Dangdang to Launch Pinterest-ish Service
This is getting more interesting. After all the Pinterest fever and numerous clones, Dangdang, the online bookstore turned online hypermarket is reportedly planning its own Pintererstish service to tap into the pinboard fever, the latest in a wave after big names like Taobao, Renren and Tencent as well as innumerable startups shot more or less similar products.
Hu Yi, head of Dangdang mobile internet business disclosed that the company is considering launching a Pinterest-like social ecommerce tool to complement its main territory. Taobao released WOW with a touch of Pinterest idea last year to compete with Meilishuo and Mogujie, both are the post child of successful Chinese social ecommerce service.
In the States, Pinterest is now the leading social ecommerce service and just make it to the Top Five social referrer (Facebook, StumbleUpon, Google, Twitter, Pinterest) with an extremely fervent user base. The service drives more referral traffic than Google+, LinkedIn and YouTube combined (see chart 1).
chart 1: Top Social Referrers
While in China, Xu Yirong, serial entrepreneur and founder of Meilishuo once revealed in December last year in a public speech that the social sharing service had a PV of over 30 million and contributed a monthly transaction volume of RMB 700 million (US$ 111 billion) to Taobao. As for Mogujie, the arch rival of Meilishuo, it fosters a monthly sales of over RMB 120 million (US$ 19 million) for Taobao with more than 3 million registered users and 1.2 million daily UV. The Hangzhou-based company’s staff are generally entitled to around 25 months of salaries last year.
Biz Model Nearest to the Money
The referral characteristics rooted in the nature of Pinterest and other social ecommerce services made it “business model nearest to the money”, as attested by the stunning Meilishuo/Mogujie story and the huge traffic to retailers generated by Pinterest, which is the fastest growing site in history, ever.
The brightest side about social ecommerce is, it’s leveraging on an existing market rather than creating a new one. In such case, Meilishuo and Mogujie are making money from Day 1 as long as they foster transactions.
Globally, the social ecommerce market is expected to explode from US$ 9 billion to 30 billion in 2012 – 2015, according to Booz & Company, a global management consulting firm.
Both Turning ‘Like’ to ‘Buy’, But a Bit Differentiation
Simply put, people ‘like’ items shared by other users on Pinterest or Meilishuo, while some of the ‘likes’ translate directly into ‘buying’ behaviour, that’s how social ecommerce works.
However, though bearing the same concept and approach, one differentiation between Pinterest and its Chinese apprentices is: the participation of retailers and brands.
In the States, tons of SEO tips/social marketing tricks have been written up after people realising the value of Pinterest in social ecommerce. Retailers like Walmart or brands like Starbucks had long explored leveraging social service for commercial gain. While in China, most of the referral links go to individual vendors on Taobao rather than towards brands or retailers.
In a nutshell, basically even with a plethora of social ecommerce services emerging upon the market, local retailers and brands still haven’t fully appreciated the potential of services like Meilishuo or Mogujie.
Being exposed in those platforms is good for brand-recognition and customer awareness. However, brands might haven’t realised that according to the market funnel theory (pictured below), ringing “awareness” among customers is a far cry from enough. At least for now, ‘awareness’ seems to have limited value in actually spurring social ecommerce while social ecommerce will almost certainly have the biggest impact at the lower end of the funnel, in the consid- eration, conversion, and loyalty and service stages, according to Booz $ Co.’s report.
Market Funnel, Photo Credit: booz&co.
Renren and Weibo are good for publicity, but not so much with regard to directly fostering purchases. That’s what Pinterests are specializing in.
In encouraging the adoption among brands and retailers, Chinese Pinterests still have a long road to explore.
On the other hand, as of now Meilishuo and Mogujie heavily rely on Taobao while more than 80% of their revenue comes from Taobao affiliate program. They need to diversify their revenue sources as much as possible.