The Future of Social Media Marketplaces

Authored by: Simon Baggs, CEO | INCOPRO and  Partner and Head of Intellectual Property | Wiggin LLP, London
and
Chloe Jeffery, Analyst | INCOPRO

First launched in 2011, WeChat (Weixin) is a mobile messaging app that is extremely popular in China. The app is increasingly used for e-commerce. Currently, WeChat counts over one billion users and each one is a potential buyer.

The transition of WeChat into an e-commerce app started in 2012. By August 2013, WeChat Wallet was introduced. This was an integrated payment method that would allow users to make payments directly from their WeChat account. Subsequently, sales via WeChat went viral, and every user would be systematically exposed to adverts posted by sellers and friends on their WeChat Moments, comparable to the WhatsApp timeline.

WeChat Wallet
WeChat Wallet icon

 

WeChat Wallet interface
WeChat Wallet interface.

 

WeChat advertisers benefit from the huge amount of user data gathered by WeChat, which enables them to tailor their marketing strategies on the users’ habits and preferences. For instance, adverts would be sent out when users are on the tube and therefore more likely to scroll through the posts. In this way, by cultivating small, light-hearted spending habits, big profits are made.

Along with legitimate sellers, counterfeiters have also seen the opportunity of using WeChat for both promoting and selling their goods. This is typically done in three main ways: by setting up a WeChat shop, by using an ordinary user account, or by advertising on the Moments element of the platform.

A WeChat shop (Weidian) is advertised as a zero risk, stock free dream for sellers. To create one, you only need to register a shopfront, choose your stocklists, and paste product pictures into the shop. Without having to stock the supplies yourself, you can simply make the products available upon request. When searching for suppliers on WeChat, you will be surprised by the amount of sellers advertising “High imitation luxury products”.

 

WeChat stocklist ad
Example of WeChat stocklist ad: “High imitation luxury bags. Bulk order provider.

 

Private user accounts are often also used by Daigou (buy-on-behalf-of) and sellers with their own stock. WeChat offers a Robot add-on through which sellers can allow users to befriend them and start scanning through their catalogues without having to wait for manual approval. The same add-on also affords automatic response to customer queries and provides a service much like a digital shop keeper/sales assistant. This greatly helps big sellers and Daigou to manage their customers, optimise the buying experience and consequently boost sales.

 

Diagou private accounts
Examples of Daigou private accounts advertising various branded items.

 

Legitimate and counterfeit goods can also be promoted in Moments. Anyone on WeChat can re-post content from a WeChat shop or private account and publish it on their Moments. Furthermore, WeChat advertising enables registered companies to purchase and display promotional messages on the users’ private Moments. The visibility of the products represented in these posts/ads will then rapidly spread using the connecting power of the network.

 

Seller moments page
Example of a seller’s Moments page: 1) We only sell genuine products. 2) All stock comes from Italian outlets or official shops, and we have receipts for every item. 3) The item will be shipped as soon as the payment is received. We support EMT, bank transfer and PayPal. Shipping worldwide.

 

 

Counterfeit bags advert
Example of counterfeit bags advert on a user’s WeChat Moments.

 

At INCOPRO, we regularly investigate and enforce on WeChat on behalf of our clients. TALISMAN’s clustering tool picks up the connections between WeChat accounts, marketplace shops, e-commerce sites and any other social media accounts run by the same individuals, enabling a targeted and effective enforcement action.

While social media is shifting towards e-commerce and we all slip from chatting to buying, we at INCOPRO are committed to clearing illicit advertising and sales from the growing social media market.

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To find out more about how INCOPRO can help your brand protect itself in the ever challenging online environment, please contact us.