---
title: "Mengniu, Yili, Wahaha, Nestle Rush into Social E-commerce: Pitfall or Treasure?"
description: "Once dismissed as a scam, social e-commerce is now being embraced by major FMCG brands like Mengniu, Wahaha, and Nestle. This article explores the evolution from personal WeChat business to social e-commerce, the underlying forces driving its rise, and how traditional FMCG players can seize the next wave of opportunities."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-07-14"
language: "en"
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# Mengniu, Yili, Wahaha, Nestle Rush into Social E-commerce: Pitfall or Treasure?

> Once dismissed as a scam, social e-commerce is now being embraced by major FMCG brands like Mengniu, Wahaha, and Nestle. This article explores the evolution from personal WeChat business to social e-commerce, the underlying forces driving its rise, and how traditional FMCG players can seize the next wave of opportunities.

Click to read the original article for details.
When it comes to WeChat business (WeiShang), as "normal people," we have all turned up our noses at it: many WeChat businesses are no different from pyramid schemes, making money by recruiting heads, harvesting short-term profits by forcing inventory on distributors, and full of scams.
In contrast, pushing products steadily into stores, building visibility, and having them bought by consumers seems more real to traditional FMCG practitioners. We have all looked down on WeChat business.
**But things often go against our wishes, and this "reality vs. scam" dichotomy began to break down in 2018.**
In January 2018, Mengniu's official WeChat announced the launch of "Manran" fiber milkshake milk, wrapped in the cloak of new retail, sold in the form of WeChat business. Since then, Mengniu officially entered the WeChat business.
Three months later, on April 27, beverage giant Wahaha held a press conference in Hangzhou, launching "Liangyan Jingjing" and announcing its entry into WeChat business.
In August of the same year, Wahaha continued to increase its presence in WeChat business, launching "Xianqian Jiaren Quinoa" milkshake. At the same time, Dali Group launched its WeChat business project "Frota" new brand, and its first product, "Fuxiaoxian Cake," officially went online on August 18.
A month later, Mengniu launched "Mengniu Ningshun Collagen Peptide Crystal" targeting young women as a "beauty snack," sold through WeChat business channels.
Subsequently, in September, Panpan Foods announced its entry into WeChat business; Yili also joined, launching the "Xinshiji" brand, marking its first foray into WeChat business.
In October, Vinda Group entered the WeChat business platform "Yunji," and Unilever launched its new retail project "Hazeline Snow" for WeChat business. By 2019, global FMCG giant Nestle and Guangzhou Pharmaceutical Wanglaoji also announced their entry into WeChat business.
The above are publicly reported by relevant media; of course, there are also many brands conducting "secret" pilot projects.
Regardless of the outcome, an industry we once considered low-class and sneered at is now being recognized and even valued by brand owners, who are continuously increasing their investment.
**I believe these "high-IQ" brand decision-makers are not foolish; they must have seen something they don't want to miss.** Even if problems arise during the process, such as being exposed or complained about, it doesn't stop them from repeatedly launching new products and testing the waters.
Therefore, we have to re-examine the charm of "WeChat business." Even though it has been criticized by many, it hasn't hindered its development. Frankly speaking, today's WeChat business is no longer the simple friend-circle WeChat business; with the successive listings of Pinduoduo and Yunji, **WeChat business has successfully been crowned with the name "social e-commerce."**
**Reviewing the history of WeChat business's "whitening"**
Around 2013, the WeChat business 1.0 era. At that time, WeChat users reached 300 million. Anyone who could post on Moments could start a WeChat business.
From 2014 to 2016, the WeChat business 2.0 era. A period of野蛮 growth, during which product quality issues exploded. WeChat businesses began to be collectively blocked. The China Consumers Association's "Online Shopping Integrity and Consumer Perception Survey Report" showed that in 2016, among China's online consumption dissatisfaction rankings, WeChat business ranked first.
After 2017, the WeChat business 3.0 era. Individual and team WeChat businesses could hardly survive, and "branded WeChat businesses" began to emerge.
**As of 2017, the number of WeChat business practitioners in China had reached nearly 20.19 million. Some compared this with China's total population that year and found that one in every 69 people might be a WeChat business practitioner.**
In the same year, the first batch of "regular army" of WeChat business, Yunji, successively signed strategic cooperation agreements with dozens of domestic and international first-line brands, including Colgate, L'Oreal, and Be & Cheery.
In July 2018, Pinduoduo successfully listed on NASDAQ. On the other hand, Yunji became the second most valuable company in the WeChat ecosystem after Pinduoduo, with revenue reaching 13 billion yuan; Global Hunter, quietly making money, also saw its GMV exceed 10 billion.
In May 2019, Yunji landed on NASDAQ, and now its market value exceeds $3 billion.
Perhaps these facts cannot convince us practitioners. **"Social e-commerce is fierce, fiercer than a tiger."** A picture will show you the rise of social e-commerce.
**From personal WeChat business to social e-commerce. With the development and maturity of mobile internet, no practitioner in any industry can avoid it. Social e-commerce has become a mainstream business form and is continuously invading people's lives.**
Seeing this, it's not hard to understand why traditional FMCG giants are entering social e-commerce. This is not simply to seek sustained growth for their business by treating social e-commerce as a supplementary channel, but because decision-makers in FMCG companies genuinely feel the changes of the times.
**What "untold secrets" does social e-commerce hide?**
Why has social e-commerce risen so rapidly? Many would say it's because of mobile internet; people are online, living on the internet. Through strong relationships between people, the trust mechanism in the consumption process is solved.
But that's not the whole truth. Or rather, a single-dimensional explanation can hardly explain the key factors behind the rise of social e-commerce.
**1. Returning to the underlying consumer demand layer**
We are now in an era of material abundance, where consumers' definite needs are well satisfied. For example, if thirsty, buy a bottle of water; if clothes are old, buy new ones. These are spontaneous, proactive needs of consumers.
As consumption levels rise, consumers have more money and begin to aspire to a better life. But at this point, they often don't know what to buy. The demand is potential, half-hidden.
If I recommend a product to you because I've used it and found it good, I've verified it and given it my endorsement. Based on my familiarity with you, I think it suits you. **Without endorsement or recommendation, you might not even know you have such a need.**
At its core, Pinduoduo, Yunji, and various social e-commerce platforms satisfy uncertain needs. You don't know what you need or lack, and social e-commerce uses people as recommendation carriers to materialize uncertain or potential needs.
**Pinduoduo's Huang Zheng once said: "No one buys for social reasons; it's just that during social interactions, people happen to buy things." This perfectly explains why social interaction can drive product consumption.**
Have you noticed that many of our purchases now stem from recommendations by people we know or KOLs in fields we like? Only then do we buy.
"Someone I know is using it and it's good, so I'll buy it."
**2. Effectively unleashing the power of retail's edge**
Who exactly dominates or acts as the "recommender" in social e-commerce? Before 2017, in the WeChat business era, the earliest group were "stay-at-home moms," which later diversified to include offline salespeople, opinion leaders in various fields, and in the past two years, with the emergence of community group buying, small store owners.
According to incomplete statistics, **China has 50 million stay-at-home moms, with fragmented time and undervalued in the workplace; additionally, the development of e-commerce like Tmall and JD.com has impacted offline salespeople, with 60 million salespeople, one-third laid off and two-thirds idle for long periods during work.**
These two groups were the first to try and succeed, creating "overnight wealth" myths, which in turn attracted more people to join the "recommender" ranks, driving the rise of social e-commerce.
**3. Completion of internet business infrastructure**
**China's e-commerce has developed for ten years, and basic infrastructure such as warehousing, logistics, and payment has fully matured. WeChat's social ecosystem, with mature payment and mini-programs, allows users to conveniently and smoothly complete the transaction loop within WeChat.**
Of course, infrastructure here includes not only hardware but also "software"—**the standardization of business models**. For example, the typical S2B2C model, with decentralized front-end and centralized back-end.
In the past, e-commerce entrepreneurs had to consider logistics, training, IT, design, content, etc., but now platforms package all of this, so entrepreneurs don't need to worry. The front-end individuals only need to reach more groups through social sharing to complete the delivery experience.
Frankly speaking, traditional B2C e-commerce is a one-to-many centralized service. **Consumers experience rigid advertisements and cold product pages, without warmth or trust.** Social e-commerce, on the other hand, is a many-to-many decentralized service, fragmenting the connection between supply and demand. There is warmth, trust, and direct real experience after using the product between consumers and recommenders.
Material abundance brings "uncertainty" in demand, making how to impress consumers the key to business; the power of retail's edge, represented by stay-at-home moms and offline salespeople as the main recommendation force, is gradually unleashed with internet tools; the maturity of warehousing, logistics, payment, and related tools and models enriches the soil for social e-commerce.
It can be said that these three forces together have contributed to the vigorous development of social e-commerce in less than six years.
**How to grab this straw of social e-commerce?**
Recently, I chatted with an executive from the imported biscuit brand "McVitie's." He told me that on April 10 this year, McVitie's cooperated with Yunji, and in just one day, sales exceeded 12 million yuan. You might not see any "signs," but behind the calm, the sales of traditional FMCG companies are being eroded step by step.
**The penetration of social e-commerce into the industry is no longer what we "normal people" understand, only shining in beauty and daily chemical fields. Now, more and more beverage, snack, seasoning, and milk brands are joining the tide of social e-commerce, starting a new round of gold rush and exploration.**
The first half of social e-commerce (1.0 era), represented by Pinduoduo and Yunji, has ended. The second half (2.0 era), centered on refined operations and high-quality supply chains, is slowly approaching.
**What will the second half of social e-commerce look like? As a traditional FMCG practitioner, how can you seize the next round of dividends in social e-commerce? Tonight at 8 PM, social e-commerce expert Zhuang Jianzhong will reveal it for you!**


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