Nowadays, WeChat groups and WeChat Moments on our mobile have become hot spots for various start-ups. On the one hand, it is because of the massive bankruptcy of traditional micro-businesses, on the other hand, it is also due to the emergence of various new social commerce.

In the past two years, a large number of social commerce models have sprung up, including group building, selection, some starting from vertical fields, and others relying on Key Opinion Leaders, with explosive points emerging one after another

Why is social commerce so popular now? In essence, the cost of traffic from traditional e-commerce is getting higher. For example, Taobao's clearance promotion costs and operation costs are quite high for most of the small and medium business. On another hand, most of the traffic acquired by advertising can only be converted into one-off deal, the user retention rate is very low, and the cost to run a promotion is too high.

Recently, WeChat is also making efforts in the field of e-commerce, and the traffic cost of Wechat is cheaper than that of Taobao. Businesses can get users through various channels such as official account, WeChat groups and moments. This is the fundamental reason why social networking providers can be popular.

Since the traffic in Wechat is enormous, when people are talking about social commerce, they mainly refer to e-commerce within the WeChat ecosystem.

Most of the traditional e-commerce is built on a platform, and shoppers trust this platform to buy things on this platform. For example, we are familiar with Tmall and Jingdong.

Social Commerce is a decentralized model. In addition to offline stores, there is a lot of social commerce, because based on social relationships which have weak psychological attribute. According to this trend, the future of marketing will be more and more decentralized and personalized.

At the same time, Taobao's live e-commerce has also led to the rise of many factory stores. Many Internet celebrities (KOL) have one or two factory stores behind them, which can produce the products recommended by them in one day. Behind this, it is obvious that there is a strong supply chain support.

So in simple words, social commerce is the decentralization of people, products and merchandise.

E-commerce is no longer limited to several major platforms. The traffic in the field of e-commerce is increasingly transferred to the private sector. E-commerce with the social gene can find traffic within its own community. From the perspective of people, goods and market, it is more efficient.

Social commerce is a social transaction mode with trust as the core, which greatly reduces the marketing cost of business.

For the vast majority of the lower-tier locations in China, the key driver is the price. They can go wherever the price is cheaper. That's why the pure social commerce platform like Pinduoduo is rising so quickly.

The core part of social commerce is social rather than selling. In other words, social commerce is to just sell products via social media but to sell the personality to the "friends". As long as a strong sense of trust is built in the circle, he/she can actually make much less effort to sell.

Like other marketing channels, tone of the core measurement in social commerce is conversion rate. For individuals, even if they only cover the people around them, they still have a considerable amount of volume. For celebrities and KOLs, their influence makes the coverages are even higher. Plus trust from fans/followers, the conversion rate will be also higher than the average person.

In the Internet era, as long as there is enough active traffic, there are many ways to achieve a sales target, but the fundamental problem is how much value the operator can provide to users.

With the promotion of O2O, the development of mobile e-commerce is growing faster and faster, and the online shopping behaviour of consumers is becoming more and more distinct. After years of development, traditional e-commerce giants are entering the brand upgrading period, which makes a large number of bottom businesses have to start looking for new traffic sources.

And this part of the capacity supply, just with the lower-tier market user demand perfectly fit.

Last year, the market scale of domestic social commerce industry reached 1.3 trillion yuan, with a year-on-year increase of 110%. With the deepening integration of e-commerce transactions and social traffic, the proportion of social commerce in the online shopping market is also rising. At present, the social commerce market is in the stage of rapid development.

With the help of social traffic led by Wechat, social commerce has also achieved explosive growth. In the future, mobile QQ, Wechat, microblog and other social platforms will continue to be important channels for social commerce sales.

Although there are so many players pouring into social commerce, the importance of social commerce is still mixed. Some marketers believe that social commerce is just a variety of gimmicks, which is to cheat investors' money and eventually return the dust to the dust. Some people believe that social commerce is a revolution in the e-commerce industry and the future of e-commerce.

The essence of retail lies in higher efficiency, and in the process of transaction, how to solve the trust barrier between buyers and sellers is an eternal topic. The mode of social e-commerce can greatly reduce the sales cost of merchants through social trust and realize the fixed deposit by sales through the centralized demand in the past.

From this point of view, social commerce is undoubtedly an e-commerce mode that can improve retail efficiency, and its value of existence is self-evident.

 

 

(Ref: TOP E-Commerce)