seamless and engaging for users.
A prime example of effective shoppable content usage is the Douyin storefront of Guerlain, a luxury cosmetics brand. Upon entering the store, users interact with a host of dynamic features such as livestreams, membership deals, and engaging short videos with embedded product links. These elements are strategically woven into the user experience, transforming passive browsing into an active shopping journey.
Brands should test multiple social commerce platforms and prioritize those that demonstrate high growth potential and return on investment. Creating engaging and informative content that resonates with the identified target audience is also vital. This content, strategically embedded with shoppable elements and incentivizing Calls To Action (CTAs), can transform casual browsing into potential purchases. Moreover, enhancing user engagement and loyalty by offering special deals and memberships can further increase the likelihood of conversions.
2. Engage with livestream shopping
Statista projects that by 2023, the livestreaming commerce market in China will expand to a staggering RMB 4.9 trillion (US$ 753 billion). To capitalize on this trend, brands need to learn how to effectively engage with customers during livestreams to drive both engagement and sales.
One brand that has effectively employed livestream shopping is Dior. Dior’s brand zone on Douyin begins with a livestream, ensuring that it is the first element that users engage with. During the livestream, users are just one to two clicks away from product pages, a list of showcased products, membership registration, and special offers. This setup ensures that the shopping experience is as seamless and engaging as possible.
Real-time interaction can significantly enhance the shopping experience, making it more personal and engaging for the viewers. After the livestream, it’s important to follow up with leads, offering them support and additional information about the products showcased. Responding to questions promptly and providing product promotions, limited-time discounts, and recommendations during the livestream can further stimulate customer interest and drive sales.
3. Personalize the shopping experience with shoppable chat
Shoppable Chat is a modern commerce strategy that integrates shopping capabilities directly into chat platforms. This approach, widely adopted in China, allows brands to provide personalised customer experiences while driving conversions.
Platforms like WeCom, WeChat, Weibo, and Douyin are critical tools for businesses in China, enabling them to engage with customers, increase sales, and offer personalized services based on a 360° customer view. Luxury brands such as Graff and Prada have made effective use of these platforms to enhance their customer engagement.
Prada, for instance, leverages its WeChat Mini Program to provide live customer support, offering personalized advice and recommendations. This includes features like checking stock in offline stores, making product recommendations based on the user’s current product of interest, and allowing users to purchase products directly through the WeChat Mini Program.
Brands should reduce reliance on third-party e-commerce platforms and prioritize platforms that allow them to own and control their data, such as WeChat and WeCom. Brands should ensure they connect users with sales agents based on the user’s location. This enables a more personalized and efficient service.
It’s important to stay on top of how social commerce evolves over time. In today’s market, being aware of and acting quickly on new trends can make the difference between being ahead and falling behind.
Companies need to design shopping experiences that make it easy to switch between different things like discovering, sharing, being entertained, doing research, playing games, getting suggestions, and finally buying.
To captivate their audience, brands should focus on creating engaging, interactive experiences that encompass a spectrum of activities, including purchasing. The development of innovative retail strategies and the design of personalized, unique customer journeys will be key.
This article was provided to TechNode by Ashley Dudarenok, the founder of China-focused digital marketing agency Alarice and China digital consultancy ChoZan 超赞. For further insights, download a free copy of the China Social Commerce Report 2023 here.