Social Commerce - China - February 2019

OVERVIEW
What you need to know
Covered in this Report
Sub-group definitions
EXECUTIVE SUMMARY
The market
Social commerce landscape
Figure 1: Type of social commerce players
Welcoming expanded catalogue, distribution and promotion formats
Ecommerce law brings discipline to China’s dynamic market
The consumer
Everyone is joining the social commerce party
Figure 2: Social commerce related behaviours, October 2018
The incredible rise of group buying platforms
Figure 3: Social commerce channel awareness, October 2018
Vertical platforms on the crossroads of transformation
Figure 4: Social platform penetration, October 2018
Price and social recommendations better leveraged by leading players
Figure 5: Purchase factors, October 2018
Outfit updates accelerated by social commerce
Figure 6: Products or service purchased, October 2018
Optimistic outlook for social commerce
Figure 7: Preference towards online retail channels, October 2018
What we think
ISSUES AND INSIGHTS
Seizing the opportunity of the “He” economy in social commerce
The facts
The implications
Figure 8: Examples of tapping into the “He” economy
Platforms competing on shared playing field
The facts
The implications
How fashion brands have embraced social commerce
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Categorisations of social commerce operators
Expansion of category, distribution and promotion formats
China’s first ecommerce law takes effect
MARKET OVERVIEW
Social commerce’s dynamic landscape
Figure 9: Type of social commerce players
Key drivers of the booming social commence industry: incentivised sharing
How China’s ecommerce law changes the competition in social commence
Micro-businesses’ struggles and opportunities
COMPETITIVE STRATEGIES
Category expansion is the trend but not the only way to increase revenue
Offline channels are now relevant to social commence business
WeChat Mini-Programs is used to drive traffic for social commerce
Short video and live streaming spark new formats of promotion
THE CONSUMER – WHAT YOU NEED TO KNOW
Strengths and shortcomings of vertical social commerce platforms
Social commerce accelerating wardrobe updating
Attending to males’ spending needs and preferences
SOCIAL COMMERCE RELATED BEHAVIOURS
Social commerce becomes a national craze
Figure 10: Social commerce related behaviours, October 2018
Figure 11: Percentage of consumers who have buyer related behaviours, by demographics, October 2018
Tier 2 youngsters welcome WeChat dealers for convenience, affordability and authentic reviews
Figure 12: Key drivers of buying products from sellers on WeChat Moments, September 2018
Figure 13: Social commerce related behaviours, by age, October 2018
Dynamic engagement driven by sellers
Figure 14: Social commerce sellers’ buying behaviours, October 2018
Figure 15: Age of social commerce sellers, October 2018
Figure 16: Gender of social commerce sellers, October 2018
Figure 17: Employment of social commerce sellers, October 2018
CHANNEL AWARENESS
Group buying platforms, the mind-blowing dark horse
Figure 18: Social commerce channel awareness, October 2018
Figure 19: Social commerce channel awareness, by age, October 2018
Figure 20: Social commerce channel awareness, by education, October 2018
Vertical social commerce platforms skew towards well-off females
Figure 21: Awareness of vertical social commerce channel, by gender and age, October 2018
Figure 22: Awareness of vertical social commerce channel, by monthly household income, October 2018
CHANNEL USAGE
Vertical social commerce platforms fail to nail transactions
Figure 23: Social platform penetration, October 2018
Unlocking the potential of male spenders
Figure 24: Social commerce channel penetration, by gender, October 2018
Figure 25: Percentage of consumers who have bought products from Pinduoduo and JD GroupBuy, by age and gender, October 2018
PURCHASE FACTORS
Price and social recommendations are key differentiators
Figure 26: Purchase factors, October 2018
Figure 27: Purchase factors of group buying or discount platforms users, by consumer type, October 2018
Comprehensive and vertical social commerce platforms attract quality driven consumers
Figure 28: Product related factors of social commerce platforms users, October 2018
Figure 29: Purchase factors of comprehensive social commerce platforms users, by consumer type, October 2018
Variety and convenience appreciated by males
Figure 30: Selected purchase factors of group buying or discount platforms users, by gender, October 2018
PRODUCTS OR SERVICES PURCHASED
Dressing needs accentuated by social commerce
Figure 31: Products or service purchased, October 2018
Household cleaning, beauty and health supplements preferred by heavy users
Figure 32: Products or service purchased, by consumer type, October 2018
Where is the social commerce gender gap?
Figure 33: Products or service purchased, by gender, October 2018
Figure 34: Percentage of buying selected products, by gender and age, October 2018
ATTITUDES TOWARDS SOCIAL COMMERCE
Young and well-off consumers prefer social commerce over traditional ecommerce
Figure 35: Preference and prospects towards online retail channels, October 2018
Figure 36: Preference towards online retail channels, by income and generation, October 2018
Figure 37: Future plans towards online retail channels, October 2018
Less satisfaction towards product quality
Figure 38: Attitudes towards online retail channels, October 2018
Trusting mass buyers over suspected marketers
Figure 39: Attitudes towards social commerce influencers, October 2018
Figure 40: Attitudes towards celebrity recommendation on social commerce platforms, by age, October 2018
Celebrity recommendations better recognised on Xiaohongshu and Mogujie
Figure 41: Social platform penetration, by attitude towards celebrity recommendation, October 2018
MEET THE MINTROPOLITANS
More active social commerce participants
Figure 42: Social commerce related behaviours, by consumer classification, October 2018
Variety and delivery service drive greater purchase intention
Figure 43: Purchase factors of group buying or discount platforms users, by consumer classification, October 2018
Higher satisfaction and expectations for social commerce
Figure 44: Attitudes towards social commerce, by consumer classification, October 2018
APPENDIX – KEY DRIVER ANALYSIS
Methodology
Interpretation of results
Figure 45: Key drivers of buying products from sellers on WeChat Moments, September 2018
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Abbreviations