Budget-savvy shoppers are leading the way in driving demand for online deals, and if you love online shopping, you’re not alone. According to Hootsuite and We Are Social’s Digital in 2018 Trends report, online shoppers spent about $1.5 trillion in 2017 worldwide, and that number is expected to rise.
With more ways to reach consumers on social platforms, businesses have been trying to crack the code on how to best engage and encourage consumers down the purchase funnel. Keep in mind, however, that there is no one-method-fits-all digital strategy. The ways in which consumers respond to digital and social cues in China and the U.S. have certain similarities but vary for the most part. And if you’re planning to have a digital presence in both markets, understanding those differences is important. One of the ways it differs is the way that some Chinese shopping sites are combining social media with e-commerce.
China is a country that is technologically innovative and full of shrewd Chinese shoppers, especially the women who shop for their families. According to the South China Morning Post, 75 percent of the household buying decisions are made by women, and 70 percent of them prefer to shop online. Put the two together, and you create the ultimate online shopping and social e-commerce machine. Online deals can be found everywhere, and, while sites like Alibaba and Tencent remain the primary e-commerce behemoths, other sites like Pinduoduo are quickly finding unique ways to entice and encourage consumers to shop on their site.
“We focus a lot on shopping deals, but Dealmoon goes beyond that to provide lifestyle advice and build a community for our audience.”
Known as the platform to score the best deals and lowest prices on everyday items, Pinduoduo has amassed a large number of regular bargain-hunting shoppers. It differs from other e-commerce sites by incentivizing shoppers to invite their network to shop. Say you found an iPhone case that you want to purchase. It’s likely you would find the item on Pinduoduo for a much lower price than the retailer’s site or even on other e-commerce sites. What’s the catch? You have to get friends, family members or acquaintances on social networks such as WeChat to also order the same item from the manufacturer directly.
This new method of gaining higher purchase volumes by integrating a social aspect has made Pinduoduo one of the fastest growing Chinese apps for e-commerce. Some compare the company’s model as a Groupon and Facebook hybrid. Pinduoduo has seen explosive growth since it began in 2015, with a usage rate that went from under 2 percent to almost 20 percent. The company recently filed for a $1 billion U.S. IPO, but has also received wide criticism due to the sales of counterfeit products on its platform. Although Taobao, Alibaba’s e-commerce platform, still reigns supreme with a 53 percent usage rate, Pinduoduo’s rise in the marketplace has been impressive. In response, Alibaba also launched a group-buy function within Alipay, its mobile payments app, called Pintuan. Alipay is currently one of China’s leading mobile payment services, giving Pintuan a strong foundation for mixing social with business on Taobao.
Another e-commerce site that has been popular with both the Chinese and Asian Americans is a platform called Dealmoon. Launched in 2009, Dealmoon started as a shopping deal site for women, but has since expanded to serve more than 20 million users and 3,000 retail clients around the world.
“Our target audience for our site and app today consists of Chinese citizens living overseas or Asian-Americans,” says Jennifer Wang, co-founder and chief marketing officer for Dealmoon. “Ninety percent of our demographic consumers are Chinese, and most of them use our site to order authentic products from the U.S.” Because many of their Chinese customers are concerned about counterfeit products being sold online, word-of-mouth referrals from sources they trust are paramount to driving sales. “Good product reviews and referrals are really important to our bottom-line,” says Wang. “Once our Chinese customers buy what they want from our site, they’re quick to share their experience on social media networks, which then attracts their friends to shop on our site. Most of our visibility has come from Weibo and WeChat, and we’ve just started a new feature on our app called Haitao to make it easier for our Chinese users to buy from overseas.”
As for their Chinese customers living overseas and Asian-American audience, Dealmoon earned their trust and loyalty by sharing useful information, from lifestyle hacks, to tips on how to pass a DMV test. “Our vision is to provide the best products, services and advice to our consumers,” says Wang. “We focus a lot on shopping deals, but Dealmoon goes beyond that to provide lifestyle advice and build a community for our audience.”
While Dealmoon has its own website and app, it can also be accessed through Weibo and WeChat. “We gained tremendous growth about six years ago, when Weibo entered North America’s market,” says Wang. “We were actually one of the first enterprises to use Weibo in North America, and we saw that many of the users from Weibo were Chinese students studying overseas. So, instead of just offering shopping deals, we also started a lifestyle blog that would help Chinese citizens transition abroad.”
The one thing that consumers resonate with is the power of influencers. Whether through Douyin or Xiao Hong Shu, these social platforms enable users, especially those with clout, to write reviews and endorse products or services.
“Influencers can work well for brand awareness,” says Jenn Chen, digital consultant and strategist for the coffee industry. “If you’re using them, I think you need to be careful in your research. Make sure they’re on-target with your audience and that they have a history of delivering and working with brands. There are many influencers out there who tend to over-inflate their influence.”
"Make sure they’re on-target with your audience and that they have a history of delivering and working with brands. There are many influencers out there who tend to over-inflate their influence.”
Influencer marketing is big business in China. “Many Chinese brands spend a lot of money on these influencers,” says Jessie Liu, assistant vice president and public relations manager at East West Bank. “They know that millions of people follow these celebrities and influencers, and that translates into higher sales based on the products and services their favorite influencers endorse.”
Xiao Hong Shu (Little Red Book) is a social media platform in China that can be accessed from WeChat and reflects a hybrid equivalent of Instagram and Yelp in the U.S. This Shanghai-based e-commerce app burst onto the scene in 2014, and has since attracted more than 15 million consumers and $200 million in annual merchandise sales. Users can share reviews, tips and recommendations on products or services in the form of a photo or video post. Many celebrities and influencers have their own accounts and discuss their favorite brands. Xiao Hong Shu’s co-founder, Charlwin Mao, shared in an interview with Wired magazine that 80 percent of users are under 30 years old and 90 percent are women.
“Our platform is actually very much like Xiao Hong Shu,” says Wang. “Dealmoon is an influencer since we’ve been in the market for so long, and people trust our reviews and products sold on our site. We’re pretty influential on social networks, and we actually own about 50 other social media accounts that are focused on various aspects, from categories like beauty and lifestyle, to regionally localized accounts.”
Another app called Douyin (Tik Tok) began as a social music video platform in 2016, but quickly gained a massive following and is now one of China’s top short video platform apps. Short 15-second videos of celebrities and users doing everything from lip-syncing and stunts, to pouring coffee and long-board dancing have caught on. According to Technode, the platform reached roughly 150 million daily active users worldwide in June, and its parent company Bytedance merged with musical.ly, a U.S.-based social music video platform.
“Ideally, everything that we post for sale on our platform should satisfy the customer, who would then recommend it and our platform to their network of friends,” says Wang. “At the end of the day, we want them to remember the positive feeling they had while using our platform, which is why we have a very active customer service team. Choosing the best products and working with our merchants to negotiate price points are very important. We want to make sure that merchants get the sales they want and that our customers are happy with their purchases.”