Youzan.com CEO: How Should Chinese Business Owners Utilize the “Wave Effect” in the New Retailing Age?

摘要: The basic landscape of consumer-end “new retailing” has emerged, as we see unmanned convenience stores and offline produce stores open one after another. However, how shall “new retailing” look like in the business-end?

(Chinese Version)

The basic landscape of consumer-end “new retailing” has emerged, as we see unmanned convenience stores and offline produce stores open one after another. However, how shall “new retailing” look like in the business-end?

During the 2017 annual meeting of Paidai.com, Bai Ya, CEO of Youzan.com, delivered a speech on “”. In the speech, he pointed out that against the background of “traditional retailing”, it could be really hard to conduct business as traffic on e-commerce platforms had already reached the ceiling and offline stores also find it hard to attract customers. However, thanks to the consumption upgrading, business owners could center around “people, goods, service and experience” in order to reform thier products and services.

To explain the mechanism to grab users via social media, he came up with the concept “wave effect”.

At the very first, most traffic came from WeChat Group and WeChat friends circle. Therefore, they were often referred to as self-driven and shared traffic. After WeChat rolled out WeChat Official Account five years ago, business owners began to run their WeChat OAs by themselves. What they needed to do was turn their regular customers into WeChat OA subscribers and encourage them to share posts in WeChat Groups and friends circle. By doing so, other users might be attracted to the post and follow the WeChat OA, thus creating a benign cycle. As a result, new subscribers would come “wave on wave”.

Bai also mentioned the driving effect of “WeChat Mini Program” in retailing. As to function layer, WeChat Mini Program allow marketing in various platforms, including WeChat Groups, WeChat OAs, page-based ads, WeChat Search, Nearby Stores, etc. As to application layer, WeChat Mini Program can be used to display, distribute, place and receive orders along with third-party. As to the bottom layer, WeChat Mini program includes a set of digitalized IDs and infrastructure for e-payment, coupons and even QR code, something Chinese consumers have been quite accustomed to.

To explain the changing trend of Chinese consumers, Bai borrowed the idea from Einstein’s renowned formula and concluded that:

Earnings=Merchandise×Customer*2

Bai also identifies the change in customers in the age of new retailing. Today, goods and service are increasingly becoming carriers in the consumption behavior, while what really matters is how many customers enjoy the service and how much they contribute.

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[The article is published and edited with authorization from the author @Su Jianxun. Please note the source and hyperlink when reproduce.]       

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.  

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