Social sellers: A new weapon for brands on WeChat

Grassroots entrepreneurs are taking over WeChat as more and more users (let’s call them social sellers for now) are selling products on it. By posting pictures and descriptions in their 'Moments' (the app’s content-sharing section), they utilise their own circles of friends and word-of-mouth to reach hundreds of thousands of potential customers.

To support and professionalise consumer-to-consumer sales, Tencent (the company behind WeChat) launched weidians (微店), so-called “mini stores”, earlier this year. Users are able to display products, manage orders and award friends who recommend products. An increasing range of products from shoes to cosmetics to healthcare products is being sold.

However, the social connection between sellers and buyers provides a sense of credibility and uniqueness that “traditional” mini stores often cannot offer. According to our observations, most sellers use their normal WeChat accounts for sales as they want to avoid the RMB 30,000 deposit necessary to open a weidian. A weidian's functions aren’t worth the hassle to switch, and sellers do just fine with their regular WeChat accounts (see example below, where a user distributes luxury products by posting pictures and descriptions on her WeChat Moments).

The sales activities of major brands on WeChat look rather tame, with companies offering a full shopping experience, like Xiaomi or Coach, being the exceptions. Most brands regard WeChat mainly as a tool for promotion and customer service, since technical restrictions have often prevented them in the past from expanding their sales activities.

Tencent has a different overall strategic direction in mind: WeChat is supposed to become a “super-app” in the everyday lives of users instead of a sales channel for brands. But whether brands are making the move for e-commerce on WeChat or not, they face a similar challenge: branded platforms often lack awareness and traffic. Research by eMarketer from November 2014 shows that only 17.7 per cent of WeChat users follow brands. This is in stark contrast to the prevailing image of WeChat being a marketer’s bonanza.

In the future, partnerships with social sellers could enable brands to make better use of the possibilities WeChat has to offer. Through social sellers, brands could connect with users in a meaningful and sales-effective way. In China, inner social circles have a stronger influence on buying decisions than they have in Europe or the US, thereby increasing the potential impact of social sales.

From a branding perspective, social sellers are entrepreneurs who already have the necessary experience in handling web sales. They have strong social networks consisting of both potential brand ambassadors and customers. They should not be perceived as pushers, but as people who provide their networks with special sales deals and a unique range of carefully-selected products. They could be sneaker enthusiasts, wine connoisseurs or experts in any other consumer-relevant segment.

In contrast to popular key opinion leaders (KOL) who often cooperate with brands on Weibo, social sellers would be less known in most cases. But word-of-mouth amplification, spreading through WeChat’s communication circles, could make them an even more interesting tool. Through social sellers, brands could connect with hundreds of thousands of users AND realize sales at the same time. On the other hand, some KOLs also might see WeChat sales as a tool to make money from their image and reputation. The Chinese actor Chen Kun already uses his WeChat profile to sell special product editions crafted in cooperation with renowned designers.

Obviously, partnerships with social sellers will be more suitable for some than others. Niche brands could utilise this approach to slowly build awareness and sales among a social network, and to create a digitalised and decentralised sales and promotion network. Brands need to find new ways to utilise WeChat's social sellers. We believe in social sales because this approach brings together brands, influencers, consumers and purchase opportunities so conveniently in one app.

Philipp Dittes is a consultant at Globeone Shanghai, and Tatjana Martens-Pearce is managing director.