Major social commerce platforms in China
Social commerce platforms share some commonalities.
They are marketplaces in which customers can look for products, compare them and purchase them while sharing their experiences with other users, and express their preferences while exchanging recommendations. Having said so, it is possible to divide them into three main categories: content-sharing platforms, membership-based platforms, and team purchase platforms.
Three major types of social commerce platforms
As implied by the name, these platforms focus on content, shared
by KOLs or other users, who display products and report and their user experiences. The greater part of User Generated Content is usually shared in very interactive ways with short videos or live streaming, and followers through a “see now buy now” method can directly purchase through embedded links in the posts or videos. Currently, Douyin (TikTok) and Xiaohongshu (Little Red Book) are among the most popular content-sharing platforms in China.
These platforms are based on a system of registration to generate profit, retailers must pay a registration fee in order to be able to sell, and usually the S2B2C (Supplier to Business to Consumer) formula is used. This means that brands sell their products to micro-stores, which in turn sell them to customers. Micro-stores are put in contact with brands only after having successfully registered, and they can earn money from purchases but also by bringing new users in the platform either as ordinary consumers or micro-store owners. The platform manages the distribution, logistics, and also the training and after-sales services of its members. Right now, Yunji is one of the most used platforms of this kind in China.
Team Purchase platforms
In team purchase platforms, customers can buy at items at a reduced price if the purchase is made in groups of two or more people. After having set up a purchase order, those who started it can share it on their social networks to their contacts, and propose them to participate in the purchase, in this way the cost of the product for each customer will be lower. With this method, products can reach many potential customers, and for brands these platforms are useful also to give away unsold inventory while still making a profit. This purchase method is particularly suitable for consumers in lower-tier cities and more in general those who are more price-sensitive. At the moment the most used team purchase app in China is undoubtedly Pinduoduo.
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