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The V Store app connects suppliers and "microshop" owners. More than 100,000 people signed up in the first 10 days. Photo: Simon Song

In age of e-commerce behemoths, microshops find their niche

Faced with a sea of retailers on big sites like Taobao, consumers are turning to small stores hosted on WeChat, often run by friends

Celine Sun

Call it personal shopping by proxy. Every few hours Beijing housewife Verna Zhang gets an alert on her mobile phone telling her about the latest "must have" consumer item - a South Korean face mask and Japanese toothpaste one day, fresh strawberries and home-made duck dishes the next.

The sales pitches aren't coming from any e-commerce giant, but rather "microshops" her friends run over the WeChat messaging app.

Zhang says she prefers to buy through these more intimate channels than browse the online shopping malls hosted on the websites of the mainland's internet giants because it saves time.

"This is a better place to shop than Taobao," the 32-year-old says, referring to the country's largest e-commerce platform, which is controlled by Alibaba. "If my friends recommend something to me, I feel that they have tried it and felt really good about it. I do not need to spend a lot of time searching and comparing online."

Individuals and small merchants are turning to WeChat and Weibo to set up small retail businesses, tapping into the social media platform's 500 million-plus accounts for potential customers. Larger companies have taken notice and are beginning to follow suit. "Microshops are the next big opportunity in the e-commerce sector in China," said Jayson Chi, a partner with the McKinsey consulting firm's Hong Kong office.

For smaller companies, the growth has been phenomenal. Zhi Hong began selling tea five years ago through Tmall.com a spin-off of Taobao. But profits proved elusive because she needed to spend heavily on advertising to get buyers to click to her site.
So she established stores on smaller shopping sites like JD.com and VIP.com The number of customers jumped but after a few years of rapid growth, new business began to drop off. She needed new areas to grow and turned to social media. Through her company, Xiamen Charenling E-commercial, Zhi recruited 100 microshop owners to help her promote her tea. By year-end, she hopes to grow the team to about 5,000.

"Compared to Taobao, it's much easier to operate a microshop with a smartphone," Zhi said. "Basically, all you need is to share your own experience of using the products with your friends. It's relying more on word-of-mouth than on advertising."

In February, entrepreneur Sun Taoyong launched V Store, an app that connects suppliers with individual microshop owners. In the first 10 days, the number of subscribers topped 100,000. Sun said most were women who hoped to sell skincare products and family-orientated goods, and earn the 10-15 per cent commission.

"Now the major challenge is on the side of suppliers. We'd like to introduce as many brands as we can in a short period; but we need to ensure the quality of products sold by individual shop owners as all their business is established on trust with buyers," he said.

"In any event we believe the era for everybody to do business online is no longer far away."

This article appeared in the South China Morning Post print edition as: 'Microshops' tap niche in crowded market
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