Rise of WeChat Social Commerce
E-commerce experience on WeChat is nothing like shopping on Taobao or Jingdong. It starts with content and ends up with an impulse purchase. This is WeChat social commerce. Different from customers on a shopping platform, traffic directed by the social commerce is extremely targeted and largely influenced by the endorser, making purchase action the natural continuation of content consumption. Customers are gradually and sometimes unconsciously converted from readers to buyers. This trend of social commerce has affected the ecosystem of WeChat. WeChat shops are one of the most popular revenue streams for WeChat Official Accounts.
Newrank released a report about WeChat social commerce. The report is based on a survey on the top 5,268 WeChat Official Accounts. Note that these are super WeChat accounts with 100k to 3 million WeChat followers. Data related with sales volume is provided by Youzan.
Here are highlights of the findings:
- 14% of the top WeChat Official Accounts have WeChat shop, and the sales are amazingly high.
- Most Official Account use a third-party WeChat shop platform to open stores
- The WeChat Official Accounts with content related to Culture and Baby take up 71% of all sales volume
- Books and baby products are the two most sold product categories on WeChat
More than 25% WeChat Official Accounts that talk about Baby, Beauty and Travel have WeChat shops. The followers of these content categories usually have higher purchasing power, and are thus more likely to be converted into customers.
The revenues brought by WeChat shops are impressive. For example, the WU Xiaobo Channel (吴晓波频道), an account focused on economics and investment, launched a WeChat shop to sell wine. It reached 10 million RMB in annual revenue. Rice-Cake Mama (年糕妈妈), an account talking about child care, achieved 40 million RMB in revenue in a single month. Apart from selling products, a lot of the official accounts also selling services including consulting, education, design, and health related services.
This chart shows that accounts talking about Culture and Baby have the highest conversion rate. They make up 71% of the sales volume of all the categories. However, accounts related to News and Society have very low conversion rates.
The efficiency of the conversion largely depends on the correlation between the content and the products. In Baby and Beauty category, the product is directly related to the content itself, and the content acts as the endorsement and converts the followers into customers.
Surprisingly books are the most bought product on WeChat. The unit price of books is relatively low thus it is easier to make impulse buying right after reading an article.
Comparatively baby products, with relatively higher unit price, take 24% of the market. This may due to the endorsement of the KOLs having strong effect on the purchase of baby products. Similar to word of month, an official account that keeps pushing high quality articles can build strong trust among its readers.