Sales on WeChat mini programs exploded in 2020 and they have no plans to give up.
With the global luxury market gripped by uncertainty, and China as the only market recovering from the second half of 2020, many luxury brands have decided to look east to expand their horizons. These factors, coupled with the continued growth and evolution of China’s digital landscape, has created a solid environment for brands to thrive in with digital businesses.
A report by Bain estimates that online luxury penetration in China grew 153% in 2020 compared to previous years, representing the 23% of the total consumption. Hence, unlike Western markets, Chinese consumers continued to purchase luxury goods. Purchases took place both on established e-commerce platforms (Tmall and JD.com) but also on platforms that have recently opened up to e-commerce, such as WeChat, DouYin and WeiBo.
According to the 2021 WeChat Luxury Index report by DLG (Digital Luxury Group) and JINGdigital, the overall growth rate of the WeChat communities of luxury brands has increased by 44% in 2020, compared to 37% in 2019. This increase probably comes from the influx of brands that increase their investments in the Chinese market and on local digital platforms.
WeChat remains the most used social media but user behaviors on the platform have changed and brands are finding it increasingly difficult to engage their communities. We can confidently say that WeChat has gone from being a social media to a direct marketing tool in just a few years, and consequently measuring your performance in terms of follower growth is basically a mistake. Instead, what needs to be measured is the conversion rate (new customers and sales) that the app manages to generate for you for your campaigns. And sales are the focal point of WeChat starting in 2020.
The Chinese APP generated transactions worth 1.6 trillion yuan (250 billion euros) through its “mini programs” in 2020, up 100% compared to 2019. And if the Covid19 pandemic has certainly affected this data , do not believe that the trend is destined to decrease.
According to eMarketer, China’s e-commerce retail sales (total) grew 21.0% in the first quarter of 2021, – while total retail sales were up + 4%. The forecasts are that it will increase by 52.1% this year. The pandemic has actually accelerated a trend that was already clearly visible in 2019 and is exploding now.
To crown WeChat’s success, some platforms such as WeiBo and RED, which historically have never given the opportunity to create a direct link with the app, now allow the redirection of traffic from their platforms to the WeChat Mini Programs.
Don’t forget that unlike the main sales platforms, such as Tmall, when you decide to sell on WeChat you have to take into account the primary “social media” function in WeChat. This includes strategies such as creating temporary “pop-up” stores for new product launches, making purchases easily shareable, creating campaigns based on visual and video content that move smoothly through the WeChat ecosystem, and using H5 pages.