Social E-commerce, in a very short way, is Social media + E-commerce. It supports social interaction and users contribute to assisting in the online buying and selling of products and services. One of the earliest social E-commerce websites overseas is ThisNext, whose slogan is, ’Discover, recommend, share’. Shortly afterwards, several copies came to China and the social E-commerce story began, in 2006.

 

It is certinly true that social E-commerce is becoming more important and popular. Why? An interesting survey from Nielsen may give you some idea. The topic is ’What are the most trusted forms of advertising’?

 

Nielsen’s Global Trust in Advertising survey of more than 28,000 Internet respondents in 56 countries shows that 92% of consumers around the world say they trust earned media, such as word-of-mouth or recommendations from friends and family, above all other forms of advertising an increase of 18% since 2007. Online consumer reviews are the second most trusted source of brand information and messaging, with 70% of global consumers surveyed online indicating that they trust messages on this platform- an increase of 15 % in four years. While nearly half of consumers around the world say that they trust television (47%), magazines (47%) and newspaper ads (46%), confidence declined by 24%, 20% and 25%, respectively, between 2009 and 2011. 

 

Television advertising remains a primary way in which marketers connect with audiences, but consumers around the world continue to see recommendations from friends and online consumers as by far the most credible information sources. How can you get better connected with your customers? SNS is a fantastic solution.

 

E-commerce exploded in 2010 and 2011 in China, and the whole industry environment is now mature. Although the economy has cooled down recently, the E-commerce sector is continuing to grow steadily. According to a recent report, the total sales amount of Taobao was CNY 100 billion in 2008, and 4 years later the number has reached CNY 1 trillion. As an obvious trend of E-commerce, social E-commerce is very promising. So far, there are 4 basic categories of social E-commerce in China.

 

1. Community based on a E-commerce websites

Create a community for users to discuss the products and services which contribute to the E-commerce. 

 

Taojianghu: This is a social E-commerce platform launched by Taobao, which is also an important part of Taobao’s development strategy. Users can get access to Taojianghu via their Taobao accounts, share products bought from Taobao and obtain virtual money. Users can then buy very good productsy when shops start certain promotion campaigns. 

 

Star Vancl: It’s Vancl’s social platform. The users can show their opinions on the clothing ranges and can suggest some fashion advice. Normal users can follow the star users and get to know the latest information. Essentially, this system encourages users to discuss issues and ultimately leads them to purchasing items .

 

2. The third party E-commerce platform

These social websites are based on some existing E-commerce services, but they do not sell products and services directly and they own the user system themselves. They can maintain independence from the ones who sell. Meanwhile, they also cooperate with other E-commerce platforms They can lead the traffic to the sales shops and get commission.

Meilishuo, founded in 2010, is one of the biggest social shopping websites. It focuses on white-collar workers and its business model is based on advertisement for brands or online shops. There users can find and share some shopping information.

 

Mogujie, founded in 2011, is quite similar to Meilishuo. Mogujie focuses more on contributing to the trade. It will get commission from each trade. Currently, most of the traffic transfer transfers to Taobao. The business model is CPC.

 

3. Based on the current community   

There are several SNS communities with great impact on the internet now. Facebook and Twitter are two platforms for people to get connected with friends and spread information very quickly. China has local SNS communities too. Sina Weibo (Twitter in China), and Renren (Facebook in China) are very big SNS platforms. 

 

Many companies, including the leading brand companies, start their promotion on these SNS platforms.

 

In China, companies usually start an official account on certain platforms and post the latest news or promotion information. Currently, this is the most common way that most companies choose to promote their services. Because it is relatively cheap, the only cost is human cost, and the brand can interact with fans directly; it is a great user experience.

 

According to our small survey, every internet company has a Sina Weibo account. More and more offline shops are starting to use Weibo.

 

4. Guide shopping online, consume offline

These are vertical portals focusing on a certain industry. These websites gather offline shop information and post on them onto a website. Take Dianping as an example. It focuses on local life services and it’s famous for its catering industry information. When we go out we want to find some places to relax or have some food, the easiest way is to search on Dianping. It will tell you the nearest and most popular ones, and people can give comments to the certain shop, which will be a reference for the next consumers.  

 

Furthermore, group-buying belongs to this category, too. This model is common, like Groupon overseas, Meituan and Lashou in China. People buy the coupons online at a great discount and consume offline.

 

The SNS community will continue to performance strongly. They have more and more registered users because people know that E-commerce is a great opportunity. 

 

Focus on industry segments. Entrepreneurs will focus more on the overall industry. 

 

Mobile Apps are also useful. Mobile will become the biggest entrance to the Internet, and it is obvious that people need convenient and effective Apps. There is no doubt that accessing the net via mobile phones will be a continuing trend, but it is more likely to be beneficial to larger companies that already have an established user base. 

 

The website will be a more intelligent focus. It will always get to know what your customers need. 

 

DaD Asia believes this is a promising industry and we are trying to find excellent projects to invest in. All the evolution on the internet will make the world more interesting and friendly. 

 

So far, EE-commerce in China has been living through 3 periods. The first period, the B2B business model, providing a platform for Small and Medium-size Manufacture Enterprise (SMMEs) to exchange information, for example Alibaba. The second period, the online retailing business model C2C, B2C, C2B etc, for example Taobao. The third, social E-commerce connects the E-commerce world with friends and families, which is also the trend of Internet. Do you have any ideas about what will happen next? 

By Oscar Ramos