微信电子商务_在2019之前你需要知道什么（英文版）-17mb

WeChat E-Commerce: What You Need to Know Before 2019

Core Content

This report provides an overview of the WeChat e-commerce ecosystem, highlighting key trends, opportunities, and challenges in the Chinese market. It is tailored for those with a foundational understanding of e-commerce in China, including major platforms and shopping festivals.

Main Points

1. The "10% Winners, 90% Losers" Rule

• In the Chinese e-commerce landscape, only 10% of online stores and SKUs generate significant revenue, while the remaining 90% struggle to sustain themselves.
• This rule reflects the highly competitive nature of the market, where most businesses fail to capture meaningful traffic or sales.

2. Intense Competition

• 75% of Chinese internet users are served by 35 apps or less, indicating a saturated market with limited user attention.
• As smartphone user growth slows, customer acquisition costs (CAC) rise, making it harder for new entrants to gain traction.

3. Rising Costs

• Major e-commerce platforms, such as Tmall and JD, have seen increasing CAC relative to average revenue per user (ARPU).
• Even e-commerce upstarts like Pinduoduo face challenges with rising CAC, as seen in their MAU growth from Q1 2017 to Q1 2018.

4. WeChat as a Growth Opportunity

• Despite the challenges in traditional e-commerce, WeChat is becoming a key battleground for growth.
• Mini-Programs are playing a crucial role in driving traffic and enabling new forms of e-commerce within the WeChat ecosystem.

Key Developments in 2018

1. Pinduoduo Inspires

• Pinduoduo's social fission strategy (incentivizing sharing via red packets, discounts, and freebies) has influenced how brands approach WeChat e-commerce.
• Its integration into chat groups and Moments has made it a significant player in the ecosystem.

2. Mini-Programs Getting There

• Mini-Programs are gaining traction but still lag behind apps in terms of user traffic.
• During the 2018 618 shopping festival, Mini-Programs saw a 66x increase in orders, with 164 million users and 53 million new users engaging.
• Key players like JD and Tencent are experimenting with different Mini-Program functions, showing a diverse approach to e-commerce within WeChat.

3. Everyone's Diving In

• Major e-commerce platforms and startups are entering the WeChat ecosystem through Mini-Programs or 微商 (micro-commerce).
• Investment activity in WeChat e-commerce surged in H1 2018, with notable funding rounds for companies like 企迈云商, 云集, and 礼物说.

Outlook for 2019

1. KOLs Place Pressure on Luxury E-Commerce Platforms

• KOL (Key Opinion Leader) Mini-Program stores are expected to become a top channel for luxury products.
• Companies like LOOK have acquired leading KOLs, leveraging their fan bases for sales.
• The top 10 KOLs on LOOK drove ~RMB 50 million in monthly sales, with a total active fan base of 20 million.

2. Everyone's a 微商

• 微商 (micro-commerce) is evolving into a more social and gamified model.
• 云品仓 has simplified the process of opening a Mini-Program store, with a ~10% commission on sales.
• Brands like Coffee Box are using gamification to incentivize sellers and customers, with 500,000 virtual coffee shops opened and 10% of them generating sales.

3. The ¥0 Store

• The "share to pay" model is becoming more prominent, with Pinduoduo offering price reductions based on shares and entries.
• This model can potentially bring prices down to zero, but is applied only to select SKUs.
• In 2019, new entrants are expected to leverage this model to create hero SKUs and drive buzz.

Food for Thought

• The report raises several questions about the future of WeChat e-commerce, including:
  • What products are best suited for the social fission and ¥0 store models?
  • How can brands better connect with 代购 (drop-shippers) through these models?
  • Are there legal barriers to offering commission-based incentives?
  • Do sellers view these models as a game or a business?

Conclusion

WeChat e-commerce is a highly competitive and rapidly evolving ecosystem. While only 10% of players and SKUs are successful, the platform offers significant growth opportunities through Mini-Programs and social commerce. In 2019, KOLs, gamified micro-commerce, and share-to-pay models are expected to reshape the landscape, pushing the boundaries of how consumers interact with brands and products in the WeChat ecosystem.