Social E-Commerce: in China the Sector Doubles




Social commerce is the use of social networks in the context of e-commerce transactions and, in China, the gross value of goods for social e-commerce will increase from a planned 1.300 billion yuan this year to 2.86 billion yuan by 2021



It is probably the natural evolution of e-commerce. In an era where everything is social, in fact, even for e-commerce, there is a social variant. This variant, according to a report published by China Internet Watch (CIW), has grown exponentially in popularity over the past three years in China and its GMV (total sales volume) should continue to grow at a rapid pace to reach 1.3 trillion of yuan (US $ 185 billion) this year and more than double to reach 2.86 trillion yuan in 2021.

The interest in this type of e-commerce in China was born two years ago, when the GMV grew by 255.8 per cent to reach 626.85 billion yuan, compared to 176.20 billion yuan the previous year. The data refers to the main e-commerce platforms that combine social elements in their sales processes, such as Pinduoduo, Xiaohongshu and streaming video apps like iQiyi


The concept of social commerce was developed by David Beisel and by Steve Rube


Pinduoduo is an e-commerce platform that combines social interactions and social media elements. What makes it a social e-commerce platform is that it allows consumers to form groups or take part in existing ones, thus purchasing an item at a discounted price. Therefore an incentive to attract friends to buy an economic product and a greater social involvement among people, with a consequent increase in user traffic.

Xiaohongshu, on the other hand, which means “small red book” in English, attracts mainly female users born after 1990, as it specializes in the field of niche beauty and fashion products. It can be called social e-commerce because the Web is a community for like-minded users who share their advice and recommendations on various products. Many of them publish photographs and videos of themselves showing potential buyers how to adapt the products and exchange their opinions. Xiaohongshu has reached over 200 million registered users.

Both Pinduoduo and Xiaohongshu, have their platforms connected to Chinese social networks, such as WeChat, QQ or Weibo, where users share posts or invite their friends. However, there is another player in the field of social e-commerce.


Some academics have sought to distinguish “social commerce” from “social shopping”; the latter, the collaborative activity of online shoppers


The third player in the new social e-commerce space highlighted in the report is the iQiyi video streaming and film platform. The so-called “Netflix of China” has intensified the game compared to its American counterpart. While watching their favourite TV program, users can click on the links to purchase the items they see on the screen.

This June, iQiyi announced that it has over 100 million paying subscribers and the forecast sees continued growth. Obviously the ways in which Chinese users buy online is changing.

According to the annual growth rate of companies is 100.6 per cent with an 11.9 per cent increase in their penetration rate. Currently, over 80 per cent of online shoppers purchase their products through social e-commerce platforms. Shoppers are online and buying, only now their demand has shifted to purchases that combine authentic experience with personalized engagement




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