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Economic Watch: Social e-commerce gains traction in China

Source: Xinhua| 2020-01-20 17:52:23|Editor: huaxia

The giant screen shows that Tmall, formerly Taobao Mall, reached a 268.4 billion yuan worth of sales on the 2019 Singles' Day (Nov. 11, 2019) at the media center in Alibaba Group's Xixi Park in Hangzhou, east China's Zhejiang Province, Nov. 12, 2019. (Xinhua/Huang Zongzhi)

The penetration rate of retail based on social media has reached 71 percent as consumers are empowered by WeChat, Weibo and many other social media in the new digital era, which are reshaping the e-commerce landscape.

BEIJING, Jan. 20 (Xinhua) -- Along with thriving social media in China, social media-related retail has been gaining traction, with innovations reshaping the retail landscape.

The penetration rate of retail based on social media reached 71 percent, said a survey issued this month by the Boston Consulting Group and Tencent.

According to the survey, 61 percent of surveyed consumers would be attracted by products promoted on social media, and 69 percent of them have shared online shopping links on social media.

For enterprises, 85 percent believed social media is the most important factor when influencing consumers on deciding whether to buy a product, while 81 percent said they have been investing heavily on social media among all online channels.

Live e-commerce has become a hit in China. A growing number of small businesses are using live streaming to display and sell their wares.

More than 100,000 sellers leapt into live streaming on Alibaba's Taobao online marketplace on Nov. 11, 2019 during the "Double 11" online shopping bonanza first initiated by Alibaba in 2009.

Among live streaming celebrities, Weiya took the lead with 2.7 billion yuan (392.44 million U.S. dollars) of sales from live streaming on Nov. 11.

Consumers are empowered in the new digital era. WeChat, Weibo and many other social media are reshaping the e-commerce landscape.

A staff member livestreams via a mobile phone to sell potted plants at an agricultural demonstration park in Gengche Township of Suqian City, east China's Jiangsu Province, April 18, 2019. (Xinhua/Ji Chunpeng)

As Chinese e-commerce consumers are predominantly mobile-savvy, online shopping is not just about adding items to their virtual shopping cart. It is already a social activity and ultimately a kind of entertainment.

The prosperity of social media has directly changed traditional business models. Retailers can shorten the distance with consumers through social media, improve communication efficiency and cut communication costs, the survey said.

The social e-commerce market exceeded 1.26 trillion yuan in 2018 and is expected to reach 2.06 trillion yuan in 2019, up 63.2 percent, said a report on the industry issued by the Internet Society of China.

Social e-commerce accounted for 14 percent of online retail transactions in 2018, and is expected to exceed 20 percent in 2019 and 30 percent in 2020, the report said.

The booming social commerce is driven by a trusted digital payment infrastructure. China has a cash-based payment system with low credit-card penetration, so there were few barriers to the adoption of mobile payments.

This has allowed for the rapid development of super-apps like WeChat, which provides more interactive opportunities for retailers and customers.

Over 50 million individual businesses were active users of WeChat Pay, one of the country's two major third-party payment platforms, accounting for nearly 80 percent of the country's total last year.

China's online retail sales rose 16.5 percent year on year to top 10 trillion yuan in 2019, according to the National Bureau of Statistics.

Of the total, the online retail sales of physical commodities reached 8.52 trillion yuan, up 19.5 percent year on year.

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