How Chinese Shopping Platforms Like Shein and Temu Found Success Against Amazon and Walmart
Chinese-owned shopping platforms Shein and Temu have made significant strides in the retail industry, rivaling major U.S. players like Amazon, Walmart, and Target. These platforms have gained popularity by focusing on fast fashion and influencer marketing, positioning themselves as the most downloaded apps of 2023 (Statista). But what sets them apart from their American counterparts? Lesley Gao, an expert in micro-mobility and ecommerce, highlights three key differences between U.S. and Chinese ecommerce that have given these platforms an edge.
The Concept of “Super App” and “Private Community”
One of the major advantages Chinese platforms have is the concept of a “super app.” Super apps like WeChat, Alipay, and Meituan combine multiple services into one platform, allowing users to chat, shop, pay bills, book appointments, and more without switching apps. These super apps also serve as customer relationship management (CRM) tools, enabling sellers to engage with customers through dedicated group chats. This direct and real-time communication fosters a sense of belonging and connection to the brand, creating numerous touchpoints for user interaction and increasing the likelihood of user retention and repeat business.
In contrast, the shopping journey with U.S. platforms is more fragmented. Users often have to switch between different apps to compare prices, read reviews, and make payments. This disjointed experience can be frustrating, leading to abandoned carts and lower customer satisfaction.
Influencer Marketing and the Creator Economy
In the U.S., influencers primarily rely on user-generated content (UGC) and platform algorithms to earn a living. Their income is largely driven by engagement metrics like likes, shares, and comments, which determine how much they can earn. However, these factors can be volatile, making influencer income unstable and subject to frequent changes.
In China, influencers, known as “key opinion leaders” (KOLs), take a different approach. They focus on direct sales to their communities through super apps like WeChat. KOLs have their own stores within these platforms, allowing them to earn directly from product sales without intermediaries. This setup provides influencers with a steadier income and better earning potential, eliminating the need to rely solely on likes and shares.
Accessibility of Products
China’s position as a global production hub gives it a significant advantage in ecommerce. Chinese-based platforms offer a wide variety of products at lower prices and with faster shipping times due to their proximity to supply chains. They can quickly adapt to market demands and get products to consumers efficiently.
In contrast, the U.S. heavily relies on imported goods, resulting in longer delivery times and higher costs due to shipping and import fees. This disparity makes it challenging for smaller creators and sellers to compete, as they lack the same quick access to products and low prices. The logistics involved in importing goods also lead to higher costs for consumers.
Lesley Gao’s Tips to Succeed in Both Markets
Drawing from her experience in both the U.S. and Chinese markets, Lesley Gao offers several ways for influencers and business owners to expand their audiences and maximize their earning potential in both regions:
1. Use centralized platforms: Utilize platforms that offer all-in-one tools for selling products. Having everything in one place streamlines processes, improves the shopping experience for customers, and increases earning potential.
2. Build and maintain private communities: Private communities provide a space for direct communication with customers, gathering feedback, and offering exclusive deals or content. When customers feel like they belong to a community, they are more likely to interact with content, share products, and remain loyal.
3. Partner with reliable suppliers and logistics providers: A good supplier and logistics partner can make a significant difference. Choose partners who can efficiently manage shipping and returns, setting your business apart from competitors.
Introducing Pear: Bringing China’s Ecommerce Success to the U.S.
To further enhance ecommerce in the United States, Lesley Gao co-founded Pear, an all-in-one shopping platform that combines online shopping with social media. Similar to WeChat, Pear allows businesses and influencers to set up shops, create group chats, and build private communities for direct engagement with customers. Additionally, influencers can create user-generated content (UGC) to drive sales. With Pear, customers can follow their favorite brands and influencers, browse products, read reviews, make purchases, and share their experiences all in one place.
A New Era of Ecommerce
As China’s influence in global ecommerce grows, it is crucial for U.S. brands and retailers to understand the success behind Chinese shopping platforms. Platforms like WeChat have established themselves as super apps by investing in research, development, and introducing new features. To stay ahead, businesses must continually evolve their marketing strategies and adapt to the wants and needs of consumers.
For valuable insights into both Chinese and American markets, follow Lesley Gao.
VentureBeat newsroom and editorial staff were not involved in the creation of this content.
