Evolution of eCommerce

10 February 2020

from Retail to Social Networks; from China to the Western World

The way we shop, message and communicate is radically evolving. Online shopping has traditionally been done on eRetail websites like Amazon, while social network sites were born to connect people and create global communities. Now, another huge evolution is upon us, with online shopping, instant messaging and social networks morphing into one. Asia has been paving the way for this transformation and now the Western world is changing both how we shop and how we see social networks. This has enormous implications for brands that, once again, have to adapt their eBusiness strategy, investments and corporate mindset.

Online Trends in Asia – Blending social media with eCommerce

Tencent's WeChat launched in 2011 as an instant messaging service, China's version of Facebook’s Messenger or WhatsApp. This most popular social network platform in China now boasts a user base of over one billion[1]. However, as time spent on WeChat and social media as a whole is decreasing[2], WeChat has expanded its operation into eCommerce with the launch of mini programs.

The fusion of eCommerce and instant messaging

With a major focus on online shopping, WeChat's mini programs have revolutionised China's eCommerce industry. The mini programs act as mini apps that users can access seamlessly without having to download or leave the WeChat platform. Users are able to use the mini programs in the same way they would a mobile app; to catch a ride, order a takeaway, book cinema tickets and order the week's groceries, for example.

WeChat's mini programs are integrated into the existing social network platform, giving sellers access to a massive audience, significantly lowering acquisition costs. This existing user base enables new ways of selling products, such as group buying deals taking advantage of user's social networks, chat groups and sharing facilities. For example, a cosmetic item might cost 100RMB, but if you convince friends to buy also, the price could be reduced to 80RMB, for you and your friends. Companies are also able to  grow their customer base with the advent of livestreaming, where influential bloggers present and review their favourite products within WeChat. The mini programs allow brands and retailers to customise and personalise their stores to better engage and relationship build with consumers.


Closing the loop: the digital wallet

Moreover, all WeChat's mini programs are connected to the app’s digital wallet, WeChat Pay, giving users the convenience of completing end-to-end mobile purchasing transactions without leaving the WeChat ecosystem, no downloads or separate browsers.

The payment service is also geared up for cross-border payments. In China, worldwide eCommerce is a significant driver of globalisation, the market size for China's cross-border eCommerce in 2016 was $78.5 billion, which is expected to be $144 billion by 2021[3]. WeChat are hoping to position WeChat Pay as the go-to payment system for offline transactions in Brick&Mortar shops, restaurants, taxis and transport services, etc.

WeChat Social Commerce Report 2018 states, "As social commerce is becoming more common in all cities across China, users see WeChat as a channel for purchasing the most common day-to-day used items. Consumers continue to favor low price value items [with] the average purchase price on WeChat [...] around 200RMB"[2]. 

However, the WeChat Social Commerce Report also highlights that the yearly survival rate of a WeChat store is 40%, meaning that only 2 out of 10 stores will survive after 2 years operation – "the barrier of opening a store is low, but the competition remains intense".[2] This is sobering news for brands and retailers, and reiterates the need for managers to revisit their strategies and be ready for the changes ahead.


Livestreaming: another trend in the evolution of eCommerce

In the Western world, livestreaming is more popularly recognised with gaming. However, in China livestreaming is big business in online shopping. Influential bloggers and celebrities broadcast live video content, usually reviewing or presenting a product offering whilst responding to questions from a live digital audience. Livestreaming is a major touchpoint for any brand, it offers an efficient and cost effective way to engage and interact with audiences. The objective for many brands is to build communities loyal to their products, livestreaming can help to jump-start building your community.

WeChat's mini programs have increased the revenue capability for livestreaming as previously, "social media influencers could only direct followers to their online shops through a link at the bottom of blog posts. Through mini programs, sellers can now embed their stores directly inside their article."[4] Livestreaming is making influencer marketing more accessible to all and more impactful, building trust and loyalty. Combine this with WeChat’s mini programs, and it’s becoming a more powerful selling tool.

Read the eBusiness Institute’s full article about the latest trend of livestreaming in eCommerce.


Recent developments in Western word social media

The market for messaging apps is still growing. Consumers want more personal ways of interacting with each other, they want to experience sharing images, stories and videos, as they would if they were sitting together, and they want it all in real time. This is pushing up the usage of top messaging apps with "more than a billion monthly active users – higher than the usage figures for top social media platforms"[5].


A new direction for WhatsApp

In his keynote speech at the F8 Conference in April 2019, Facebook CEO Mark Zuckerberg announced Facebook "would transition away from the News Feed and public posts [...] towards a ‘privacy-focused communications platform’ ”[6]. Facebook's WhatsApp messaging service is to expand dramatically into eCommerce with the introduction of Product Catalogs, most likely to be fully functional stores where users can browse but also buy products directly. Plus, Zuckerberg announced a WhatsApp payment system which would give users a fully immersed eCommerce experience. 

Facebook CEO Mark Zuckerberg introducing WhatsApp Product Catalogs[7]
Source: www.f8.com


Instagram’s already in the game

Facebook's Instagram already supports many eCommerce 'shoppable' features where users can tag and shop products directly from Instagram posts, and now it has its own shopping cart, allowing users to shop and go through checkout without ever leaving the app. The checkout feature will appear as a blue 'Checkout on Instagram' button, this will appear once you have selected the options for your chosen product (size, colour, etc), tap on the blue button, complete your contact and payment details and then 'Place Order'. Instagram will save your data securely for future purchases. This streamlined and seamless shopping experience will undoubtedly inspire more users to shop and therefore increase conversion rates for brands and retailers.

To find out how Instagram's Checkout is relevant for your brand, read the eBusiness Institute's full article: Instagram's new seamless eCommerce


Getting ready for the changes ahead

Mobile eCommerce is not an option, it is here to stay, but are businesses ready to take advantage?  

Companies must seek to deliver an outstanding consumer experience, this is the 'be-all and end-all', if customers are unhappy with their shopping experience whether on a website, a retailer or a social network platform – they won't return and the word will soon spread. Keeping mobile in mind is imperative in all product offerings and a clean, attractive image will always be the star of the show. The free eBusiness Institute's Design Rules for Tall, Thin Packs provides useful guidance for tricky mobile hero images.

Excellent product content is the key to engaging visitors online and offline. In the online world, brands need to overcome the virtual world barrier, consumers are unable to touch and feel the product, therefore compelling product descriptions must provide sufficient literal and concise information. The eBusiness Institute provides further information on how companies can drive sales and improve shopper experience with Best-in-class eContent

It is essential that there is a full understanding of the platforms where brands appear and how consumers interact differently within the communities and throughout their purchase journey. Understanding consumer behaviour is crucial, Ratings & Reviews provide a powerful tool that directly influences what shoppers buy and where. Find out more about Why Ratings & Reviews really matter.

Adopting a digital transformation mindset for your brand and your employees takes time, commitment and ongoing education, it is a critical determinant of your company's overall continued success. The eBusiness Institute provides turnkey Corporate Training Programs which can help grow your company's performance in eCommerce.


In conclusion

The future of eCommerce has already arrived in China and this is reshaping the future of eCommerce for us all. Brands must adapt their eBusiness strategy and break the silos even further, being ready to invest their money in excellent product content, outstanding consumer experiences, key influencers and community audiences. 


This article was created and written by Luigi Matrone - CEO & Founder of the eBusiness Institute. It was originally published on the eBusiness Institute Blog on June 12.



[1] https://www.digitalcommerce360.com/2019/04/16/why-china-ecommerce-is-going-crazy-for-wechat-mini%E2%80%91programs/

[2] https://walkthechat.com/wechat-social-commerce-report-2018/

[3] https://www.emarketer.com/Article/Cross-Border-Ecommerce-Spending-China-Top-100-Billion-Threshold-2017/1016697

[4] https://www.techinasia.com/wechat-mini-programs-ecommerce

[5] https://business.linkedin.com/marketing-solutions/blog/linkedin-sponsored-inmail/2019/why-marketers-are-embracing-messaging

[6] https://www.theverge.com/2019/4/30/18523265/facebook-events-groups-redesign-news-feed-features-f8-2019

[7] https://www.youtube.com/watch?v=pv_Z6RxeKKI

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