With new features such as mini-programs and brand zones, and by investing in China’s second-largest e-commerce website JD.com, WeChat has increasingly built out its commerce capabilities in recent years.
Today, it has become one of the top options for brands and retailers that hope to capitalize on the social commerce trend in China. Many players have taken advantage of WeChat’s social nature to encourage users to engage in social shopping.
The latest blockbuster is Pinduoduo, a Groupon-like e-commerce company launched by ex-Google engineer Huang Zheng in 2015, whose market valuation has jumped 10 times in one year, reaching $15 billion by April 2018. Unlike Groupon, Pinduoduo makes WeChat its preferred platform for selling products. It offers high incentives – up to 90 percent off – for users who recruit enough friends and family to sign up for deals on the app.
Pinduoduo is a powerful example of the commercial potential of social sharing, and it points out the direction that the Chinese e-commerce market seems to be heading – a convergence of social media and e-commerce that is already shaping the expectations of WeChat users every day. However, Pinduoduo’s success depends on massive discounts and coupons to incentivise sharing. It is too concerned with low prices for most luxury players.
So, what are some good ways for luxury brands and retailers to strike a balance between seizing the opportunity without downgrading their brand image?
Create Premium Content
The success of luxury e-commerce platform Net-A-Porter in the West shows that brilliant editorial content (text, images, videos, etc.) is a smart way to win over a group of high-end consumers without undermining a brand’s sense of exclusivity. Making content not only high-quality but also meaningful helps build up long-term loyalty from customers.
On WeChat, one good example is JD.com’s luxury platform TopLife, which launched last November. From the beginning, TopLife has put a great emphasis on developing their editorial content. For example, it has a monthly column written by fashion writer and author Yvonne, who provides gift ideas inspired by TopLife’s offerings. Yvonne’s writing, coupled with nicely-crafted images and videos, makes the experience stand out from other online platforms. At the end of each story, readers are directed to the purchase page where they can buy all the items mentioned in the piece. “T classroom” is another section of TopLife’s WeChat where users can find rich fashion content, ranging from a guide to suits and streetwear trends to hot events in major international cities.
Lure Users to External E-commerce Platforms
Major brands such as Gucci have already tried out social commerce on WeChat, but they don’t directly sell on the platform. During the past Spring Festival in China, Gucci launched a mini-program to sell its special “Year of the Dog” collection to consumers. The mini-program, which looked like a typical e-commerce site itself, directs users to the brand’s official Chinese website when they click on the “buy” button. Similarly, the American premium cosmetics brand Estée Lauder requires users to register with its e-commerce site before checking out any deal on WeChat. Continuing the shopping journey on brands’ official website can make sure consumers receive an authentic brand experience. It also helps brands to collect customer data.
Keep Sales on WeChat limited and exclusive
For luxury brands that do directly sell on WeChat, many decide to maintain a sense of exclusivity and prestige by offering limited edition collections. The French luxury powerhouse Christian Dior is a prime example. As the first luxury brand to host flash sales on WeChat in late 2016, Dior has continued this business model, but chooses to only sell certain items with limited quantities during a special occasion such as China’s Valentine’s Day. Players like Givenchy and Burberry choose to maintain their exclusivity through working with key opinion leaders like Mr. Bags.