Chinese women are killing it in WeChat commerce

Wu Xiaoyu 吴晓雨 opened her first online store in 2009 before WeChat existed. She was working full time as a digital strategy analyst for a marketing firm in the city of Zhengzhou, in Henan Province, but she had a project she couldn’t stop thinking about. She wanted to sell local products like honey and walnuts from her hometown in a mountainous region of Henan, since the children and elders still living there were not equipped to market for themselves. So after work, she started posting ads on online message boards and building a customer base. After two years, Wu quit her job in order to both officially register her company and give birth to her daughter.

Today, Wu owns two WeChat stores (Youjian Haitao 有间海淘 and Guozhen Liaode 果真了得), employs just under 40 people, and takes orders from about 600,000 customers. Generating around 2.8 million yuan ($407,000) in sales per month, she is one of a growing number of women who are reshaping the gender balance of Chinese entrepreneurship through ecommerce.

Female dominance of China’s ecommerce space is revealed by the numbers: While women account for only 25 percent of all entrepreneurs in China, they have founded 55 percent of new online businesses, according to state-media-cited research from 2015. Women-owned businesses already account for over half of stores on Alibaba’s ecommerce platforms Taobao and Tmall. And women like Wu are running a growing number of female-owned WeChat stores.

Newer and smaller than Tmall, Taobao, and JD.com, and housed within Tencent’s messaging app-turned-ecommerce platform, WeChat stores opened for public business in 2014. Last year, almost a third of WeChat’s 768 million daily users made online purchases on WeChat stores, doubling the proportion of 2015 consumption, according to a McKinsey report. Unlike platforms built for ecommerce, the app’s selling platform functions as a social commerce system, where store and product information are shared within groups of followers or contacts, instead of through advertising or running product searches. This makes WeChat stores uniquely situated to be a gateway for aspiring entrepreneurs with limited capital.

“It’s not about how much power you have, or your knowledge or education or money. It’s about how creative what the merchant wants to provide to the customers is,” says Elvica Yu 俞韬, CFO of the WeChat-integrated ecommerce software provider Youzan 有赞. Yu says that unlike traditional ecommerce sellers who attract customers by spending on advertising and sponsored placement in search results, WeChat sellers develop their customer base through personal networks and creating shareable content. Similar to the Tencent-funded Weidian 微店, Youzan provides virtual storefront templates for WeChat business owners. Yu says that over 40 percent of the company’s nearly 3 million business owners, which include Wu Xiaoyu, are female. He expects this figure to hit 50 percent within the year.

Lily Shi 施爱丽, 30, started her WeChat store, Love Rabbit 兔子洞韩国饰品代购, using the personal networking strategy that Yu describes. Shi began selling accessories imported from Korea on WeChat in 2014, the same year that Tencent opened WeChat stores for the public. Shi decided not to open an “official account,” where businesses can send messages and promotions to subscribers. Instead, she engaged in more straightforward social commerce — simply posting photos on her personal WeChat account of jewelry and accessories received from her Korean supplier. Only her WeChat contacts were able to see these posts to her “Moments” newsfeed, but as friends shared her account, her circle of WeChat contacts has grown to 2,700. This group can click on her posts to access her Weidian store, all without leaving WeChat.

“I didn’t think too far ahead when I started. The intention was just to make some extra money doing what I like — I myself am a fan of these accessories,” says Shi, who has since quit her job at an international training firm to focus on her business full time. Today, she receives the majority of her orders through her Taobao store; she began renting a separate studio last summer after her operations outgrew her Shanghai apartment.

Shi laughs when she remembers thinking that this business would bring her more freedom. Instead, she’s learned that striving to build a successful company is more than a full-time job. “Wherever you are, whatever you are doing, you have to be reachable by your customers. And there’s not a clear line between your work and your personal life,” she says. But she likes having a career where she’s not passively receiving a paycheck. “If I don’t do anything, I don’t get any sales,” she says, clearly motivated by that thought.

This entrepreneurial freedom has advantages for working women. A recent survey by the recruitment website Zhaopin 招聘 found that 22 percent of Chinese women felt severely discriminated against while seeking employment, a figure that nearly doubled among high-level female college graduates. Gender disparity also surfaces at home: Although state population data indicates that both partners work in about half of married couples, women are nearly six times more likely to be unemployed than their husbands, often while raising children.

“I never thought about going back to work full time after my daughter was born,” says Zhang Wei 张薇, 42, who sells handmade skincare products on WeChat and Taobao. “I was hoping to do something that allowed me not only to make some money, but also to spend more time with my daughter, taking care of my family.”

Zhang, who opened her Taobao store, Weijia 薇家, in 2011, worked hard during her daughter’s early years — producing and expanding her product line, handling customer service, and building her Taobao following to nearly 30,000. She now makes roughly 200,000 yuan ($29,000) per month, and recently expanded to open a WeChat store due to increased customer demand. Zhang says that the organic flow of information on WeChat works well for her business. “Almost everyone I know is using my products now. Customers from Taobao become WeChat friends, and they, too, are quite happy to voluntarily promote me in other channels,” she says.

On WeChat, both official businesses and independent sellers rely on promotions from their friends and followers. The WeChat app has created an entirely different ecosystem, which shares few similarities with typical ecommerce platforms. Ecommerce giants like Amazon and eBay or Taobao and Tmall are all based on a searchable directory that will display products from different brands and merchants. But on WeChat, consumers must connect with or search for a seller, instead of searching for a product. Followers of WeChat’s 14 million official business accounts — ranging from 90 percent of the world’s luxury brands to small businesses and bloggers — can search by store name or click on the business’s posted content to get to their stores. Similarly, shoppers can arrive at the store of a private account seller after following a link shared by a friend on his or her “Moments” newsfeed.

“It harkens back to that era of Tupperware parties — that style of social selling of inviting people round to the house and having a party,” says Matthew Brennan, the China-based founder of WeChat consultancy China Channel, referring to a form of direct selling where brand representatives will host or be invited to social gatherings. “It’s pretty much the same concept of working with your social network and your friends, but on WeChat, it’s much faster and you’re doing it with a lot more people.”  

Zhen Li, an operations manager from Zhengzhou who studied WeChat as part of her master’s degree work at University of Auckland Business School, links this relationship to the operating principle of Chinese business — guanxi (关系 guānxi), which interweaves business with personal relationships. “Guanxi means, ‘I know you, and I’m willing to pay you something,’” says Li, breaking the complex term down to its rudiments. Li says she’s noticed this in her own WeChat consumption — for example, paying more for products from someone she knows, or being skeptical of sellers she does not. “I only shop at the WeChat store of people who I know, or if my friends have a purchase history with them,” she says.  

Yet advertising within a group of friends can limit scalability, and too much promotional activity through personal accounts is looked down upon, or even blocked, as WeChat’s owner, Tencent, aims to keep user experience as its top priority. Even for official accounts, there are restrictions on the already-limited advertising that exists on the platform, as well as on how many posts businesses can make from official accounts.

As more sellers crowd into WeChat and other ecommerce platforms, competition is  becoming more cutthroat. “The market is changing so fast, you have to stay open minded,” says Lily Shi of Love Rabbit. Though she knows the difficulties, Shi hopes to continue to grow her business to eventually start her own brand. She says, “For entrepreneurs, persistence is crucial to success. Don’t give up easily on your dreams.”