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14 July 2021
WeChat groups provide huge retail sales boost in China
E-commerce & mobile retailGreater China
WeChat groups are now an essential marketing channel in China, and a new e-commerce report estimates that direct marketing through these groups could account for sales worth several trillion yuan this year.
Why it matters
The report from Azoya, a provider of e-commerce solutions aimed at helping brands grow in China, highlight how such groups, which offer so-called “private traffic” of tailored offers, discounts and personalised content, are increasingly important for both domestic and foreign brands in China which want to reach new customers and maintain brand loyalty.
In simple terms, private traffic is the equivalent of an old-fashioned customer email list. Nearly all this business takes place on China’s most popular social app by far, Tencent-owned WeChat, which has 1.2 billion active users monthly.
The growth of private traffic has been boosted by the trend towards e-commerce in general. E-commerce in China reached 37.2 trillion yuan ($5.75 trillion) last year, according to the Ministry of Commerce; sales via private traffic could be worth as much as three trillion yuan this year ($464 billion), Azoya forecasts.
The strategy of personalised offers is highly effective at building brand loyalty, with almost 41% of customers joining social groups just for the perks.
Users receive a customised experience that speaks directly to them and their areas of interest. For instance, personal make-up consultants can simultaneously offer professional advice and recommendations of relevant cosmetics according to skin type.
“Private domain operations are no longer the icing on the cake … they are the must-haves for retailers. It will become the new norm” – Franklin Chu, managing director of Azoya USA.