Social selling
Reborn from the old model
Social selling 團購 (Tuángòu) offers products and services at significantly reduced prices on the condition that a minimum number of buyers would make the purchase. Making the sacrifice of small profits for more frequent turnover, merchants can offer discounts for group purchases below retail prices.
But it’s not the first time a craze for products purchased in large quantities or with friends at reduced prices emerged in China. The rapid rise of online shopping and social commerce paved the way for its newfound traction.
2018: $4,3 billion
2020: has become one of the most popular industries, reaching $13,6 billion.
2022: forecasted to reach $15,5 billion
LEADING PLATFORMS IN CHINA
Social selling is the latest buzzword in China e-commerce, with the hashtag term collecting 4.7 billion views on Weibo. Seeing the scale of the success, the e-commerce giants have launched their own group buying platforms, a very good choice since the trend has only increased due to COVID outbreak.
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BUSINESS MODEL
1. One is through casual organization. Interested parties gather together and schedule a purchase for a product, which a designated community leader facilitates.These individuals usually come from the same communities – physical locations like neighborhoods and apartments and digital spaces like niche or hobby groups and forums.
Main area of consumption: food, basic necessities, electronics ...
2. The second method is more organized. Influencers or key opinion leaders (KOLs) use social media and other platforms to gather followers to purchase a product en masse, essentially organizing a group-buy. Influencers sell a product in a limited quantity or within a specified sale period, usually with discounted offers.
Main area of consumption: beauty, fashion, lifestyle
INFLUNCERS ENGAGEMENTS
In China and Taiwan, promoting social selling on social media through KOLs became very popular about 2 years ago. Brands partner with influencers to reach a large audience and optimize their sales.
The influencer will post relevant informations on their accounts:
Brand introduction
Personal review
Promotion period
Discounts/promotions
Purchase link
Presentation of the product through videos, live shows, Q&A form, post, story/reels, replying questions in the comments.
Advantages
Offers last longer
Compared to live show sales, consumers have more time to evaluate or do some research on the product
Enjoy a better discount
No need to sign up to webstore
KOL share their real opinions + replying replying to consumer’s questions
Marketing materials: either provided by the supplier or created by the KOL
Easy way to order (avoid wasting time): fill in the order sheet, delivery informations, payment; or simply +1 in the comment
Different from usual sales period = rule out competition
Brands don’t need to invest on MKT to attract consumers = the audience of the influencer has high engagements
A promising future
The excitement of social selling has never quite gained traction in the West as it has managed to do in China.
The pandemic has accelerated online transactions in China, where consumers are looking to go as simple and convenient as possible. Initially intended for purchases of basic necessities, the phenomenon is spreading and increasingly affecting the beauty and fashion sector.
Even luxury has not escaped: High ticket items have unwittingly become the target of bargain shoppers looking to brag online.The recent “Shanghai Debutante” craze of splitting costs illustrated a novel way to buy and there was speculation that such schemes could ignite new, and possibly profitable, business models.
Social selling is very common in digital communities, that’s why brands should make good use of this strategy.