The Impact of WeChat on Social Commerce in China

Brands using WeChat to amplify their social commerce game. PC: LaptrinhX

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Last December, I turned in my Chinese thesis! Guess what the title was... (hint: look at the header). I wrote my entire thesis in Chinese (as required) – a total of 17 pages. I have my summer internship with the American Chamber of Commerce in China (AmCham) to thank for inspiring my thesis topic.

As a Marketing and Communications intern, one of my duties included transcribing interviews for my boss. One such video interview I had the opportunity to tune in to featured Milind Pant, the CEO of Amway. Around 5 AM, I excitedly logged onto the Microsoft Teams link. It's not every day I get to hear from the CEO of a global business with an especially strong presence in China.

Pant was engaging and effervescent, answering my boss's questions with detailed precision. His insights into leveraging the power of social commerce in their Asia strategy specifically caught my attention. The interconnectivity of our world is increasing day by day, and social commerce helps to bridge not only the gap between businesses and consumers but that between consumers themselves.

Below, I distill key insights from my thesis into some bullet points. I mean... no one wants to read 17 pages of Chinese characters, right?

• The development of China's technological capabilities, coupled with the rise of a consumer-oriented economy, plays a vital role in forming the country's social commerce ecosystem.

• Fierce competition and rising costs of attracting consumers contribute to the slowdown in China's traditional e-commerce growth. Think Alibaba, JD, etc. – the first entrants in the e-commerce space.

• On the other hand, the proportion of social commerce in the entire online shopping market increased nearly 8% in the span of three years (from 2015-2018).

• WeChat and its social networking functions provide a new, lower-cost method of attracting consumers to brands. For example, brands may leverage the immense followings of key opinion leaders (known as "influencers" in the West) who promote their products via posts, videos, or live streams.

• A classic social commerce success story is that of Three Squirrels, currently China's largest snack brand. Three Squirrels launched a highly customizable gift box using WeChat's mini-program function. The buzz generated on WeChat built hype around the gift box, which met and exceeded customer expectations as a highly personalizable, unique offering.

• Social commerce is unlikely to completely replace traditional e-commerce in the future, as the former serves to cultivate relationships between brands and consumers while the latter serves to enable large-scale convenience.

• All things considered, future growth and improvements within the social commerce space will enable brands to continue attracting and maintaining their consumer base.

Completing my Chinese thesis ranks as one of the more intellectually gratifying experiences I've had. No matter what career path I take, I know I'll always keep up with the changes and trends in China, be it cultural, technological, and political.