Industry News

Social commerce emerges as the new capital for brands to reach customers

Global e-commerce keeps evolving with the rise of social commerce, which blends online shopping and social media to connect retail companies with consumers and their networks.

As companies and consumers migrate online during the pandemic, social commerce is starting to take off in the US.

We’ll look at best practices American and foreign brands can learn from China's booming social commerce market to fuel their own online growth.

Livestreaming boosts brand buzz

When it comes to the most talked-about new digital marketing models of the moment, one has to mention livestreaming.

Hermes kicked off livestream events for its Fall/Winter 2021 Womenswear show in New York, Paris and Shanghai on Weibo on March 6, attracting an audience of nearly 6 million viewers. Hermes has often taken a different approach to reach and appeal to Chinese consumers. Compared to using its own website for last year's show, Hermes use of livestreamed social commerce on Weibo was well-received by its Chinese audience and enabled the fashion brand increase its reach and engagement with audiences, as well as reduce user acquisition costs.

Hermes also held a collection preview in Shanghai before the show, which earned 50 million views. These impressive results could change the perception that high-end luxury houses still view social commerce with skepticism.

Livestreaming does not always have to come down to sales; it can be geared toward raising brand buzz. Cartier, a top luxury brand, set up its jewelery exhibition on Taobao Live, Alibaba’s livestreaming arm, and 770,000 viewers flocked to the livestream within 2 hours. This session was the first time Cartier used a livestream for a high-end jewelery exhibition, which is usually a private and extravagant affair for a small number of people, exclusively for Tmall consumers during the Double 11 Singles Day last year.

Now a growing number of luxury brands such as Hermes, Cartier and Louis Vuitton are using livestreaming for influencer campaigns and communications. As more than a sales channel, livestreaming gives brands deep, direct, real-time communications with customers, which can profoundly influence what they buy.

Little Red Book is ideal for beauty brands to embrace their target base

Little Red Book, also known as “Xiaohongshu” (小红书), is one of China’s most prominent and fastest-growing social commerce apps. Chinese consumers are increasingly turning to social media for product reviews. Unlike other platforms where they have to sort through many types of content to find reviews, Little Red Book is a place they can go to easily find what they seek.

Why is Little Red Book's community unique in China? There are three main functions on the Little Red Book app: create content, browse community and shopping. The appeal of Little Red Book was that users could turn to a trusted, tight-knit community of like-minded users for authentic reviews and advice.

According to Ocean Engine, a Chinese marketing platform, among the top 1,000 merchandise items on Little Red Book in the second half of 2020, beauty and skin care accounted for the greatest proportion at 67%, followed by makeup at 21%. These numbers indicate that the vast majority of discussions focus on beauty-relevant content.

Last year, Chanel Beauty started to target millennials and heavily focus their China marketing efforts on Little Red Book. The brand launched its brand official account in August 2020. In the beginning, Chanel only posted official advertising images and simple commercial descriptions, which proved to be too much of a hard sell for Little Red Book users.

For brand marketing, the most significant advantage of Little Red Book is that it is based on high-frequency interactions in the community. Brands can achieve rapid spread through word-of-mouth from users and drive omnichannel trading volume.

Chanel changed its strategy, starting to host more Little Red Book exclusive interactive activities, posting makeup tutorials with Chanel products and asking followers to share posts with their friends to get gifts. And the results are fascinating. Chanel has become one of the most influential beauty players on Little Red Book.

Chanel encouraged users to post content with a customized hashtag about a limited product set to win a gift to promote its Christmas special edition. Chanel Beauty is a good example of beauty brands that target younger consumers by sharing campaigns on Little Red Book. Instead of selling products directly, they choose to share makeup tutorials, which makes users more willing to experiment and learn about the brand.

Little Red Book is currently in the best position among all social media platforms for beauty brands’ marketing and growth, especially for new brands. Little Red Book's real user sharing experience and content seeding is the best source of word-of-mouth for new beauty brands.

Tapping into the popularity of video with the hottest platform -- Douyin

As the original TikTok, China’s Douyin short-video app has earned soaring popularity and social commerce potential, as luxury houses have crammed into the platform. For luxury brands, building brand presence is one of the early goals for a localized strategy that attracts Chinese consumers.

Why Douyin? Because Douyin has a user base of young, mostly female consumers with high-potential spending power. As of January 2021, the ByteDance-owned platform boasted 600 million active users daily -- up from 400 million users last year.

From Dior and Prada taking the lead in Douyin two years ago to Gucci rising to the top this year, luxury names such as Balenciaga and Saint Laurent also are looking forward to this digital treasure trove.

Gucci debuted its official brand account on Douyin at the end of April 2020, with eye-catching and novel content. This Italian brand amassed 670,000 followers within 3 months. Gucci is currently ranked No.1 in the number of fans among luxury brands, so how has Gucci made this happen?

Its first video featured two elderly ladies in teddy bear coats doing dance moves on the street with matching text “let’s dance and shake together.” It is noticeable that Gucci not only released its content but welcomed a wave of interactive user-generated content imitations to the platform. The content's creativity has attracted several users to spontaneously produce 1,700+ videos of the same Gucci dance, with a number of views and likes, allowing the brand to reach more potential consumers.

Gucci's launch on the video-sharing platform was regarded as a “sore thumb” for the brand to bridge the gap between Gucci’s luxury brand and Chinese millennials on those video-sharing apps.

Dior also performed brilliantly on Douyin, with celebrity-generated content combined with viral dress-up scenes. The Dior x Air Jordan co-branding campaign and dynamic editing of the content matched Douyin users' interests and had excellent exposure.

The creative content that has generated widespread play is due to aligning with Douyin users’ content preferences. The content strategy connected the high-end brand to young consumers. It triggered consumers to take the initiative to engage, interact and comment. Though Douyin’s down-to-earth vibes seem like a bold contrast to luxury’s fancy image, the platform provides broader access to Chinese millennials and Generation Zers, who will soon become global luxury’s most important target group.

 

Franklin Chu is managing director US for Azoya International, a provider of turnkey cross-border e-commerce solutions to assist retailers looking to expand into China through a cost-effective and lower risk method. To date, over 35 retailers in 11 countries are partnering with Azoya to expand into China with ease, including French fashion retailer La Redoute, Australia’s largest pharmacy group, Sigma, as well as Feelunique, the largest online beauty retailer in Europe.