I’m sure by now you are all familiar with the concept of social commerce and the advantages it can offer compared to traditional distribution channels. While social commerce is growing exponentially and many firms have adopted this strategy, there still remains unfulfilled potential, particularly in the Western World.
China is the most advanced nation under this aspect and experts estimate it to be 10 years ahead of the Western Hemisphere. The growth of Chinese social commerce, particularly mobile commerce, can be summarized with a few statistics. The market for rural customers (Living outside the big cities) is estimated at $16 billion, for mobile commerce alone. Contrary to the West, the Chinese consumer makes most of his e-commerce transaction through mobile phone rather than computers. A staggering 388 smart cars were sold in just 3 minutes through the ‘WeChat’ social app. It is hard to imagine someone from a western culture make such a big transaction online, let alone 400 in under 5 minutes.
So how can Western firms emulate the success social commerce is having in China? There is no clear answer and this should be analyzed more thoroughly by Western Marketers. It may never reach the level of China due to the cultural barrier. Chinese consumers seem a lot more active in the social commerce arena, 40% of user who have shopped online are willing to share their experience on social media compared to the almost insignificant 1% in the West. It is worth noting that social commerce is a relatively new phenomenon, so the psychological/cultural reasons that convinced the Chinese new generation to trust and shop online so often can be replicated in the West.
One step Western firms can take to bridge the overwhelming gap with China is to use Social commerce as efficiently as possible to create a unique and valuable experience for the user. Bottica, an online jewelry retailer, published the results of a study comparing the traffic generated from Facebook and Pinterest.
Every firm should analyze the data from their social media platforms as they show what type of transaction they can expect from different users and create a suitable strategy for each channel. Bottica might consider displaying some of their cheaper products to Facebook users given their purchasing habits for example.
The main conclusion is that firms have to think of innovative ways to exploit all the information they are receiving through social media. It is no longer enough to simply have a Facebook page or Twitter account, firms have to think of ways to optimize their social commerce strategy to create value for users. If Western firms can do this successfully, we might one day see them reach the impressive level of social commerce growth of China.
Bowler, C. 2015. Six Eye-Opening Stats About Social Commerce in China. Forbes Magazine. http://forbes.com/sites/onmarketing/2015/07/13/six-eye-opening-stats-about-social-commerce-in-china/
Feinleib, D. 2012. How Facebook, Pinterest Compare In Social Commerce. Forbes Magazine. http://forbes.com/sites/davefeinleib/2012/05/22/how-facebook-pinterest-compare-in-social-commerce/