Friendly Business

by+Zi+Mo

The first thing Guo Yujing does in the morning is check orders at her online fruit and drink shop on WeChat， a popular social media platform launched by Chinese tech giant Tencent. About a year ago， she and several schoolmates at Xuchang University in Henan Province opened the WeChat-based shop. So far， it has amassed nearly 20，000 followers and earns hundreds of orders daily.

“We plan to integrate online and offline services，” declares Guo. “Our next step is to hire cooks and open an eatery that sells takeout via our WeChat account.”

Monetizing Social Networking

In fact， with the popularity of mobile internet， countless online stores on social media platforms like WeChat have mushroomed in China in recent years. The term“WeBusiness” was even coined to refer to the phenomenon.

WeChats active user count has surpassed 700 million. It has been widely recognized that WeChat has become an e-commerce promotion platform as attractive as microblogging. In fact， WeChat is shifting from solely a social networking to a micro-business portal.

According to the Research Report on Chinas WeBusiness Industry 2014-15 released by iiMedia Research Group， the number of online stores based on utilizing WeChat and other social media platforms reached 9.14 million in 2014， and the figure is estimated to hit 11.37 million by the end of this year. As increasing numbers of traditional offline businesses swarm the WeBusiness realm， the market size will see further expansion in next few years.

Industry insiders explain that unlike the e-commerce portal Taobao， WeBusiness represents a new decentralized form of business. The biggest advantage of WeChat-based stores lies in the platforms capacity to integrate both online and offline traffic， creating a “sticky” place where users not only send messages to one another， but also shop without leaving the app. Moreover， WeChat-based stores can target potential customers more precisely with the help of big data technology， thus greatly enhancing service and maximizing advertising.

As traditional B2C （business-tocustomer） sites already hit a downturn， retailers are now showing greater interest in building sales channels based on social networking platforms in an attempt to create a membership system like a “friend circle” through WeChat. In this context， Sun Taoyong， CEO of Chinas leading WeChat-based service provider Weimob， predicts that WeBusiness will see explosive growth in next three to five years.

Along with an enormous number of small businesses， many industrial giants have also opened stores on WeChat. Among them are world-renowned cosmetics brands such as Procter & Gamble， Proya， and Danz， as well as home appliance giants Midea and Haier. Even Amway， one of the worlds largest direct sales companies， has set up a store on WeChat. With their powerful supply chains and complete service networks， those industrial giants are changing the ecology of the WeBusiness industry. More importantly， they introduced a new promotion model featuring social networking between brands and users， rather than simply seeking profit.

WeBoom

It takes only a minute to register a store on WeChat. “The WeBusiness era has arrived and the Taobao era has passed，” declares one enthusiast of the new e-commerce model. “The tool for online shopping has shifted from PCs to mobile terminals. Retailers who are most attractive to mobile users will prevail.”

Despite the fact that WeBusiness makes online shopping easier and more convenient， it has caused some problems， of which the most cited is its tendency to transform “friend circles” into “marketing circles.” A recent survey conducted by China Youth Daily Social Survey Center indicates that 78.2 percent of WeChat users are bothered by promotional information received through their “friend circles，” and some even choose to quit friend circles due to oversaturation of advertisements.

As a matter of fact， the negative impacts of excessive marketing on WeChat have already emerged. According to Wang Yi， CEO of Wecet， a consulting company for WeChat-based businesses， selling through friend circles on WeChat doesnt work as well as it once did， and about 90 percent of WeChat-based stores have suffered sales drops， and some already collapsed.

Moreover， as something brand new， WeBusiness remains in an unregulated state. Some dealers sell counterfeits on WeChat stores， and customers find it hard to seek remedies when they are unsatisfied. “Typically， customers cannot confirm dealers identities and get official receipts when buying in WeChat stores， so their complaints are rarely handled and their rights cannot be protected，” remarks Cheng Xusen， an associate professor from the E-Commerce Department of the University of International Business and Economics.“Authorities must design and enact relevant regulations.”

Industry self-discipline is also important. Chen Yuxin， who created the concept of WeBusiness in China， recently published an open letter calling on WeChat businesses to avoid selling knockoffs or posting excessive marketing information in “friend circles” on WeChat.

Room to Grow

In just more than a year since its emergence， WeBusiness has swept across the country. The trend is largely attributed to the tremendous user base and social networking function of WeChat. However， social networking can be a double-edge sword. Some like to buy things via friend circles， and others consider their circles personal and hate the invasion of privacy. Where will WeBusiness go in the future？“WeBusiness is supposed to cre- ate a ‘tiny but pleasant online shopping environment， instead of becoming another Taobao or Tmall，” comments Tang Hongbo， an expert from the Institute for Cultural and Creative Industries at Beijing Normal University. “WeChat should afford users the right to determine how or if they accept advertising from WeChat shops. Meanwhile， its transaction system needs to mature along with its credit guarantee system， complaint system， and customer relations management system to enable standardized regulation of WeBusiness， which will effectively integrate online and offline resources.”

Fortunately， WeBusiness is regaining rational operation after spurts of rampant， disordered growth. It is not only a new business model， but also a new lifestyle. The key to its future success is as much about the quality of its products as methods of marketing.