China has the world’s largest digital buyer economy today, with more than 710 million todate[1]. Social Media channels are adding eCommerce options to compete with existing e-retail platforms like TaoBao and JD.
eCommerce in China spiked 24.9% in 2020 with US$5.681 billion worth of transactions reported by the United Nations[2]. The sheer size of the country’s market continues to attract foreign brands even as the global economy remains sluggish amid the ongoing pandemic.
With international travel restricted, Chinese consumers are drawn to foreign products sold online despite longer shipment periods and a limit per person on overseas purchases. This is encouraging for companies who wish to expand their online retail presence in China.
TMall and TaoBao offer brands the potential for target-achieving sales despite their massive channel traffic. As with all e-retail platforms, prospects for success increase greatly when products appear in first page carousel banners or first in search results. With thousands of competitive brands online, these positions are not easy or cheap to achieve.
During the pandemic, several emerging social media platforms have risen to prominence that provide unique opportunities to foreign retailers. China digital landscape is moving fast, here are some that are trending social commerce platforms.
RED (XiaoHongShu)
RED functions like Instagram but is much more than Instagram with its eCommerce options.
The go-to search platform for Chinese shoppers, RED has 300 million followers with more than 100 million active monthly users aged 25 – 34. 77% are female consumers with significant spending power. The platform facilitates great engagement with consumers by broadcasting brand channels. Its social commerce may be yet to take off, but RED is undoubtedly the brand search channel for shoppers that retailers cannot ignore.
We recommend RED for retailers who already have eCommerce set up overseas or in China. No Chinese mobile number or bank account is required for registration. A company can open a social commerce account free once it has 1,000 followers.
KuaiShou
A video platform that has gained visibility and recognition in the past year, KuaiShou hosts suburban and relatively mature audiences compared to DouYin. KuaiShou followers might not follow DouYin.
DouYin
DouYin made headlines in 2020 as the TikTok of China. This is a channel with no lack of creativity and entertainment. Users are attracted by its short videos and typically spend between 1 and 3 hours a day on it.
KuaiShou or DouYin are each powerful channels for customer engagement and brands should select the one that best identifies with their customers’ DNA. Both channels require great storylines for effect, so brands must regularly upload new celebrity-made or –based videos to make their accounts worthwhile.
TaoBao Live
Developed with retailers in mind, TaoBao Live is best known for featuring celebrity live-streamers for live sales. While spots are much in demand and attract large audiences, sales are variable as they depend on the right live-streamer – customer’s DNA match.
Popular live-streamers like Austin and Viya can help generate 5-figure sales, but they come at a price and are very selective. Not for the fainthearted among brands.
InKe
A gamer platform with light-hearted content, InKe is ideal for gaming businesses. A ‘battle-mode’ allows registered users to participate in ‘entertaining’ challenges with cash-gifts to live-streaming gamers.
As gaming and animation audiences are predominantly young, InKe – and other similar channels as BiliBili – are best suited for products targeting this demographic.
There we are, almost spoilt for choice. But if you are a foreign brand seeking to leverage the almost boundless B2C Chinese market with flexibility and cost-effectiveness, our recommendation is: go RED.
[1] Statista report [2] UNCTAD, May 5, 2021
