Is the future of shopping social?
By Line Heidenheim Juul
Social shopping is an estimated $300 billion market in China. Giants like PinDuoDuo has grown to 700 million users in just five years by offering cheap goods and letting consumers drive prices down and user numbers up. Their platform is one example of the multitude of ways to influence consumer behavior, but they are not the only ones. TikTok in China has long been integrating ecommerce, and that could come to the US too. Can social be the future of social shopping?
Join! Join! Join!
Imagine you could get a 90% discount on anything from strawberries to furniture to clothes. But it would require you to instigate a purchase and invite your friends, family, or other social media connections to buy with you within a specific timeline. You can use your social media platforms and make special groups to nudge others to see the good deal you are looking at, and influence them to purchase with you. “Social Shopping” is more than the classic group buy – it gamifies and socializes the shopping experience, and encourages the user to leverage their own network to drive down prices. This model helped PinDuoDuo to grow to 700 million users in just five years,
What is social shopping anyway?
It takes its foothold in the social experience rather than the task of shopping itself, drawing on group activity engagement and social exchange. Contrary to the well-known centralized group-buying model, that we are quite familiar with, we see players like PDD take a slightly different approach. In a classic model like Western GroupOn, the customer can see price-reduced offers from vendors on a platform, purchase it there, and go to the vendor to cash in the service or product. But if we look at e-commerce giant PinDuoDuo (PDD), who have crafted themselves as the leader of social commerce or social shopping, it happens differently and more decentralized. Here, users are met with a personalized feed of products and a promise of further discounts, if they get can “build a team” on their social media, getting others to join in and purchase the same product. They can also see the price if they chose not to buy with others, and they can see what others are buying. The saving can be small, but significant for some. TikTok in China (Douyin) has also been integrating direct shopping in its social media platform for years now, long before Instagram and others.
Gamification and imitation of the physical shopping experience
PDD themselves say that they aim to imitate the social aspect of the physical shopping experience. Their app is designed to scroll for entertainment, rather than to search for a specific item only. Like TikTok, or Douyin, as it is called in China, PDD also build an algorithm that learns what you want to see, based on what you look at, like and spend time on. Naturally the e-commerce platform also offers livestreaming inside the platform for direct purchase, and in any livestream you can chat directly to the host and ask questions or give comments and virtual hearts.
If we look closer at their platform, the user is met with several elements that gamifies the entire experience. First of all, the price can be driven down if you can get other users to buy with you. In addition, there are also time-limited offers, and there are constantly pop-ups of what others are buying at any given moment. You also get rewarded with points for checking in daily that can be turned into discount vouchers. Furthermore, you can achieve more discounts if you leave reviews or comments on for example branded products. This is key, as many consumers in China rely more on reviews than classic advertisements.
Mini games and daily nudging
Inside PDD you also have a mini game, where you can grow a mango-tree. Once you have nourished it and gained enough points via your other activities on the platform and watered it, by opening the platform every day, you may earn enough points so that you can receive a whole package of actual, physical mangos. This type of game, where nourishing is centerpiece to rewards, is seen on several other platforms as well – like mobile payment platform, Ant Financials “Ant Forrest”, which grants users “green points” for Co2 friendly behavior, and lets users plant a tree in the real world. Ant Forrest also nudges the user, to remember to collect the points, as contacts and friends can steal points and water each other’s trees, further adding a social aspect to the game.
Social to acquire – gamification to keep
Acquiring new users to a platform can be very expensive. PDD has done this cheaper, because it has strong ties to the biggest social media in China, Wechat that has more than 1 billion users. They can seamlessly share group-buys and nudge each other and pay directly. The gamification elements that ensure further discounts and daily engagement can give exposure for vendors to users, but it also helps PDDs algorithm to personalize user´s feeds. The optimized feeds and entertainment value that consumers experience rather than just a simple transaction experience may keep users around.
Social is already here
Fueled partially by Covid, retailers, brands and platforms have had to rethink “normal” during the Pandemic. Some have been pushed years ahead in the past 12 months. And there is good reason to look to China for inspiration, as platforms here are ahead, and constantly experiment. One learning from social shopping is to utilize existing users. Western platforms normally reply on celebrity influencers or spokespersons. They could be inspired to gamify or reward user-based reviews more heavily instead, so that shoppers engage more, and can rely on other users’ comments, not only those of famous influencers. The decentralization of social aspects is also fascinating. The functions of sharing purchases in social circles to gain discounts as a group, may be relevant in certain categories or in certain price-sensitive consumer segments. The integrated user-experience and seamlessness in social media platforms to ecommerce platforms is another element that Western platforms often do not have. If Chinse consumers browse their TikTok (Douyin), they can easily buy products with a few clicks as the e-commerce is fully integrated and more often than not, they can chat and engage with the seller directly.
The future of shopping may very well be more social, as more and more retailers are experimenting with online versus offline, but the basic need for enjoyment, entertainment, trustworthy recommendations, and social engagement for shoppers persists.
