Traditional e-commerce builds platform awareness through brands’ own traffic, committing huge advertisements and infrastructure construction, ultimately establishing user trust. Social e-commerce providers recharge their trust through social currency, which means that product recommendations from WeChat friends naturally have a social trust foundation.
So long as the recommended products are good enough and highly fit, a virtuous circle will form. The conversion rate can be several times higher than that of ordinary e-commerce according to iResearch data. Social e-commerce providers build a business based on trust which could be ruined by excessive consumption of trust.
When the product quality and basic services have problems, this social trust will be easily destroyed, and one can forget about re-purchase. That is a great loss to users’ natural social connections, and it is easy to form vicious word-of-mouth communication in one’s community.
The foundation of the social trust chain reaction is high-quality goods and basic services. Therefore, self-operated e-commerce providers such as JD and Vipshop that have been deeply embedded in the supply chain, have great advantages in making trust recommendations in social scenarios.
Vipshop has also made a strategy of breaking the market with high-quality products this year. These e-commerce providers that solidly engage in retailing have a natural ground for trial.
The decision-making threshold is lowered
A large number of medium and large e-commerce platforms is almost everywhere on the Internet, users become sensitive and difficult to choose in this extremely commercial environment. Recommendation accommodates users’ consumer psychology of having difficulties in choosing.
If the product is exactly what the users want, and the price is appropriate, many people will place the order. After all, it is a waste of time for many consumers to compare prices and read reviews.
In addition, the basis of social trust is also a kind of natural after-sales assurance. For users, the recommendation from friends is screening, and this kind of social trust is a way to lower the decision threshold.
Pindduo’s CEO, Huang Zheng once presented a point of view: recommendations among people, relationships between people and similarities of interests should be utilized to group people by category and to gather the individual needs of each person into planned needs with a certain degree of flexibility in time.
The recommendation has this attribute naturally. No matter in the distribution or group purchase scenario, it is easy to form a large scale effect in the short term and create a best-seller by choosing a popular product to distribute through nodes in the WeChat ecosystem.