To her hundreds of customers, Wang Yuanyuan is more of a friend than a salesperson. The entrepreneur runs Korean-style womenswear stores in four major Chinese cities, but on WeChat, she’s online around the clock, ready with gossip about popular TV shows, Covid-19 news, fashion trends, even advice on the best camping spots. When someone complains about a bad day, Wang is immediately there with comforting advice. On International Women’s Day, she sends them all virtual red packets containing small cash rewards.
Her friendly rapport has paid off in orders placed by the thousands. Wang told Rest of World that the chat groups, which she runs with her colleagues, bring in more revenue than their four physical retail stores combined.
“You have to know women,” she said. “They want to look good. They want to get more with less money. They also want to feel that you really love them.”
Wang is among the thousands of entrepreneurs in China using WeChat to capitalize on a marketing trend that has taken the country’s e-commerce industry by storm: private traffic. Traditional open e-commerce marketplaces like Taobao and Tmall are impersonal and dull, avid salespeople and business owners suggest, keeping brands removed from a true connection with shoppers. Brands use private traffic to turn occasional shoppers into dedicated consumers by interacting with them in the same way they might text family and friends.
“Private traffic binds customers to a brand,” said Christian Schuster, founder and head of SEO at China-focused marketing agency Tenba Group. “It makes a shopper into a real follower and a loyal fan.”
But the intimacy is a veneer — enabled by a suite of technologies that help companies collect data on consumers, automate interactions with them, and, in some cases, create altogether synthetic influencers. The resources available span all price points: free scripts that program bots to automate interactions in the WeChat group, instructional clips on growing an audience on Xiaohongshu, and books available on Taobao about key concepts like “maintaining personal charm through WeChat interactions.”
The obvious presence of bots in the groups hasn’t seemed to put shoppers off: social commerce firm Azoya predicts that sales via private traffic will top 3 trillion yuan ($454 billion) this year. And funding has poured into companies that help brands facilitate private traffic, like SaaS provider Youzan, influencer networks like Big Goose Culture, and e-commerce agencies like Baozun. In 2021, China’s private traffic industry received investment topping $125 million — up 185% from the year before, according to Daxue Consulting in Beijing.
No one is a better private traffic draw than Austin Li, also known as “Lipstick Brother,” who expertly marries the strategy with another tool geared at the Chinese market: livestreaming. Li reportedly runs at least 500 WeChat groups, each of which max out at 500 members. Legend has it that shoppers are rendered incapable of leaving one of Li’s livestreaming events empty-handed. He once famously sold $1.7 billion worth of beauty products in just 12 hours.
In a private WeChat group joined by Rest of World reporters, Li’s assistants remind customers of daily livestreams and post tantalizing pictures of products on sale, from croissants to sanitary pads to, of course, lipstick. They answer group members’ questions about upcoming promotions, while addressing them as “MM,” slang for “pretty girls.”
Through intimate, constant communication on WeChat, sellers are making themselves a part of the buyers’ everyday lives, convincing them that they’re working tirelessly to provide the best deals. It’s hard work to comprehensively understand what catches a potential shopper’s interest and makes them stick around enough to buy, says Laura Deng, senior activation manager at e-commerce agency Tong Global. “Brands have to build a closed ecosystem, attracting people’s attention, to nurture the connection and convince them to purchase,” said Deng, who helps brands build their private traffic business.
The brands don’t just get better sales numbers out of this work — they learn more about their customers. Deng’s firm, Tong Global, helps brands use private traffic to gather data on their customers’ interests and habits. With one client, she said, she uses a customer relationship management software, Tanma, to help them sort members of their private groups into potential customers, existing customers, and loyal customers. “We can categorize them by their interests, by their demographics,” Deng told Rest of World. Deng helps clients use another tool, called Drip, to do things like create unique games exclusively available to their private WeChat groups.
Viral direct-to-consumer beauty brand Perfect Diary created its own virtual influencer, Xiao Wanzi, as the face of the brand’s persona: she is made to appear to run the brand’s private WeChat groups just like Austin Li in his beauty groups. High-end global brands like Christian Dior and L’Oréal have followed suit — L’Oréal’s virtual brand persona is a 24-year-old Chinese-French man who cares about the environment and goes by “Mr. Ou.”
Other shopping and social apps, including Taobao, Xiaohongshu, Douyin, and Meituan, have also introduced group chat functions, but social media managers told Rest of World that WeChat is, so far, the most effective platform because people use it all the time.
McDonald’s China also runs WeChat groups for every branch location, where consumers enter coupon lotteries by guessing the name of a sandwich from a picture. Messages containing the term “KFC” trigger warnings about “non-McDonald’s information.” An employee at a McDonald’s branch in Shanghai, who requested anonymity because they were not authorized to speak to the media, said store managers had to compete with each other over how many customers they have recruited, and those who failed to meet targets got reprimanded.
It’s not just lipstick and burgers. Nana, who requested anonymity because she was not authorized to speak to the media, used to run WeChat groups for one of China’s most popular English learning apps. The company invited parents into the groups by offering them a trial course and spent the next week trying to convince them to pay.
From her office in Shanghai, Nana greeted the parents every morning with motivational lines like “The best time to plant a tree was 20 years ago. The second best time is now.” During the day, she invited them to post videos of their children and play English vocabulary games to earn coupons. Then, in the second half of the week, she would start promoting the paid course. In the groups, fellow salespeople would pretend to be interested consumers. “What if my children can’t keep up with it?” they would ask –– a way to address the doubts of the hesitant but silent parents, Nana said. At the end of the week, 15% of the group members would sign up for the paid course.
The cost to maintain these groups is high, thanks to the labor required to run a 500-member chat. While big companies often use chatbots, bots don’t offer the same personal touches as individual sellers that are key to pleasing consumers. For example, beauty customers don’t want to just passively receive promotions but to watch product tests and unboxing videos, to understand whether a product is right for them — and this is harder than just basic group management, according to Shuyi Han, an analyst at Daxue Consulting. “Feeling disturbed by too much junk and useless information is the main reason they’d leave later,” said Han.
In her groups, Wang strikes a careful balance: she engages but avoids spamming, in case people press mute on the group. She remembers the VIPs’ sizes. She asks about someone’s wellbeing when they sound raspy in voice messages. “I need to treat them like customers but also friends,” she said.