social commerce opportunity

China is on the way to becoming the world’s largest e-tailing market – valued at $590 billion in 2015 – as online shopping has become a highly social activity. Marketplaces such as Taobao have recently developed new apps and services in order to reap the benefits of this untapped opportunity.

Wary Chinese consumers don’t swallow advertising at face value and they don’t take vendors for their word—they check the internet for product reviews, swap links to favored products and seek out third-party opinions, especially those in their social groups. According to a recent McKinsey report, two-thirds of China’s consumers cite recommendations from families and friends as the most important factor in purchasing decisions. In the US, only one out of three people say the same.

In China, shopping is also sharing

Social commerce trend is so pronounced in China that Alibaba Group, owner of China’s largest online marketplaces, insists it’s not so much in the ecommerce business these days as it is in the social commerce business. And since more sharing equals more sales, the company is doing everything it can to make it easier for users to interact with one another when shopping online—going beyond offering the standard ecommerce fare of user-generated product recommendations and ratings by establishing online communities, encouraging shoppers to share photos of their latest online purchases and even adding monetary incentives to encourage greater social participation.

The tip of the social-commerce spear is Mobile Taobao, Alibaba’s hugely popular mobile shopping app. With 369 million monthly active users, Mobile Taobao is “not only China’s, but the world’s largest social commerce platform” according to Jiang Fan, who leads Mobile Taobao’s business at Alibaba.

“[On Mobile Taobao,] we want to get people together to allow them to discuss and generate content that can serve more people,”  Taobao product manager.

Mobile Taobao: a new platform to facilitate peer-reviews

One of the most popular social functions on Mobile Taobao is a Q&A feature called Wendajia (‘ask others’) that lets shoppers with questions about a particular product get answers from members of the Taobao community. Wendajia helps free consumers from the drudgery of combing randomly through product reviews or resorting to asking sometimes biased and unhelpful vendors for answers. “The essence here is mutual assistance,” Zhang said. “The new feature builds a direct and effective communication channel between people who have purchased and people who want to purchase.”

Wendajia has proven to be a boon to buyers because they don’t have to wait hours or days for fellow shoppers to stumble on their questions and provide answers. One-fourth of all questions are answered within one minute and 60 percent of questions within 10 minutes, Jiang said. “This greatly optimizes the pre-shopping decision process,” he said. Every day, it receives as many as 1 million questions, and 2 million consumers participated in answering.

Read more: upcoming chatbot revolution in Southeast Asia

China’s widespread adoption of smartphones and the reach of the mobile internet has undoubtedly contributed to the growth of social commerce by making participation easy, ubiquitous and dynamic. Still, Mobile Taobao isn’t relying solely on user enthusiasm and social goodwill to foster greater user involvement.

A version of this appeared in Alizila on July 26. Read the full version here.

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