On April 25th, 2018, Beidian, the leading social e-commerce platform in China, debuted on the screen of NASDAQ in Times Square, conveying the spirit of “It’s my time”. This reveals the rapid rise of the social e-commerce economy in China.
In the traditional e-commerce model, people purchase on platforms such as Taobao and JD through searching and intelligent recommendation. In this way, users either search for what they want or browse what the machine recommends
However, as the social media in China, WeChat for example, is growing rapidly, the infrastructure for e-commerce on the platform becomes more and more mature. It transforms a community into an inclusive place to do business. People trust what their friends recommend and it’s easier to make a purchase in a discussion group. That explains the booming of social e-commerce platform like Beidian. Due to word-of-mouth effect, products would be promoted and become well-known immediately in various communities through recommendation among people from different walks of life.
The business model of Beidian is different from Pinterest on which users buy products through buyable pins. A user of Beidian could be a shopper and a seller at the same time. That means, He/she could not only purchase products, but also share products to his/her friends, earning commission once the deal closes. The new business model creates a new channel for emerging brands, and also massive entrepreneurial opportunities.
In the United States, Amazon took up more than 43% of the e-commerce market share in 2016. The social platforms like Pinterest, Etsy and Jet.com still had broad space for growth. In China, however, Tmall and JD occupied more than 80% of Business-to-Customer e-commerce market. Therefore, under the overwhelming edge of these two giants, startups have to get traffic in innovative ways.
As the “2017 China Social E-Commerce Big Data White Paper” shows, the market size of China’s social e-commerce industy is likely to reach hundreds of billion RMB in 3 to 5 years. In other words, due to the bonus of social platform development, there will be more e-commerce giants born in China with comparable size of Amazon, in sprite of the existence of Taobao and JD.
Take Beidian for example. On Nov. 11th, 2017, the biggest annual online shopping festival in China, Beidian received more than 1 million orders, which were totally based on recommendation among users in social platform. Furthermore, China data analysis organization Analysys also released the latest statistics reporting Beidian’s MAU increase of 133.37% in March, according to its MAU Growth TOP 20 List of Mobile App in March 2018. That’s why Beidian is known as “a Social version of Tmall”.
With the rapid development of mobile internet and payment technology in China, Beidian is likely to revolute the traditional retailing model. So what we could do next?