The Future of Social Commerce.

 

American social media has failed retailers and small businesses by making Advertising the center of its internet. In this article we'll elaborate a bit of why this is.
While Ads make Google and Facebook rich (+ Instagram, YouTube, LinkedIn, Amazon, Pinterest and Snapchat for that matter), it has severe consequences for how retailers will bounce back from the Covid-19 pandemic impacting the retail, hospitality, restaurant, hotel and small business sector. It also means the eradication of many (retail sector) jobs that impact women, Latin X and African American populations more.

Unfortunately Ads are costly for small businesses and independent retailers and a major expense even for even behemoths like Amazon. But Ads aren't consumer centric, they are profit centric. They don't put the "customer" first, they put profits first and it undermines free-market capitalism.

This means America has become irrelevant in how social commerce innovation is occurring, and it's having very tangible spillover effects into how the Chinese internet is providing more innovation and more opportunities that benefit smaller businesses.

It's so striking, it's fair enough to say that the social commerce trend in China, is ironically "democratization social media" for retail, the SMB, commerce and the travel/hospitality/restaurant sector. In this article we'll discuss how Chinese mobile innovation has taken the Chinese internet to a different point, that benefits small businesses. It's all tied to something called social commerce.

The rise of live streaming in China is enabling small businesses and consumers to improve E-commerce adoption. It’s a meta trend that’s typically called ‘social commerce‘.
Lessons in the Future of Retail, From China

Social Commerce in 2020 in China has entered a golden age. Micro video apps like Douyin, Kuaishou, Alibaba, Mogu, and so many others are changing how video interacts with shopping. China is doing a better job at connecting the dots between live streaming, gaming and the attention economy of its internet with E-commerce sales in general.

Social Commerce in China has come a long ways since 2018.

Social commerce has been far more prominent in China than in the US. To put that into perspective, social commerce sales in China totaled $186.04 billion (RMB1. 285 trillion) in 2019—nearly 10 times the number of sales in the US, which reached $19.42 billion last year.

Here then is yet another domain where Chinese consumers are more mobile native and young people are more involved in consumerism directly, not just as passive shoppers. It makes a world of difference for China’s varied apps market and how they introduce pragmatic utility into their product.

The utility in the apps ecosystem of China vs. the Ad emphasis in America is striking. China’s ecosystem appears much more consumer-centric, rather than relying on businesses to pay to reach consumers. This may be the central flaw of the American internet, controlled by monopolies like Google, Facebook and their shady companies like YouTube and Instagram. The shady part comes from not really empowering creators, retailers and small businesses.

Investment in the social commerce space by Tencent’s WeChat—particularly with the 2017 launch of its light apps called Mini Programs—has certainly helped garner trust and bolster usage among the general public. Chinese mini-programs are gateways to light versions of apps and ByteDance has emerged as a leader in China’s attention ecosystem with the best AI in apps.

China’s social commerce approach to retail is the future of retail and for small business retailers it’s fairer than Amazon’s bulldozer approach to E-commerce sales. The use of social media in the context of e-commerce is gaining traction in China. The booming mobile generations and the accelerated growth of social media usage are fueling the growth of social commerce. Pinduoduo and JD have really pushed innovation forward, not only Alibaba, obviously.

In comparison, Instagram, Walmart, Amazon and Shopify have for the most part failed in any resemblance of social commerce at scale. Think about how young consumers learn to shop online.

Social commerce revolutionizes consumers’ purchase journey. Social media is now an integral part of consumers’ daily lives. It not only is a platform for consumers to look for product information and share experience but also a popular marketplace for consumers to buy online. Young consumers, in particular, are more likely to make purchases on social commerce sites based on friends’ or KOLs’ recommendations.