---
title: "Social E-commerce Channels Have Become One of the Channels That Cannot Be Ignored, Following Traditional Distribution and Shelf-Based E-commerce!"
description: "The classic chain of traditional channels is from brand owners to agents, distributors, retailers, and consumers, delivering value from wholesale to retail. When the economic level of our era has developed to the point where we no longer fear for safety and survival, we are granted freedom. With freedom and tools, we find that organizational walls are opened and boundaries are broken. — Zhuang Jianzhong, Founder of Meinian Changxiao. When discussing channels, there are physical channels and e-commerce channels. When talking about e-commerce, most people refer to Tmall and JD.com, which we can define as shelf-based e-commerce. So far, a new channel is emerging as the third most watched channel after physical and e-commerce channels, which we define as social e-commerce channels."
author: "庄建忠"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-08-31"
language: "en"
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# Social E-commerce Channels Have Become One of the Channels That Cannot Be Ignored, Following Traditional Distribution and Shelf-Based E-commerce!

> The classic chain of traditional channels is from brand owners to agents, distributors, retailers, and consumers, delivering value from wholesale to retail. When the economic level of our era has developed to the point where we no longer fear for safety and survival, we are granted freedom. With freedom and tools, we find that organizational walls are opened and boundaries are broken. — Zhuang Jianzhong, Founder of Meinian Changxiao. When discussing channels, there are physical channels and e-commerce channels. When talking about e-commerce, most people refer to Tmall and JD.com, which we can define as shelf-based e-commerce. So far, a new channel is emerging as the third most watched channel after physical and e-commerce channels, which we define as social e-commerce channels.

"
The classic chain of traditional channels is from brand owners to agents, distributors, retailers, and consumers, delivering value from wholesale to retail. When the economic level of our era has developed to the point where we no longer fear for safety and survival, we are granted freedom. With freedom and tools, we find that organizational walls are opened and boundaries are broken.
**— Zhuang Jianzhong, Founder of Meinian Changxiao**
"
When discussing channels, there are physical channels and e-commerce channels. When talking about e-commerce, most people refer to Tmall and JD.com, which we can define as shelf-based e-commerce. So far, a new channel is emerging as the third most watched channel after physical and e-commerce channels, which we define as social e-commerce channels.
I don't know if you agree, but based on my personal experience and thinking, I believe it is necessary to put this channel on par with traditional and e-commerce channels, and to some extent, it should be given more attention.
Why is that? Since last year, these names have gone from unheard of to well-known. These logos and names are social e-commerce platforms that have emerged in the past year or two, with GMV ranging from over 1 billion to thousands of billions like Pinduoduo. According to incomplete statistics, there are no fewer than 200 such platforms, and each one is growing rapidly. Some are sustainable, while others are just fishing in troubled waters.
Overall, I suggest everyone pay attention to emerging channels. Compare such channels with the two previous channels I mentioned. First, what are the differences compared to previous channels?
The classic chain of traditional channels is from brand owners to agents, distributors, retailers, and consumers, delivering value from wholesale to retail. When the economic level of our era has developed to the point where we no longer fear for safety and survival, we are granted freedom. With freedom and tools, we find that organizational walls are opened and boundaries are broken.
Originally, brand owners had bosses, managers, and employees, and so did agents, distributors, and retailers. When the organizational boundaries of enterprises begin to disintegrate due to freedom and technology, a new state emerges—**the rise of the individual.**
People can break away from closed organizations and freely connect in an ecological society. It is precisely because of this era that we have discovered a new pathway—the social e-commerce channel, which opens the boundaries of different enterprises and opens up each individual for free combination.
What people commonly refer to as we-business, social retail, and social e-commerce is precisely such a channel: a free combination of free individuals, forming a team organization based on a common brand image and common value proposition, through the internet and the distribution of interest relationships, thereby achieving product delivery and channel construction.
Specifically, in we-business, there are brand operators at the brand end, and the team leaders in the chain play the same role as distributor bosses in traditional channels, except that traditional bosses need to pay employee wages, while in this channel chain, there is no binding employment contract between each other, only collaboration and cooperation between people. This is the difference between social e-commerce channels and traditional physical channels.
Now let's look at the difference between shelf-based e-commerce represented by Tmall and JD.com and social e-commerce. To some extent, social e-commerce is a return after the fragmentation of physical channels. The shelf-based e-commerce of Tmall and JD.com, which we saw earlier, attempted to break through the middle layer of the traditional physical channel system, hoping to reach C-end consumers directly.
After more than a decade of development, it has been found that this is a viable channel, but it is definitely not the whole of channels, nor even the mainstream channel. It may play a certain value and role in the process, but it is definitely not the whole of channels. Let's re-understand traditional shelf-based e-commerce. In its operation, several keywords are considered: traffic, conversion rate, transaction/deal, after-sales. This follows the operational thinking of the industrial era, where the mission is completed once the goods are sold.
But think about it: if you simply operate based on traffic, it's like opening a fast-food restaurant at a train station. Imagine there is a steady stream of passengers at the train station. Would the fast-food restaurant owner care about consumer experience? Would they care about quality? Probably not so much, because there is no shortage of traffic. Such opportunities are not available to everyone. You can open a small shop next to a school, but can you open a fast-food restaurant next to a train station?
Social e-commerce has made some breakthroughs compared to traditional shelf-based e-commerce thinking, returning to a people-centered channel.
**1. Shift from "traffic thinking" to "fan thinking."**
Fan thinking is like opening a restaurant in a residential community. The people who come to eat are all from the community, and everyone sees each other often. I believe the owner will definitely care about quality and customer service. This is the operational thinking that distinguishes social e-commerce from traditional traffic-led shelf-based e-commerce.
**2. Shift from "conversion rate thinking" to "fission thinking."**
All e-commerce platforms hope that customers will return after completing their first transaction with us. We call this warm traffic, which is traffic with human touch. They hope that after customers consume, they will come back, and preferably introduce new people to the store. Therefore, there must be fission thinking rather than one-time transactions.
**3. Shift from "transaction thinking" to "empowerment thinking."**
Let us share our advantages and core skills with others, so that others can have considerable traffic. The ultimate goal is to work hand in hand to build the brand well. Empowerment thinking exists all the time.
**4. Shift from "after-sales thinking" to "community thinking."**
In the past, due to technical issues in communication and interaction, brand owners could not interact with all consumers. Now, the internet and mobile internet have become very rich and diverse, even called the WeChat internet. In the ecosystem based on the WeChat internet, the cost of interacting with users has become extremely low, and the feasibility and methods of operation have become very diverse. For social e-commerce channels and operations, community thinking will replace the after-sales thinking of traditional shelf-based e-commerce.
From the entire business chain, whether it is concept generation, product design, R&D, manufacturing, pricing, investment attraction, warehouse construction, distribution, planning and execution, communication, transaction completion, after-sales, regardless of who executed it in the past, this series of work in the social e-commerce channel model can allow our channel partners, users, and consumers to participate in any functional link. It is a channel where multiple identities can blend and merge.
What benefits does identity blending bring? It brings fundamental differences in concepts and ideas. In the past, it was "you" and "me," now it is "we." We are doing this together, sharing concepts and ideas, creating and sharing together.
As an operator of social e-commerce, what is the core content in the operation process? I call it the "4×4 operational architecture."
Horizontally, it is exactly the same as traditional operational logic: we need to do traffic generation, investment attraction, sales promotion, and service work. Vertically, we need to build a sufficiently flexible IT system, which is built on the public infrastructure of the internet and the Internet of Things (WeChat, Douyin), and can achieve rapid connection. The content matrix should produce content related to the brand's value proposition, corporate philosophy, and brand culture, continuously supplying it to the channel. The community matrix and training matrix will not be expanded due to time constraints.
The 4×4 needs to be continuously cycled and repeated in the process. In traditional channels, brand owners often do investment attraction periodically, once, and with low frequency, but in social e-commerce channels, investment attraction should be done all the time, every day, so the specific operations will be somewhat different from everyone's understanding.
All work is not only done online; all links in the process should have offline paths to complete. So in daily life, you can often see social e-commerce teams doing ground promotion in your community or under office buildings. They are doing landing work, and they will also combine with physical stores, or even directly land physical stores.
In the operation process, we need to distinguish five types of people. For social e-commerce channels, in addition to the operator, there are five major categories of participants:
(1) Fans: they know you and follow you;
(2) Users: they have transactions with you and become your users;
(3) Sharers: because they have experienced it themselves, because they like it, or out of curiosity, or for profit reasons, they share your products or projects;
(4) Professional sharers: they believe that participating in this can become a source of income for personal life, so they choose it as a career, at least part-time;
(5) Team leaders: they take this as their career, and their main job is management.
Generally, there are two main strategies in operation: 1. Top-down strategy: the platform or brand owner first obtains team resources, and together with the team, promotes fission to gradually cover more users and fans. 2. Bottom-up strategy: through media coverage, spread information about the product itself, or its functions, brand, category, etc., to attract more users to participate and do training and conversion. These are the two main strategies in social e-commerce operations, and they can be fully integrated.
Most social e-commerce project parties have not yet landed physical entities in the short term, so they do not have the advantage of physical presence, and thus cannot have natural traffic. They need to achieve channel activity through one activity after another. 1. Activities aimed at stimulating channel agents (making channel partners willing to sell); 2. Activities aimed at C-end consumers, making them willing to buy (group buying, bargaining, coupons). The daily operation of social e-commerce is completed and driven by one activity after another.
Finally, let me bring you two real customer cases. The first case is Jinlihai, a post-90s entrepreneurial team. Their vision is to let everyone share the beautiful things around them, and this concept leads the team to gather together. In the project launch stage, they first entered with food, and later will gradually introduce more daily necessities. This company organizes its operation system with a unique value proposition, with the slogan "Encounter a Better Life," attracting young people who share the same value proposition and life interests. There are many good things in the market, but the good things that can move them and resonate with them are what they really want. They don't care about brands, but about taste!
Jinlihai adopted a top-down approach. They have overseas study backgrounds, so they have deep interactions with many overseas purchasing teams. At the project launch, they proactively communicated with those purchasing team leaders who have a large number of professional sharers. After gaining the support of 20 influential and charismatic team leaders, they quickly opened up the market. On the day of launch, they achieved 100,000 yuan in retail sales, and it continues to grow rapidly. Why were they able to attract team leaders and consumers? Because their value proposition is good. At this point, they have skipped the simple concept of products and SKU categories. They are based on the concept of "sharing beautiful things in life," and they will definitely be picky about the taste and quality of products in their selection.
The second case is a more down-to-earth social e-commerce case—Meiqiao Huamei Shengqi (Eyebrow Artifact). Eyebrow drawing is a technical task. Their product allows consumers to stick the eyebrow stencil on their eyebrows and easily draw a good eyebrow shape. The market for this product is highly competitive, and they have made many improvements in the product. They upgraded the material. Traditional ordinary eyebrow stickers can only be used once, but their product can be used two or three times after peeling off. However, after launching to the market, even such a quality product found it difficult to quickly gain favor from agents and consumers in the channel.
So, in terms of traffic generation, this company made a bold attempt. Since the use scenario of this product is very performative, the brand owner conducted comprehensive and all-round training for the agent team, enabling their agents to master short video shooting skills, master the skills of uploading short videos to platforms like Weishi and Douyin, and also do the operation of the short videos themselves, making the videos become popular recommendations on the platform, thereby gaining more exposure. At one point, the Eyebrow Artifact dominated the popular homepage of Kuaishou.
Using these very effective methods, they gained a lot of attention in a short period. Because the videos themselves were attractive, they brought in a large number of consumers. By pulling consumers into WeChat groups, they taught them product sharing and sales skills, converting them into agents. In just under 4 months, they converted more than 10,000 individual agents. So far, they ship 8 million yuan per month, quickly becoming a billion-yuan-level emerging we-business brand.
Today, everyone has a different concept of social e-commerce. Some still hold rejection and doubt, but more people have begun to try to contact it, or even actively embrace social e-commerce.
I personally believe that now is a very good time to enter social e-commerce, for several reasons. After the budding stage starting from 2013, it has been 4-5 years. WeChat itself has greatly improved its adaptability and regulatory capabilities for such commercial behavior. At the end of last year and the beginning of this year, WeChat banned nearly 100 million accounts because behind these accounts were machines, which goes against the real interpersonal trust that social e-commerce expects.
Brand owners' self-regulation. Since this year, many first-line brands have entered the social e-commerce field. The entry of first-line brands has brought confidence to the channel, and consumers' confidence in the quality of the products themselves has also greatly increased.
The maturity of practitioners. The earliest batch of people entering this field were many stay-at-home mothers. They did this because of their own economic source of life, but in fact, they were not well trained. Recently, a large number of college graduates have entered this field, becoming practitioners of we-business and social e-commerce.
According to incomplete statistics, the number of we-business practitioners has reached 30 million, and the vast majority of these people are women. Moreover, these women are increasingly different from traditional we-business practitioners in terms of education and skills. Every year, there are 6-7 million college graduates, and a considerable number of female graduates will join we-business because they like free work. In fact, it is not easy for them to find suitable jobs in society now.
The supporting services for social e-commerce have also become complete. There are many self-media and marketing service institutions around the we-business field. Meinian Changxiao itself has also entered from providing marketing and brand management consulting services for traditional industries and enterprises to providing strategic and marketing consulting services for we-business platforms and brand owners.
You can review a phenomenon: 30-40 years ago (my generation), our parents would tell us not to buy things from private stores because we might buy fake goods, but the growth of private stores was not limited by these warnings, but gradually grew because it conformed to the laws. 15 years ago, you would hear parents say, don't buy things online, there are fakes online. In fact, e-commerce has grown irreversibly, now accounting for nearly 20% of total social retail sales. Maybe now you are warning your children not to buy from we-business, but think about what will happen in 5 years or 10 years?
The above content is from Mr. Zhuang Jianzhong, founder of Meinian Changxiao, who shared "Social E-commerce: Channel Advantages and Operational Essence" at the FDIC 2018 China FMCG Digital Innovation Conference, edited and organized by New Distribution for readers.
Click **Read Original** to see more highlights of the 2018 FDIC China FMCG Digital Innovation Conference...
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