Thanks to the increase in disposable income and therefore to the expansion of the middle class, China has gone from being an exporting country to an importer one, especially of luxury goods. In 2019, exports from China to overseas reached $ 221 billion, while imports exceeded $ 183 billion.
In particular, the value of imports dedicated to cross-boarding e-commerce reached $ 88.6 billion in 2019, with a 21% increase over the previous year. The data confirm the growing trend in the purchase of international products by Chinese consumers through e-commerce channels. Online shopping is constantly expanding and cross boarding has become a valid channel for the direct sale of foreign products.
Not surprising, China represents the largest internet market in the world, with 21% of consumption worldwide. It is quite natural for Chinese users to shop online, and social media are among the preferred channels for finding product information and reviews.
Due to the lack of confidence in advertising and in the general value of the brand, consumers tend to entrust their purchase choices to influencers or word of mouth. This is how what is called social marketing was born, that is, promotion through social media in order to increase sales, and with him a series of platforms dedicated to live streaming and micro blogging. It is in this context that WeChat e-shops fit in.
With over 1 billion active users, WeChat is undoubtedly the most popular social platform in China, going from being a communication app to a service app, where you can, of course, sell. WeChat stores are equipped with a great deal of functionality that sets them apart in the Chinese e-commerce landscape.
Let’s see some:
• WeChat Pay: almost all WeChat users have a credit card linked to the account, allowing the payment of the products quickly with a click;
• WeChat CRM: the Customer Relationship Management system that allows you to receive information about your users and their behavior in the app;
• Integration with influencer accounts: WeChat stores allow you to easily create a link between an influencer campaign and the product page, generating extremely high conversion rates;
• Social sharing: WeChat stores are easy to share with friends via WeChat. They are therefore the right tool for viral campaigns, group purchases and other socially guided purchasing behaviors;
• Re-targeting: you can target promotions for users based on their behavior in the app;
• Integration of offline-online experience: thanks to the spread of QR codes in China, it is possible to easily access WeChat stores by scanning them;
• Customer service: WeChat stores are connected to official accounts, guaranteeing users effective customer service;
• Easy access: the WeChat ecosystem is “ready” and full of functions that can be used by users and vendors, you just have to access it.
What are the disadvantages of WeChat stores?
Although there are great marketing potentials, WeChat stores have limits:
• Lack of organic traffic: WeChat is not a search engine and is a “closed” application. Only followers can see your shop, and traffic is primarily generated by sharing, influencers or advertisements.
• Mini-programs and WeChat shops are difficult to share outside of the WeChat ecosystem: this limit can be compensated by creating a web version of your WeChat shop (or HTML5 version).
But let’s get to the point, how do you open a shop on WeChat?
First, whether you decide to cross-board or not, in order to make direct sales in China you need to be able to import your products (and therefore own an import license or someone who imports for you) and a sales license (or of a partner / agency that owns one).
Once these two goals are achieved, you can choose whether to:
1. Open a WeChat store on existing platforms such as Weidian and Youzan
2. Open your e-shop with a mini-program
What is the difference between a WeChat store and a WeChat mini-program?
A WeChat mini-program is an app built within the WeChat ecosystem, basically an app that exists within another app. It can be used to provide e-commerce services, but in reality it can have infinite types of functionality.
When we talk about the WeChat store, we are referring to any e-commerce experience optimized for WeChat. Among the most famous we mention Weidian and Youzan.
Let’s see in detail:
Although nothing prevents you from developing your WeChat store from scratch, most of the companies rely on third parties that provide e-commerce services, because they normally already guarantee a user base and ready-to-use functions.
Here are some of the major WeChat store vendors you should keep in mind:
Youzan: is one of WeChat’s most popular e-commerce platforms with millions of users in China. The reason for this success lies in the large number of features that are available for those who decide to join the platform, from shop customization to CRM to customer care. The platform requires a fee to use these services, and prices vary based on the features you decide to activate. Youzan is an excellent choice for those who decide to go to Chinese e-commerce without the need to invest large amounts of money and design their own shop on a mini-program.
Weidian: Weidian is a cheaper alternative to Youzan, but it has far fewer features. It is a good choice for retailers with a very limited budget, but it allows for less customization and limited data collection.
Mini-programs are mainly used for e-commerce. According to an ALDZS report of the 2.3 million mini-programs available on the market, 18% are dedicated to e-commerce.
The mini-programs allow you to further customize the experience that your customers have in your e-commerce, and pay greater attention to customer care (which is fundamental in China).
Mini-programs are more like a web page than an e-shop, companies can design their user interface the way they want – with images, videos, flashy GIFs – and also access and analyze customer data as they wish (all functions that are not available on other e-commerce platforms such as Tmall).
The success of the mini programs is given by the combination of high customization for retailers and ease of access for users.
Consumers tend to prefer mini-programs over HTML pages because they are easily loadable and shareable. Note that 35% of users access them because they are shared by friends or family.
Both WeChat e-shops and mini programs have access to the huge WeChat ecosystem and especially its Alipay payment system, making the user experience circular: accessing content – making purchases – sharing purchases with other users.
This system also guarantees a high engagement rate, in fact if someone is following your account it is very likely that they are interested in your products.
What are the popular products on WeChat?
Millennials are extremely interested in foreign products, but tend to pay attention to specific categories. Here are the products that have more success in e-commerce:
• Cosmetics and beauty products
• Products for children (children care)
• Food and drinks
• Fashion and jewelry (luxury brands)
If WeChat is a closed platform, how do we generate traffic to wechat / miniprogram stores?
Since WeChat isn’t an organic search ecosystem, you have to push potential customers to find your store.
Here are some of the main options for driving traffic to your WeChat store.
1. KOL or influencer
Influencers are generally the best choice for those who decide to launch a new store and create engagement. In recent years, the live-stream has been very successful.
Furthermore, it is very easy to connect your e-shop to an influencer account and this makes them particularly effective when it comes to converting users into buyers.
Influencers are an essential part of the brand marketing strategy in China.
In terms of return on investment, you can usually achieve results that are consistent with 100% and 800% of your advertising costs. This means that companies that constantly invest in influencer campaigns almost always get a return on sales, sometimes much higher than the initial investment. On the other hand, Campaigns with KOL are quite expensive and you have to pay close attention to the kind of influencer you decide to use .
2. WeChat Advertising
WeChat advertising is an effective (but expensive) way to drive traffic to your WeChat store or official account.
There are three types of WeChat advertising:
a. WeChat Moment ads appear in users’ social history. They are relatively expensive (around 100 RMB per 1,000 impressions) but are extremely visible and a powerful branding tool.
b. WeChat banner ads. They are banners displayed at the bottom of other articles from other official WeChat accounts (such as a banner on a website). They are cheaper than WeChat Moment ads (a follower of WeChat banner ads typically costs around 13-15 RMB), but does not have the same impact in terms of PR and conversion.
c. Advertising on mini-programs, which are displayed on third-party mini-programs. They may consist of pop-up ads, banner ads or videos that are played automatically. The cost of this type of promotion is around 5 RMB per follower.
3. Promotion through other official WeChat accounts
Promotion through official accounts is an effective way to drive traffic and gain followers. It is true both for B2C companies (collaborating with lifestyle platforms for example) and for B2B companies (collaboration with accounts in their sector or by targeting the same B2B customers).
In fact, according to a February 2019 QuestMobile survey, recommending other accounts is the primary way for WeChat users to discover new accounts to follow.
4. Social sharing
WeChat is a social media and generating incentives for sharing is an essential element of marketing on this platform.
The most common form of social sharing was popularized by the social commerce startup Pinduoduo: group purchases. It consists in providing WeChat customers with a discounted price if they manage to convince friends to accept the offers.
Another essential element of sharing on social networks is ensuring that all your posts have an effective “call to action” that pushes readers to become followers (such as using QR codes at the end of the articles).
5. Attract new users from other platforms and social networks
Finally, you can drive traffic to your WeChat e-shop from your website or other popular sites / social media in China by entering promos and the QR code of your official account.
On some social networks (such as Weibo) it is not possible to insert direct links to the account but there are some alternative solutions.
Is WeChat e-commerce the right platform for you?
As always, the answer depends on your goals.
There are larger and more specialized e-commerce platforms than WeChat where the sale of foreign products has already started and popular. At the same time, promoting and gaining visibility on these platforms is quite expensive and you will certainly find yourself struggling with an even higher number of competitors.
In addition, WeChat e-commerce is still in its infancy, and we can expect pleasant surprises from the most popular social platform in China.