A couple of days ago, I struck up a conversation with a particularly beautiful WeChat business lady in a group for Danjie Entrepreneurship. I casually asked if she made a lot of money doing WeChat business. Unexpectedly, she firmly denied being in WeChat business, claiming she was in the "CDM Consumer Direct Marketing system," and she seemed somewhat agitated and angry.
Feeling bewildered and disdained, I decided to use my limited resources to conduct a detailed analysis of "the only industry in China where the poor can turn their lives around—WeChat business."
This article will answer the following questions:
Why do so many people want to do WeChat business and are doing it?
Why is WeChat business an industry where most lose money and a few make money?
Can becoming a store owner on WeChat business platforms like Yunji, Dalinjia, or Global Catcher make you money?
Why does WeChat business spread so quickly, and what is its essence?
Why are super-large companies like Xiaomi also doing WeChat business?
How can small and medium brands use WeChat business thinking for market promotion?
If I must do WeChat business, what should I pay attention to?
The following content will take 15 minutes of your time. After reading this, you will have a new, systematic, and thorough understanding of WeChat business.
01 Early WeChat Business Never Sold Products
At the end of 2013, WeChat's active users exceeded 350 million. The following year, 2014, WeChat business emerged and rapidly expanded. In the next two to three years, Moments were filled with various unbranded products, mainly women's products and skincare.
At that time, WeChat business was basically "eight out of ten selling face masks," with Qiaoshisui face masks being a typical representative.
In early 2013, the face masks developed by Qiaoshisui were not selling well. Founder Wu Bin tried various methods and channels, but consumers did not accept the new brand, and inventory pressure grew, threatening the project's viability. Disheartened, Wu Bin gave the masks to friends. Some found them good and shared them on Moments. Unexpectedly, the masks sold out quickly.
Months later, Qiaoshisui spread across China's Moments and revived. A year later, Qiaoshisui, with no formal sales staff, sold over 400 million yuan worth of masks solely through WeChat business channels. At its peak, Qiaoshisui even sponsored several variety shows on CCTV and Hunan TV, becoming a myth of wealth creation.
Qiaoshisui was one of the earliest WeChat business brands to grow, conquering the market with a single category. Similar products include Liby's laundry sheets, Jiangzhong Group's steam eye masks, One Leaf's face masks, and Weiyin's Yidu eye patches.
The Moments of this type of WeChat business are distinctive, generally looking like this:
They are active in tourist destinations worldwide, surrounded by red wine, steak, beaches, sea breeze, luxury watches, and LV bags. Sometimes they even meet with former US presidents. They appear confident and are typical successful women combining money, wisdom, and beauty.
But behind the screen, what is their life really like?
They work from dawn to dusk, carrying a dozen phones and having a dozen WeChat accounts. Their daily efforts are not focused on promoting products but on developing downlines to hoard inventory. They fabricate stories of sudden wealth in Moments, showing off transaction records, overseas trips, luxury cars, and extravagant lifestyles to attract newcomers. Then they use brainwashing tactics to tell newcomers that to do WeChat business, you must stock up; the more you stock, the more motivated you are to sell, and only then can you make money. They constantly tell others how easy, simple, and valuable this business is, and crucially, how profitable.
Some even hire fake big customers to make downline agents stock large quantities.
There was a news report about a woman named Jia, a newcomer selling face masks. A customer added her on WeChat to buy, and they conducted several transactions, buying one or two boxes each time. After building trust, the customer proposed buying 30 boxes but insisted on seeing Jia's inventory before paying. Not wanting to lose the big order, Jia stocked 30 boxes from her upline. Later, the customer requested an additional 70 boxes, and Jia stocked again. After hoarding 100 boxes, the customer disappeared. With over 50,000 yuan worth of goods that couldn't be returned, Jia was stuck. She reported to the police and learned she had fallen for a WeChat business scam.
So, what they sell is never products like face masks; they sell a dream—a dream of overturning poverty and getting rich overnight.
At that time, WeChat business relied on developing downlines to make money, similar to pyramid schemes, making the product irrelevant. Under such rules and profit models, 99% of agents didn't make money; only those with downlines in the tens of thousands made money, and such people were few.
In April 2015, CCTV exposed that WeChat business face masks contained large amounts of fluorescent agents and hormones, some exceeding standards by 6000 times, turning them into toxic masks. After this, the image of WeChat business was completely tarnished. Qiaoshisui lost 80% of its sales overnight and had to exit WeChat business, transitioning to physical stores.
From 2013 to 2015, brands like HANSHU and Qiaoshisui went from success to failure within two years, proving that single-category WeChat business rises fast and falls fast, with a lifecycle of only two years. Moreover, WeChat business, based on trust, once it collapses, has no chance of restarting.
02 Industrialized WeChat Business Assembly Line
From 2015 to 2017, industrialized WeChat business assembly lines represented by Yunji, Dalinjia, and Global Catcher rose rapidly.
Those wanting to become store owners only needed to pay a little over 300 yuan to open a store on the platform. The platform provided a large supply of goods. Agents didn't need to stock up or handle shipping; they only needed to promote in Moments and WeChat groups to earn commissions.
For example, Yunji Weidian is a WeChat business platform providing beauty, maternal and child, and health food products.
In the early Yunji model, users only needed to pay an annual "platform service fee" of 398 yuan to open a store. After opening, they could earn income through self-purchase discounts and sharing with friends. A store owner who invited 100 newcomers (including those recruited by newcomers) could become a "mentor." After the team reached 1,000 people, they could be promoted to "partner."
Store owners didn't get commissions for recruiting newcomers, but they could earn 5%-40% commission on each product sold, with most products offering around 20% commission. After becoming a mentor, for each newcomer recruited by team members, the mentor earned 150 yuan; partners earned 70 yuan. Mentors and partners also received 15% of team sales profits.
Driven by profit, agents were willing to actively promote and bring in more people. Moreover, Yunji provided unified copy and images in groups for store owners to post, updated in real-time, so they could copy and paste without changing a word.
With this low-threshold, low-investment, low-risk model, Yunji quickly attracted a large number of users, and many early WeChat business practitioners switched to Yunji.
In June 2017, Yunji publicly claimed annual sales grew from 580 million to 3.54 billion yuan, a growth rate of 506%, with monthly sales exceeding 700 million yuan. The industry called Yunji "China's largest regular army of WeChat business."
But this model still resembled a pyramid scheme, relying on developing downlines to make money, with product sales earning little. Yunji had four founding store owners with downlines in the hundreds of thousands.
Pyramid schemes violate the law. Legal criteria for identifying pyramid schemes typically include: "more than 30 people and more than three levels," and "directly or indirectly using the number of people developed as the basis for compensation or rebates."
Therefore, in July 2017, Yunji Weidian was fined 9.58 million yuan by the Hangzhou Binjiang Market Supervision Administration for suspected pyramid scheme activities; in early August, its official account was permanently banned by WeChat. Subsequently, Yunji underwent a four-month rectification and restructured its team system.
After rectification, Yunji limited team levels to within three levels; beyond three levels, the interest relationship was automatically terminated, just staying within the legal limit.
Newcomers no longer paid a "platform service fee" but purchased a "registration gift package." The team hierarchy was changed to store owner-supervisor-manager. Store owners still didn't get commissions for recruiting newcomers but received 40 Yun coins, and the invitee received 20 Yun coins, with 1 Yun coin equivalent to 1 yuan, usable on the platform. Supervisors earned 150 yuan, and managers earned 80 yuan, termed "training fees." Similarly, supervisors and managers received 15% of product sales profits, termed "service fees." Supervisors and managers signed labor contracts with Yunji, and their previous month's earnings were paid on the 15th of each month. Thus, rebates for developing downlines became company employee compensation, avoiding legal risks.
Let's look at Global Catcher.
Global Catcher has three levels: member, service provider, and excellent service provider. New users who purchase designated products worth 399 yuan on Global Catcher can activate "Catcher Membership" and become "Global Catcher store owners."
After becoming a member, they can get an average 15% rebate on self-purchases and 5%-25% commission on shared product sales. For each subordinate invited, they earn 100 yuan, and they also get 25% of the income generated by direct subordinates' self-purchases or shared sales.
When a member's subordinate members' total consumption reaches 10,000 yuan or they develop 25 people, the member can apply to become a "service provider," with direct recruitment income rising to 200 yuan and indirect recruitment income to 100 yuan; when subordinate members' total consumption reaches 300,000 yuan or they develop 750 people, they can apply to become an "excellent service provider," with direct recruitment income rising to 250 yuan and indirect to 150 yuan.
But for WeChat business, making money still relies not on selling goods but on developing downlines.
Data shows that on Global Catcher, the income structure of WeChat business practitioners is highly similar, with "head-hunting" income accounting for 70-80% of total income.
In 2018, Yunji completed its restructuring, officially announcing over 3 million registered store owners, of whom 90% primarily self-purchased. Such data officially declared that it was no longer a WeChat business entrepreneurship platform but a group-buying retail platform for small and medium brands.
Now, their slogans are mostly like: "Self-purchase saves money, sharing makes money." This means that major platforms including Yunji, Dalinjia, Global Catcher, and Beidian are gradually practicing the positioning of membership-based online shopping platforms.
03 Why Does Xiaomi Do WeChat Business?
If it weren't for the "Xiaomi Youpin Promoter Platform," it would be almost impossible to associate Xiaomi with WeChat business.
At the end of 2018, Xiaomi launched the "Xiaomi Youpin Promoter Platform," reportedly designated as Xiaomi's 13th product line, at the same level as Xiaomi phones, directly overseen by Lei Jun, with an investment of 200 million yuan, showing its importance.
From official materials, Xiaomi's designed model is exactly the same as Yunji and Global Catcher.
New users who purchase designated products worth 396 yuan on the Youpin Promoter App can become members for one year. As members, they receive a membership gift package, can claim up to 100 yuan in coupons monthly, and 30 yuan in shipping coupons, similar to JD.com membership. They can earn rebates on self-purchases or purchases shared with others, with a maximum ratio of 30%.
Online, there are rumors about the Youpin Promoter WeChat business system: if you recruit 200 people, you can sign a second-level distribution contract at Xiaomi headquarters; 1,000 people, sign a third-level distribution contract. After joining the distribution team, you can apply for membership gift packages, obtain officially approved special-price product coupons, and 30-yuan no-threshold coupons. For example, the original price of 899 yuan for a Xiaomi watch can be reduced by 500 yuan with special offers.
Additionally, there is a promotion and commission system for an agent signed with Xiaomi. From this table, the rules are very clear: ordinary VIPs earn 100 yuan commission for directly developing one downline. After promotion to promotion consultant, directly developing one VIP downline earns 150 yuan; later, when that VIP's commission reaches 20 yuan, the upline earns 20 yuan; when the VIP's commission reaches 60 yuan, the upline earns 40 yuan. Indirectly developing a VIP downline also earns 50 yuan.
And the platform immediately generates a profit of 198 yuan in membership fees plus product sales profit for each VIP acquired, meaning the platform is willing to subsidize agents.
Therefore, it can be predicted that agents joining Youpin Promoter still make money by developing downlines, and the platform is willing to subsidize agents to expand users. But once the user base reaches a certain scale, subsidies will decrease, making it harder for agents to earn from developing downlines, and they may mainly rely on shopping rebates.
Xiaomi's purpose in doing WeChat business is to acquire customers through WeChat business methodology. But what's worth pondering is that, so far, the products on the Youpin Promoter platform are mainly third-party, with few Xiaomi self-operated products; Xiaomi laptops, Mijia internet air conditioners, and other self-operated products are not available. This reminds people that platforms like Yunji and Global Catcher also mostly feature products from small and medium brands.
04 The Essence of WeChat Business
I. WeChat Business Is a Social-Relationship-Based Fission Distribution
In the traditional internet era, consumers spent time on blogs and forums, making these sites valuable. But websites lacked monetization methods. After Baidu Union was launched, websites could earn advertising revenue by integrating Baidu ads. Countless websites became connection points under Baidu's system. Baidu became a Chinese internet giant, thanks to these websites.
In the mobile internet era, social platforms rose, and each individual, like websites before, had followers and influence. If these individual points were connected to distribute products through social relationships, it would surely generate huge profits. WeChat business platforms do exactly this.
For individuals, the entry barrier has also lowered. Previously, to earn money through Baidu Union's ad revenue, you needed a website, which was a high barrier. In the WeChat business model, the barrier is almost zero.
In fact, social-relationship-based distribution is not limited to WeChat business; there are also group buying, knowledge payment course fission, master-apprentice models, etc., and each has significant influence.
For example, group buying.
Take an example: an item priced at 60 yuan can be bought for 29 yuan through group buying, but you need to invite two friends to join the group order. This results in three orders, increasing platform sales. We often see group buying links shared in WeChat groups.
In the WeChat ecosystem, Pinduoduo, which started with group buying, stands out. Founded in 2015, Pinduoduo achieved monthly turnover of 40 billion yuan and over 300 million users in less than three years, then listed on NASDAQ.
Another form is knowledge payment course fission, where sharing posters to Moments and WeChat groups via exclusive links earns the sharer a percentage of sales, and they also get a share of income from downlines' recruits. This is third-level distribution, very similar to WeChat business. However, fission is usually short-term, "shoot and run," not a sustained campaign.
Xin Shixiang once conducted a course fission that attracted nearly 100,000 registrations within 5 hours, with sales of about 4 million yuan. It triggered WeChat's official red line in just 4 hours, and the link was blocked. This shows the immense power of using social relationships for fission.
And there's Qutoutiao's master-apprentice model.
In Qutoutiao's early model, each user who invited someone to register earned 8 yuan in cash, paid in 12 installments. The newcomer became an apprentice, and the inviter became the master. Each time the apprentice read a news item, the master received a "tribute." To earn more rewards, masters had to continuously invite, send verification codes to invite more apprentices, and keep apprentices active, ensuring they read content regularly to receive full rewards.
Additionally, users earned coin rewards for check-ins, quizzes, reading, etc., which could be exchanged for cash, driving user engagement.
Although Qutoutiao's content quality is poor, where there is traffic, there is profit. With this model, Qutoutiao achieved explosive revenue growth. In March 2019, Qutoutiao's financial report showed Q4 2018 revenue of 1.33 billion yuan, up 426.1% year-over-year. Full-year 2018 revenue was 3.02 billion yuan, up 484.5% year-over-year.
These are all businesses built on social relationships.
II. Advantages of WeChat Business Fission Distribution
1. Low Customer Acquisition Cost
With internet new user growth nearing saturation, customer acquisition costs are rising and difficulty increasing. This is industry consensus, and WeChat business might be a new way out.
Social traffic generated through WeChat group fission and Moments sharing is still at a price low point. Qutoutiao's master-apprentice distribution model costs less than 7 yuan per external acquisition, and about 5-6 yuan for internal acquisition through reward fission.
New products need advertising for customer acquisition, whether through low-price subsidies, Baidu keyword bidding, app store promotion, or celebrity endorsements—all are essentially buying traffic. WeChat business returns the cost directly to users, making them beneficiaries, and because users are willing to spread the word, it generates huge benefits.
A new brand using the WeChat business model can quickly open the market and save a lot of promotion costs.
2. Strong Penetration, Easy to Reach Consumers in Fourth- and Fifth-Tier Cities
Traditional channel advertising struggles to reach consumers in fourth- and fifth-tier cities. These consumers are not sensitive to ads but love "small bargains." Once there's an opportunity to get free money, it spreads like wildfire.
WeChat, through this relationship, used red packets to spread across China quickly, connecting information and capital flows for young people and middle-aged and elderly in fourth-, fifth-, and sixth-tier towns. WeChat Pay thus became a product that could compete with Alipay.
The logic of WeChat business is similar: through profit incentives and family/friend relationships, WeChat business can quickly penetrate products into fourth- and fifth-tier cities.
Recently, Pinduoduo's latest financial report showed that as of the end of 2018, Pinduoduo had 418.5 million active buyers, surpassing JD.com's 305 million annual active users. Pinduoduo achieved this in just three years, largely by tapping into fourth- and fifth-tier city consumers.
III. If You Want to Do WeChat Business, What Should You Pay Attention To?
1. The Platform Can Provide Good Products
WeChat business has passed its initial chaotic period. Earning by developing downlines is unlikely now because everyone knows the tricks, and few are willing to join. But selling real products still has opportunities. If you can recommend good products to friends, they will naturally buy again and again, which is the long-term way to make money.
2. Provide Training
If you don't know how to do WeChat business, how can you stand out among competitors? If the platform provides training, it can help you quickly master WeChat business operations and earn money sooner.
3. Ideally Provide a Complete Content Production System
Like platforms such as Yunji and Global Catcher, if copy and images are uniformly provided, it saves a lot of time thinking about copy, allowing you to focus on selling.
4. Manage Your Expectations
WeChat business veterans categorize newcomers into three types: one type doesn't want to post in Moments, doesn't want to sell, fears being blocked, fears being discovered by bosses; veterans guide these people to become self-use consumers. The second type has spare time, like stay-at-home moms, and are guided to open stores to earn pocket money; 75% of Yunji's store owners are stay-at-home moms. The third type is career-oriented with strong work ability, and are encouraged to build teams and recruit more downlines.
So, which type are you?
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