Banking on consumption: Social e-commerce sites take major role in China
By Mi Jiayi
A growing number of Chinese e-commerce platforms are incorporating social networking features, mainly with bloggers posting products and giving followers advice.
Xiaohongshu, or Red, was one of the earliest batches of social networking e-commerce sites. It allows users to post content and attract followers, and has created a community to share shopping tips. Bloggers say that unity-based e-commerce sites have changed their way of online shopping.
"You can get information from more than one source, and read genuine reviews. That's really helpful," said Mei Xi, one of the Red bloggers.
Other community-based e-commerce platforms promote products for daily needs, including fresh groceries, home appliances, and household goods. They offer services to customers in the neighborhood and are promoted by word of mouth from the residents themselves.
Data from research company Nielsen show that the growth of monthly active users of these community-based e-commerce sites can reach more than 400 percent.
"These platforms are based on the strong connections between people who know each other, and they don't need to attract a lot of separate traffic at once," said Professor Lao Guoling, Director of Research Center of E-commerce at Shanghai University of Finance and Economics.
Professor Lao said that whether these sites continue in popularity depends on how well they handle the entire shopping process, not only the social networking part.
"Because the trust between friends and family rely on the quality of the goods they recommend," said Lao.
Aside from famous community-based sites include the U.S.-listed Pingduoduo, WeChat's shopping arm Weidian, traditional e-commerce sites like Taobao and JD.com are also introducing more social networking features, by enabling customers to form chat groups which can work together to win discounts during big shopping festivals like Double 11.