SHANGHAI — It is projected that 40 percent of Chinese consumers will be Centennials by 2020, according to a white paper released last month by data intelligence company Kantar, and Tencent. It is therefore no surprise that brands are eager to appeal to, and resonate with, this new consumer group.
This young demographic, otherwise called Gen Z, is beginning to turn its back on the more traditional forms of social media in the country, such as WeChat and Weibo, which they see their parents using. Instead, they are using alternative social media platforms targeted at a younger audience, often with a greater focus on short video sharing as a way of self-expression.
Last year, two popular platforms with China’s under-30-year-olds were Douyin, a video platform utilizing artificial intelligence, as well as the lifestyle platform Xiaohongshu, both of which are increasingly blending the boundaries of social media and e-commerce.
Last year, video sharing app Douyin, developed by Beijing ByteDance Technology, moved into social e-commerce, initially starting at the beginning of the year by linking video content to Taobao stores before launching a Douyin in-platform shop, allowing any user with an account to open their own store. According to figures released by the company last year, the number of active users seen on the platform daily was 150 million.
Xiaohongshu, known as “Red” in English, allows users to share photos, product reviews, fashion, beauty and lifestyle content as well as shop, all within one platform, and is described as a social-plus-business model. As of last year, the platform had over 100 million users and targets urban women ages 19 to 35. Cosmetic brands have found particular success on the platform by using homegrown KOLs, aka influencers, to affect buying decisions.
The merging of social media and e-commerce in China is not uncommon. “It is the nature of China digital start-ups that successful platforms also need to build a whole digital ecosystem,” said Chenyin Pan, China manager at Fireworks, a digital technology company working on social e-commerce in the country.
“The key difference between Western platforms and Chinese counterparts, in my opinion, is that the Chinese digital environment sees less value of a platform being unique and original. Any good idea can be ‘borrowed’ relatively fast in today’s environment. So what Chinese platforms are doing instead to grow and retain users is building their own ecosystems so they will have more consumer data, and more data will feed the initiatives to make it easier to create the next quality products,” said Pan.
Douyin has launched under the name TikTok in the U.S., which was downloaded on Apple’s App store more than 104 million times during the first half of 2018, becoming the world’s most downloaded app in that time period. However, the U.S. version currently has a limited range of features compared to the Chinese app, meaning that the Chinese Douyin could be a roadmap for the future of blended social media and e-commerce in the West.
“China and the U.S.’ digital environments are different in the sense that in the U.S., Facebook, Amazon and Google have been regarded to function with distinct roles. Whereas in China, platforms are more willing to invade in others’ territories. So, I think TikTok will face some obstacles to roll out e-commerce in the U.S., especially when Facebook and Instagram are still in the early phase of social commerce integration. Having said that, IoT can develop at a speed exceeding anyone’s imagination,” said Pan.
At the end of last year, it was reported in Chinese media that ByteDance, operator of Douyin and TikTok, is set to launch a messaging platform, called FlipChat, to challenge the dominance of popular Chinese messaging platform WeChat, which is owned by Tencent. Competition between ByteDance and Tencent has been escalating, with the latter launching multiple short video-sharing apps in an effort regain market share in the all-important Gen Z segment.