China’s social e-commerce sector to more than double to US$185 billion in sales by 2021

Social e-commerce has been growing exponentially in popularity among Chinese consumers for the past three years. Its GMV, or total volume of sales, is expected to keep growing at a fast pace to reach 1.3 trillion yuan (US$185 billion) this year and more than double to reach 2.86 trillion yuan in 2021, according to a report released by China Internet Watch (CIW).

The sector saw its sudden surge two years ago when GMV grew 255.8 per cent to reach 626.85 billion yuan, up from 176.20 billion yuan a year earlier.

The report covers major e-commerce platforms that combine social elements into their sales processes, such as Pinduoduo, Xiaohongshu, and video streaming apps such as iQiyi, among the biggest players. It does not specify whether and to what extent it also includes informal sales via social media in its GMV estimate.

Pinduoduo is an e-commerce platform combining social interactions and elements of social media. One of its main features is that it allows consumers to form groups or take part in existing ones, to purchase an item for a discounted price. This not only works as an incentive to lure friends to buy a budget-priced product but also encourages more social engagement among people, resulting in higher user traffic.

The app was founded in 2015 and has gained large popularity since. The end of 2017 saw a turning point when many performance indicators of this Shanghai-based start-up exceeded those of JD.com.