China’s WeChat leading the way

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While the titans of the digital era such as Facebook and Google (or its parent company Alphabet) look unstoppable at present they are not necessarily making a dent in the e-commerce space. Sure, their fellow titan Amazon continues to grow in its relentless manner, as Jeff Bezos initially wanted to call the company, but speaking at the recent Future of Payments roundtable, Adore Beauty founder Kate Morris said Facebook commerce has not been popular.

Morris believes buying through Instagram makes a lot more sense and it is a company that happens to be owned by Facebook. At the moment, buying through Instagram can be a frustrating experience. Consumers who click on an image are redirected to an external site to complete the transaction although many companies in the payments space are working on streamlining the process.

Yet at the same time as most Australians are looking towards Silicon Valley behemoths to come up with better shopping experiences through our social networks, China’s offerings are already expanding and maturing rapidly.

Ben McHarg, managing director of Evolution Health, says Australia is a long way behind what is happening in China.

WeChat in China is incredible. Everybody uses it, I think they’ve got 500 or 600 million active users a day. These users live their life through WeChat and they shop on WeChat,” McHarg says. “It’s predominantly through these almost like Amway-style systems of distribution where people sell to their networks, and that can be a close network of friends.”

‘Organic’ marketing

McHarg says the nutritional and complimentary health manufacturer’s sales have gone gangbusters in China and their Australian-made baby probiotic outsells the competition by 10 to one.

“Life-Space came in on the back of the infant formula boom and was seen as a logical extension. We’ve generated all these sales through social media buzz on WeChat,” he says. “They talk about it online, they review it and then that’s how it spreads organically through the community.

“It’s all social media driven so you buy search words and engage key opinion leaders online who might have 15 million followers in China and they’ll tell your brand story. It’s really old-fashioned marketing but it’s done digitally.”

McHarg says WeChat is dominant in China because it is mobile friendly.

According to Morris, WeChat works because they have managed to translate people’s influence directly into sales.

Another reason WeChat has moved into a position of dominance is it has developed its own payment solution.

“It’s so popular now that you can go to a local street takeaway and there’s a QR code that you can use your WeChat account to pay. So now, they’ve got the active users and the social part of it, as well as their own payment model.”

by Mark Eggleton
Financial Review

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