Alibaba's Revolutionary Social Commerce Leads the Way

If you’re interested in what’s going on with big business in the tech world, it pays to spare a glance at China’s online marketplace.

Globalization seems to make terms like “East ” and “West” practically obsolete, if not socially incorrect. Despite being worldwide, internet-driven technologies and advertising are ironically still largely location-based.

So, if you’re admittedly used to the “western worldwide web”, then you are surely aware of the dominance of Amazon’s online marketplace, but in the Eastern Hemisphere, things are quite different: In China, Alibaba reigns supreme.

Alibaba is a huge name in Chinese and Indian e-commerce, and their recent success is due in no small part to their efforts in bridging the gap between social media and e-commerce.

Let’s put this into perspective. When you have an app that users are using to shop an average of seven times a day, for up to 25 minutes, you have an app that very clearly keeps people’s attention.

In the business world, that means engagement, which is basically the gateway drug that leads users down the path of conversion (from viewer to customer.)

And, it doesn’t hurt to have tons of reviews and comments on that app, either.

Oh, and that wasn’t just an example. I just accurately described Alibaba’s Taobao, an online marketplace that seeks to provide all the wonders of Social Commerce upon its users and parent company.

The Benefits of Social Commerce

Social commerce is, at its most basic level, a synthesis between social media and commerce.

This is a marketplace that gives users tools to communicate with other users, either via reviews and comments or, in the case of Taobao, chat rooms based on shared interest.

We all know how Facebook uses sophisticated algorithms to match advertisements to users that would be interested in them, but Taobao’s algorithms take it a bit further by matching users to other users based on similar interests.

By connecting people and giving them a platform to communicate through, users can pool information about a product to make sure they want to buy it.

And apparently, they do want to buy it, as evidenced by Alibaba’s recent numbers.

Taobao boasts around 80 million users, allowing their parent company, Alibaba, to rake in the dominant share in China’s e-commerce marketplace.

For that matter, other companies like WeChat have jumped on the bandwagon to boost their sales as well.

An interesting article over at AdvertisingAge tells the story of Knorr, a brand for restauranteurs who made good use of WeChat’s social features during a campaign aimed at chefs.

The company rose to 1 million subscribers on WeChat and enjoyed a whopping 21% rise in sales.

Social commerce works because it helps connect people, which can help immensely for products trying to gain the trust of potential consumers.

Looking at the effect on China’s marketplace, it’s hard not to see how social commerce is the next big wave in online business.

Above all, social commerce proves how open source collaboration is profitable and does lead to economic value.

Growing at What Rate?

To be fair, there are doubts about the strength of China’s conventional, manufacturing-dominant economy as the minimum wage rises and the yuan reaches its all time high.

It is true that parts of the economy are slowing, but others are actually expanding.

As China transitions from an economy based primarily on manufacturing to one based on consumption, it makes sense for the manufacturing sectors to slow down while the services and consumption sectors expand.

For this reason, Alibaba President Michael Evans insists that the company’s social commerce model will dominate.

A Platform for Online Business

Of course, non-Asia based companies are well aware that social media has become crucial for their sales efforts, and thus social commerce efforts are their second-largest investment.

The model works, and it works so well that it could fundamentally shift the dynamics of how businesses operate.

By turning your marketplace into a platform for people to communicate, businesses have a shot at getting seen as actual people instead of faceless, soulless entities.

Just take a look at Wendy’s and their ‘saucy’ tweets: they inspire clickbait articles, and more importantly, user engagement. We’re sure you’ve heard about Carter Wilkerson and his 3.42 million retweets that earned him a year’s supply of Wendy’s chicken nuggets.

We’re sure you’ve heard about Carter Wilkerson and his 3.42 million retweets that earned him a year’s supply of Wendy’s chicken nuggets.

HELP ME PLEASE. A MAN NEEDS HIS NUGGS pic.twitter.com/4SrfHmEMo3

— Carter Wilkerson (@carterjwm) April 6, 2017

People struggle for a reply from Wendy’s twitter account, regardless of the fact that Wendy’s is not a real person. The ‘man behind the curtain’ is just a savvy social media manager and his or her team.

The ‘man behind the curtain’ is just a savvy social media manager and his or her team.

According to a report by Business Insider, Twitter has seen some success in providing a platform for NBA and NFL teams to sell tickets, and if you take a look at their bullet points, most of them suggest adding a ‘buy’ button to social media platforms like Facebook and even Pinterest.

It seems like the real take away from the success of the Chinese market is to let people buy directly through the app that is giving them their social media fix, and that makes sense.

After all, how often have you bought something because a friend or family member told you that it was worth it?

How often have you waited to make a purchase until you could hold something in your hands, or trust someone who has?

When you can communicate with people who may already have the product you are looking at, you may have the best advertisement possible.

I think I’ve exhausted my point, but let me leave you with this quotation from Joseph Tsai:

“To capture the attention and imagination of young people you have to provide more social features.”

That bit about capturing the ‘attention and imagination’? Yeah, that’s the very basis of salesmanship.

If social media is enabling businesses to do that, then expect to see more features in the Facebook marketplace soon.