Douyin, China’s version of the short video app, is already doing this. Last month, Douyin held its first shopping festival for Chinese New Year between January 4 – January 20. The festival brought in 20.8 billion RMB in those 16 days, with 14.3 billion users tuning in to watch livestreams, Dao Insights reported.
Arnold Ma, China marketing expert and founder and CEO of digital creative agency Qumin, gives an insight into how brands are making sales on Douyin and the future of social commerce globally.
Inside Retail: How does Douyin differ from TikTok?
Arnold Ma: As Douyin is a social commerce platform, creators can include a shopping link in their Douyin video. Users can click the link to make a purchase on the Douyin store or Taobao store, which offers users a one-stop shopping experience. Brands and individuals can also open their own Douyin e-commerce stores to sell products.
Douyin’s livestreaming feature is for brands and influencers to promote and sell products and it’s also for influencers to have daily conversations with their followers to maintain viewership. TikTok does not currently have a shopping feature or livestreaming feature.
Douyin provides an enormous opportunity for all kinds of brands, enabling them to integrate e-commerce easily. For example, brands can have an official Douyin account, open a Douyin store, create their own hashtags etc. There are various features that brands can use to engage with audiences and promote their campaigns/products on this platform.
On TikTok, brands can open official TikTok accounts, but the content is mainly for engaging with the audience, and sharing cool and creative videos.
From the different user interface between Douyin and TikTok, we can see that the Douyin platform is used for livestreaming, e-commerce and search purposes, while TikTok is used for learning skills and entertaining content. Douyin also has more features than TikTok, allowing for broader appeal both commercially and for consumers.
There are four rankings on Douyin, including: Douyin hot topics ranking, celebrity ranking, music ranking and brand ranking. TikTok doesn’t have any ranking yet.
Also, Douyin’s hot topics search is based on the latest news in China, while TikTok’s hot topics search is based on popular hashtags and campaigns.
Currently, Tiktok has more free growth than Douyin. If you want to become a top-listed creator or brand and want to enter Douyin, you need to work with ByteDance China to get more exposure as the platform now focuses more on commercial interest.
Inside Retail: Can you explain how the Douyin shopping festival works?
AM: Douyin’s strategy for shopping festivals is to launch livestreaming with famous celebrities and influencers to attract users. In livestreaming rooms, livestreamers post shopping links so that users can click links to buy products. Since there are so many products that livestreamers need to promote, the shopping links in livestreaming rooms are listed in order, so livestreamers only need to mention the number of the shopping link instead of the name of the product. This allows greater ease to promote, but also greater ease for the consumer to purchase that particular product.
Douyin also offers subsidiaries, discounts and free gifts to the audience, encouraging them to participate in shopping festivals.
Inside Retail: How do brands get involved?
AM: As mentioned, brands can open official Douyin accounts and Douyin stores on this platform. Brands can also add their own hashtags, official websites, contact information and VIP Rooms to Douyin profiles. For luxury, cosmetics and car brands, they typically like using the VIP Room to show their latest products. For example, Gucci launched VR shoe try-ons, their latest collection, current campaigns and fashion shows on its Douyin VIP Room.
Brands can use Douyin for marketing purposes, by collaborating with influencers and celebrities; launching campaigns with hashtags and video filters (similar to TikTok); or participating in Douyin shopping festivals or campaigns
Brand rankings are based on how popular they are on Douyin, which helps brands to become better known in the market. Users can see the brand ranking in different industries, including: cosmetics, car, mobile phone, sport, luxury, food and beverage, home appliance, daily [essentials] and fashion.
Inside Retail: How would you describe the growth in social commerce in Asia in recent years and how do you expect it to grow in other regions?
AM: Social commerce growth has been nothing short of explosive in China. But we are still at the tip of the iceberg. Retail social commerce sales in China would grow to $242.41 billion (RMB1.675 trillion) in 2020, accounting for 11.6 per cent of total retail e-commerce sales in the country.
It’s important to take advantage of platforms at this stage of their growth circle, focus on community growth, first and foremost. Then convert later. And with social commerce, they are able to convert directly to customers. This is a huge benefit.
For the rest of the world, I think we are a long way from critical mass, or proper adaptation of social commerce. The main reason is customer behaviour, or rather, legacy behaviour. When mobile internet became usable in the west, we already had 905+ internet penetration, behaviour had already been cemented in web 2.0 or most of our online experience, specifically ecommerce.
So any mobile experience thereafter has been built on top of the web 2.0 experience, rather than an “app experience”. People really have no reason to move from a browser-based web 2.0 experience to an app experience for commerce.
But this didn’t happen in China. Most people’s very first experience of the internet is in a mobile environment, so tech companies in China are able to build a mobile experience from scratch without legacy behaviours to service and cater for. Hence social commerce, or app-based commerce took off quickly in China. My prediction is that we will skip social commerce altogether and focus on the next gen in retail – live commerce. And it will come from a brand new platform, rather than the status quo of big social channels.