Amazon eagerly eyeing social commerce sector

US tech company Amazon is doubling down on the fast-growing social commerce sector by beefing up its presence in WeChat mini program, as China's Generation Z consumers－those born between the mid-1990s and the early 2010s－evince rising demand for personalized and niche overseas products via social media channels.

Social commerce, which refers to a person's entire shopping experience－from product discovery to checkout process－takes place on a social media platform and is gaining traction among Chinese consumers, industry experts said.

The company has launched a group-buying function within its WeChat mini program and strengthened cooperation with key opinion leaders as part of a broader push to expand its footprint in the social commerce segment, according to Amazon Global Store, which includes top destinations for Chinese customers' cross-border shopping, such as the United States, the United Kingdom, Japan and Germany.

"Young Chinese consumers, especially Gen Z, use their own independent thinking and judgment when choosing brands, and they prefer to pursue niche lifestyles and personalized products," said Li Yanchuan, head of Amazon China Global Store and Prime. For instance, virtual reality equipment, camping and skiing products have been increasingly favored by Chinese shoppers.

Li said the "stay-at-home economy" has activated more consumption scenarios and needs, and shopping for healthy quality-of-life products has become the new norm. "Beauty, personal care and clothing have been the most popular categories among consumers in cross-border online shopping."

Amazon Global Store launched its WeChat mini program in September 2019, which is especially designed to build a social commerce experience for Chinese consumers, and covers fields like livestreaming, social networks and content.

The number of its new WeChat mini program users grew by 140 percent year-on-year in the first quarter, Li said. Currently, younger shoppers have witnessed explosive growth in the company's WeChat mini program and are expected to spearhead the new generation of overseas shopping trends in the future.

The global social commerce industry is expected to grow three times as fast as traditional e-commerce to $1.2 trillion by 2025, said global consultancy Accenture. The growth is predicted to be driven primarily by Gen Z and millennial social media users, accounting for 62 percent of global social commerce spending by 2025.

Although orders from cross-border online shopping are still mainly from first-tier cities, residents living in lower-tier cities have displayed rapidly growing purchasing power, Li said, adding the company will further enrich cross-border shopping scenarios based on consumers who share similar interests and hobbies.

"With the expansion of domestic demand and advances in emerging retail technologies, China has introduced preferential policies, such as lowering import taxes and expanding the range of goods allowed to be imported," said Zhang Tianbing, head of Deloitte Asia-Pacific consumer products and retail industry. All of these have prompted a surge in cross-border e-commerce imports despite the COVID-19 pandemic, Zhang added.

China's cross-border e-commerce sector has been growing exponentially over the past few years as the country's middle and high-income shoppers demand increasingly diversified and personalized products and services. The Ministry of Commerce said total imports of consumer goods reached 1.73 trillion yuan ($249.3 billion) in 2021, up 9.9 percent year-on-year.