‘Social Commerce’ Blossoms On Mobile Taobao

On the way to becoming the world’s largest e-tailing market ($590 billion in 2015), online shopping in China has become a highly social activity.

Wary Chinese consumers don’t swallow advertising at face value and they don’t take vendors at their word—they check the internet for product reviews, swap links to favored products and seek out third-party opinions, especially those of people they trust. According to a recent McKinsey report, two-thirds of China’s consumers cite recommendations from families and friends as the most important factor in purchasing decisions. In the U.S., only one out of three people say the same.

In other words, in China, shopping is also sharing. So pronounced is this trend that Alibaba Group, owner of China’s largest online marketplaces, insists it’s not so much in the e-commerce business these days as it is in the social commerce business. And since more sharing equals more sales, the company is doing everything it can to make it easier for users to interact with one another when shopping online—going beyond offering the standard e-commerce fare of user-generated product recommendations and ratings by establishing online communities, encouraging shoppers to share photos of their latest online purchases and even adding monetary incentives to encourage greater social participation.

The tip of the social-commerce spear is Mobile Taobao, Alibaba’s hugely popular mobile shopping app. With 369 million monthly active users, Mobile Taobao is “not only China’s, but the world’s largest social commerce platform,” according to Jiang Fan, who leads Mobile Taobao’s business at Alibaba.

The app, which offers access to Alibaba shopping sites Taobao Marketplace, Tmall.com and Juhuasuan, generates up to 20 million product reviews every day, and involves 5 million users sharing content with friends. Users “like to share whatever they find—fun things, fun merchandise—with their friends through social media,” Jiang said last month during an investor conference at Alibaba headquarters in Hangzhou, China. “We don’t view ourselves [merely] as a shopping app,” he said. “Our community is not only about us serving the consumers, but consumers themselves helping each other.”

To drive greater customer engagement, Mobile Taobao has been developing new social commerce features within the app. One such addition is the hosting of special interest groups called quanzi (circles) where hobbyists and other like-minded individuals can talk about their pastimes and favorite products. Taobao says it now hosts more than 1,000 circles covering interests such as wedding planning, fishing, infant care and many others. “We want to get people together to allow them to discuss and generate content that can serve more people,” said Zhang Jiehan, a Taobao product manager.

Photo sharing is also a hit with users, said Jiang. “Every day after [mobile shoppers] complete their transactions they like to share what they’ve bought,” he said, “so we have a specific app for buyers to show off their products.” This feature currently generates about 1.5 million daily reviews, he added.

One of the most popular social functions on Mobile Taobao is a Q&A feature called Wendajia (ask others) that lets shoppers with questions about a particular product get answers from members of the Taobao community. Wendajia helps free consumers from the drudgery of combing randomly through product reviews or resorting to asking sometimes biased and unhelpful vendors for answers. “The essence here is mutual assistance,” Zhang said. “The new feature builds a direct and effective communication channel between people who have purchased and people who want to purchase.”

Crowdsourced Q&As have been around for a while, of course. But Wendajia is innovative in the way Taobao identifies and proactively reaches out to users who can provide feedback. When a buyer submits a question, Taobao employs big data and a sophisticated algorithm to spot members of the online community who are most likely qualified to answer the question, typically those who have recently purchased the product. After zeroing in on up to 12 potential candidates, the system then sends out messages to their smartphones soliciting responses.

Wendajia has proven to be a boon to buyers because they don’t have to wait hours or days for fellow shoppers to stumble on their questions and provide answers. One-fourth of all questions are answered within one minute and 60 percent of questions within 10 minutes, Jiang said. “This greatly optimizes the pre-shopping decision process,” he said. Every day, it receives as many as 1 million questions, and 2 million consumers participated in answering.

China’s widespread adoption of smartphones and the reach of the mobile internet has undoubtedly contributed to the growth of social commerce by making participation easy, ubiquitous and dynamic. Still, Mobile Taobao isn’t relying solely on user enthusiasm and social goodwill to foster greater user involvement.

Last year, Alibaba rolled out a program to encourage bloggers, writers and noteworthy online experts to post content on Mobile Taobao by paying them small sales commissions for product recommendations that lead to purchases. More recently, Taobao began offering similar incentives for the general public to encourage social participation.

Through an upgrade to Taobao’s existing membership program, which previously awarded points only for online spending, users can earn additional points by posting product reviews and links, answering consumer questions and interacting with the Taobao community in other ways. While there are no cash awards, amassing points entitles users to benefits such as coupons for car-hailing app Didi Chuxing and service upgrades such as late check-out times at participating hotels.

In social-media-crazed China, such perks may not be necessary. Just being part of the conversation seems to be enough to keep people involved. According to media research firm ComScore, the average Mobile Taobao user spends more than 25 minutes a day on the app, compared with Amazon Mobile’s 9 minutes.

As Taobao shopper Cici Wang notes, social-commerce features like Wendajia have value “because of the volunteer work offered by ordinary users, which makes it trustworthy.” Indeed, having armies of consumers keeping each other informed and vendors honest is seen as a positive development as e-commerce morphs into social commerce, says Zhang, the Taobao product manager. Digital word-of-mouth provides merchants with continuous feedback and compels them to maintain quality products and services.

“In the long term, it drives healthy growth of the platform,” Zhang said.