social commerce in China

Podcast transcript #39: An ultimate way for businesses to master social commerce in China

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Find here the full  China paradigm episode 39. Learn more about Adrien Fabry’s story in social commerce in China and find all the details and additional links below.

Full transcript below:

MATTHIEU DAVID:  Hello everyone. I am Matthieu David, the founder of Daxue Consulting and this China marketing podcast, China Paradigm. Today I am with someone who I met 8 years ago when I had another business, a gift box business called ‘D’Elysee.’ He was starting his own business in online retail in China, selling wine online at a compelling price. I am today with Adrian Fabry, the general manager of Phoceis Asia, an agency of social commerce in China that has changed a lot in the past couple of years, in terms of positioning, the identity of the agency to focus on social commerce in China.

Previously, you had been a serial entrepreneur in China. You have started two businesses back and forth. You were also a finance guy as an M&A analyst. You have been working in the wine industry from late 1980s to 2016 and you started Z9H.cn to sell wine at discounted prices. You have run this online retail in China for almost 5 years. You changed online retailer in China several times, used different tools for brand strategies in China. When you began, WeChat was unknown in 2016 and it wasn’t the major social platform in China for getting in touch with people. So you have seen the social platforms in China evolving with your own business. Now you have a quite lot of clients yourself. You acquire clients online using YouTube, WeChat marketing and social CRM and now you are working for large companies, if you would like to name some, from France, Canada, the US and everywhere in the world. Thank you very much for being with us. I am very excited to have you on the show. You have been on my list for a long time so thank you for being here.

ADRIEN FABRY:  Thank you, Matt. No problem.

MATTHIEU DAVID:  So the first question, what is the size of your agency for social commerce in China currently? You can give different views. It can be revenues, the number of people, the number of cases, the number of clients in a year in Shanghai and the world.     

ADRIEN FABRY:  So, now Phoceis Aisa targets to maybe ten million RMB of revenues this year and we have 25 people and soon the team will have 25-30 people at the end of the year.    

MATTHIEU DAVID:  Do you include the marketing budget in the 10 million?     

ADRIEN FABRY:  Yes. So, there is a lot of media buying for our clients that are included in this number.

MATTHIEU DAVID: How many clients have you served so far?  

ADRIEN FABRY:  For retainer-based clients, we have around 15. Project-based and retainer-based clients together will be less than 30.

MATTHIEU DAVID:  Does it mean that you are one of the exclusive agencies of these online retailers in China? Sometimes you are working more on specific campaigns and for some of them, maybe you are the exclusive agency. How do you work with your clients? 

ADRIEN FABRY:  Each agency on social commerce in China provide two kinds of services. One is more retainer based and it’s about social media strategies in China linking up to your social platforms in China, while another one is company based, so in this case, it is more about projects. Whether it’s marketing or technical depends on the clients. Some of the clients we have are only retainers and for some of them, we are only project-based. For some of them, we are doing everything. It depends on their structure and it is actually quite interesting to see that the marketing departments of brands have their different ways of working with a lot of different agencies for social commerce in China. Some of them only use social media parts or even their own social media strategies in China, so we have to be flexible on that.

MATTHIEU DAVID:  At which minimum budget do you think it is possible to work on the retainer or to work on social commerce in China? Can you give some metrics on the minimum budget to spend to be active online in China?

ADRIEN FABRY:  I answer that question a lot, not only for entrepreneurs, even for big brands, because they don’t always have a huge marketing budget for China especially when they are starting and not sure of the ride that they can get, but I would say between $60-100,000 for a year. I think it’s the minimum budget. WeChat marketing is very demanding for social media strategies in China, especially in terms of content creation. It is extremely resource-consuming, so you need to have this minimum as a market entry in China.

MATTHIEU DAVID:  Could you tell us more about the position that you have and your emphasis on social commerce in China?

ADRIEN FABRY:  Before, it was an agency of technical development of application in China. When they started this business in China, most of the revenues were coming from those parts.

MATTHIEU DAVID:  Native apps means that apps made for IOS, Android and not the web apps that you open through your browser, right? It is not a web app, which is embarked within the icon of the app. It was native using the code from IOS and the code from Android and is that what you were doing mainly?

ADRIEN FABRY:  Yes. Actually, today I can even say any kind of application we build outside of WeChat marketing is called a native app. It is for the IOS. WeChat marketing was the first activity in China because people are spending so much time on WeChat, it’s smart to build the application insider the system. We started to launch the service in 2017 and saw that we could add a service of social commerce in China linked to this technic because once you build a mini-program or an application, it will also help the clients get the traffic so we also started the service of WeChat marketing.

MATTHIEU DAVID:  You are mentioning H5, a mini-program to a WeChat. The switch has been to build on mainly WeChat marketing. Is it correct?

ADRIEN FABRY:  Back in 2016, yes. But now social commerce in China can be also through most any kind of social platforms in China.

MATTHIEU DAVID:  So when you say any kind of social platforms in China, does it mean that now you see that social commerce in China is working with integration of Weibo? Does it also work with Xiaohongshu, another tool for social commerce in China? Are there any cases you have in mind where you leverage within your position, which is social commerce in China besides WeChat marketing?

ADRIEN FABRY:  Weibo now has a very obvious link to TMall. WeChat marketing has obvious links to JD. You can also upgrade the traffic to TMall on Tik Tok, so everything is integrated. The idea of how to bring my social commerce in China to the last step of conversion is assessed.

Today, for all the applications, there is a way. That’s why social commerce in China is now more and easier compared to a few years ago because back in 2016, WeChat was actually the main social platform in China. In 2016, we decided to shift the business model of the agency to an agency on social commerce in China. We developed our own technical team building mini-programs for WeChat marketing to help the brands get more online retailers in China form these investments or assets and bring more traffic. Actually, this WeChat marketing service this year is 65% of our revenues, even 70% maybe. It’s getting bigger, so the IT technical part is a little bit shrinking because we have a lot of demand for WeChat marketing.

MATTHIEU DAVID:  When you build a new program or H5 on WeChat, are you using existing frameworks or you have to build from scratch and create your own framework? On the west side, people go on Shopify to order and sell. There are more and more people using Shopify, WordPress, or WooCommerce. The frameworks are existing and quite powerful, even for someone who is not technical. What about WeChat marketing in China?

ADRIEN FABRY:  It is actually one of the reasons why our technical service part is getting lower and lower in our revenue breakdown. We have a lot of products available to rent and frameworks that we can customize.

This is something I would advise to all the online retailers in China now that instead of building your own mini program as social commerce in China and starting from zero, you can also rent a platform, so you can have a lot of different frameworks. A lot of them in China are very good deals and actually really good in terms of user experience and also international ones. So it depends also on the client needs.

MATTHIEU DAVID:  Would you mind mentioning some of them, the most advanced one you have now?

ADRIEN FABRY:  There is one very famous in China and it’s called Youzan. It is providing a lot of services inside of WeChat for social commerce in China. They have mini-programs and also HTMX-sided applications. You have also some other authors from agencies for social commerce in China or from the service providers, who can give you a service like that, like 31Ten Agency based in Shanghai. They are also providing this service for social commerce in China, so we can work with them for some projects. We can also work with Youzan and a lot of different offers.

MATTHIEU DAVID:  In your presentation, you talk about social commerce in China, paid social and also chatbot of WeChat marketing. Is it something your clients are really using or is it just the urgency and the use is not mainstream? What about chatbox? A lot of people talk about it, but I feel that I haven’t seen many, to be honest.

ADRIEN FABRY:  It depends on how it is being used. It depends on the client needs and how they use WeChat marketing. For instance, we have a travel platform client, Agoda, and they have a huge WeChat Official Account with more than half a million followers.

Because this account is used as the main customer service tool for them. If the users or the clients of this brand has a problem, instead of calling or sending an e-mail, they use WeChat. Because the customer service is being processed through WeChat. In this case, the chatbot is super useful because it is helping online retailers in China filter all the demands. This is an example where WeChat marketing really works. We have other projects where WeChat marketing is probably not the focus for the social media strategies in China or not used as a tool for customer service that much. In this case, I would not recommend having a chatbot because it is too heavy in the technical requirements and the development of traffic and inquiries.

MATTHIEU DAVID:  There is a lot of talk about the chatbot, but a chatbot is AI and it is not that smart. In fact, it gives very precise questions most of the time and it’s not like a pure artificial intelligence. Could you tell us how you configure this chatbot? Are there existing frameworks? What do you suggest to use chatbots for? Do you have other parameters and can you share about the frameworks more in detail about how to use chatbots for social commerce in China?

ADRIEN FABRY:  You have two kinds of chatbots. There are some of the chatbots that are not involving AI. For these chatbots, it is automatic autoreply function and this one is quite simple. I would advise using this one at the beginning if your WeChat marketing doesn’t have too many inquiries or followers. But you have also some chatbots involving AI. It’s like Siri-style chatbots, where you can ask a question and it can answer the question, even if there was not a configuration from the beginning because there is an AI behind.

This one can be used when you have a big account with a lot of followers and inquiries. But in the beginning, you can set some automatic or auto-replies. It actually is a lot of work. If there are 100-1000 questions to handle in an auto-reply or if the account is used really as a customer service function, maybe having an AI behind can be smarter.  

MATTHIEU DAVID:  What do you mean by configuring the answer to the questions? How do you work with the chatbot? You configure the answer to the questions or do you have already existing frameworks in China for Chinese clients?

ADRIEN FABRY:  For this automatic reply function, it is actually provided by WeChat marketing. This one is quite easy to deal with. There is a function in the official account of the brand to interact with online retailers in China. When you are talking to online retailers in China through this function, you have either a real person talking to you, which is also possible, a chatbot or both. If there is an AI function, you need to work with developers to implement it and then it is another story. An AI motor is actually providing the answer and getting the inquiries. 

MATTHIEU DAVID:  Do you feel they are reliable?

ADRIEN FABRY:  Yes. Honestly, if you have a super complex auto-reply function where you handle all the questions and you have actually already imagined all the thousands of possibilities of questions that can be answered, maybe you don’t need an AI. But if you don’t want to spend that much time in this part, you can work with an AI, but in this case, there is a lot of time to be lost. It depends on how to use social media strategies in China so they can work. 

MATTHIEU DAVID:  Is it something you always parameter when you create WeChat marketing for an  online retailer in China or when you start working on social commerce in China, do you always configure automatic answers?

ADRIEN FABRY:  It is very specific to online retail in China. If we start a new account for a brand and we know that there will not be a lot of inquiries in the beginning, we don’t need that because it’s an extra cost for the brand. It depends on the cases.

MATTHIEU DAVID:  Are you seeing all the social platforms in China to make sure you are leveraging all of them now? In one of the cases you sent to me, you say “We choose the right social platforms in China for you.” From your perspective now, does it mean that the ecosystem of social platforms in China is a bit more fragmented? Before in 2016, it was only WeChat and now we have more.

ADRIEN FABRY:  I would not say fragmented because if “fragmented” means “excluded,” but it is just that you have more social media strategies in China to reach the connection with the client. Depending on the online retailers in China and depending on what they are selling, we know the audience of every social platform in China and then, in this case, we can give advice. For instance, now we have more and more beauty online retailers in China coming to us. A lot of their potential clients are from Xiaohongshu, because if the audience of Xiaohongshu is mostly women between 25-35 years old in China. We advise them to go and invest in this platform because they have all their potential clients there, while Weibo or Douyin has a younger audience, so maybe they are for another project. It depends on the industries and their products and the price.

MATTHIEU DAVID:  Historically speaking, the first social platform in China was Weibo and they invested in live streaming and connection with Taobao and TMall. What do you see as a leveraged form Weibo now? Is live streaming still something hot now for social commerce in China or it is passed now? 

ADRIEN FABRY:  No. Every social platform in China has a profile of audience and users, so the idea is how we can bring these users to the final step of social media strategies in China, the sales. If there is a chance to bring these followers in the social platform in China where they can become clients, then we can use it. Live streaming is just one of the ways, but there can be also hosting or video. It doesn’t necessarily have to be a live stream. If it works, then we do it. For Weibo and for some of our online retailers in China, if we try to bring the followers to a sale, it doesn’t work and then we don’t do it. For some of our brands, it works out well and then we continue to invest.

Basically, imagine that for every social platform in China and mostly WeChat, Weibo, TikTok, Xiaohongshu, for these four social platforms in China, the social media strategies in China are the same. First, acquiring followers. Second, making sure they are qualified leads. Try to express the brand strategy in China, communicate with followers, understand and trying to explain with them why this online retail in China is different and why there is a real added value. The third step is to sell them the product. The fourth step is to sell them again to make sure that they become loyal clients. So, whatever social platform in China, it is the same, because for online retailers in China, providing content is for free and it’s not a good deal unless you can leverage investments by getting clients from this social platform in China. That is what we are doing and there are ways to do social commerce in China and depending on the brand, it can be more or less efficient. 

MATTHIEU DAVID:  How would you qualify Weibo now? How would you position Weibo?

ADRIEN FABRY:  In terms of the potential of ROI, financially speaking, I would place it in the sure position. I would say that it depends on the industry, but generally speaking, probably first WeChat, second Xiaohongshu, third Weibo and fourth Douyin, but this is very much general ranking. When we talk more about specific industries, then the ranking is evolving, for instance, for beauty, I would put Xiaohongshu first and then second WeChat, so it depends on the social platform in China and what you do. 

MATTHIEU DAVID:  The problem with Xiaohongshu is that it is often social commerce in China and a social platform in China as well, but you don’t mention of TMall, one of the biggest social platforms in China. Why don’t you mention it?

ADRIEN FABRY:  Because TMall is not a social platform in China. It is a market place. TMall and JD are market places. We are experts of social commerce in China through outside channels. Generally, for an online retailers in China, when you make your social media strategies in China, you have in the channel and out the channel. In channel is investments in market places, so e-commerce or market places, TMall partnering with TicTok. Then you have out channels, investments in channels that bring you more coverage and traffic.

We are the specialists of the out channel, a very different social media strategy in China. Generally, you have agencies specialized in in-channel, who are direct conversion experts, because most of the people are coming into the marketplace to buy stuff. For them, the challenge is how to make sure my products will be displayed and create the deal. While for agencies of social commerce in China like us, we are out channels experts and more indirect conversion experts. It is a very different social media strategy in China because we are not talking to people who want to buy products. We are talking to an audience who don’t want to buy the products. They don’t want to be bothered, so we need to find a very smart social media strategy in China to create the demand in a different way. That’s actually what we are doing here.

MATTHIEU DAVID:  I interviewed someone from Parklu a few weeks ago and that is the last part you have not mentioned about social commerce in China, which is influencers and KOL. Xiaohongshu has been developing a lot on KOL. It has been actually flowing over the KOL starting in Hong Kong to sell products from overseas. You mentioned Xiaohongshu and WeChat doing art tools for influences and KOL. What is your takeaway of social media strategies in China to work with KOL? We know it is expensive, but it can be effective. Could you give us some parameters on how to work with KOL for social commerce in China from your experience?

ADRIEN FABRY:  It depends on the industries. From our experience, it is a better performance with KOLs depending on the industries. Generally speaking, if I just talk about follower acquisition cost, it is not the most effective way for us. We have a lower cost of acquisition with an advertisement channel. In Weibo, we have ways with a tool called Fensitong and then WeChat has Tencent advertising. Our costs of acquisitions are lower on these channels rather than with KOL, but what has to be analyzed is also the quality of those followers. It is true that we have probably more qualified followers from KOL. The followers that we most likely convert into clients are, again depending on industries, are probably more from the KOL. It’s complex to analyze, but I would say that when you build a brand strategy in China, you have to identify all your channels of acquisition as well. KOL is one of them, but you have other ones. You can be very creative. You can do an offline event; you can do advertising. 

MATTHIEU DAVID:  You mentioned social commerce in China and I feel like that is something that you may actually leverage more for your clients. Could you tell us more about the minimum budget to use paid advertising on Tencent on WeChat marketing?  Do you have a minimum budget to activate an account? Because I remember a few years ago you had to invest minimum 500,000.

ADRIEN FABRY:  This is not the case anymore. Actually, this has been updated. I am going to need to check with my team, but you need to have a minimum spending per day.

MATTHIEU DAVID:  What are we talking about, 1000, 10,000?

ADRIEN FABRY:  It has been changed recently and I think we are talking between 1-3000 per day.

MATTHIEU DAVID:  Is it affordable?

ADRIEN FABRY:  Yes I see now it is affordable. Now it’s possible to do advertising in all the social platforms in China even with a minimum budget. It was not the case a few years ago, but now it is the case.

MATTHIEU DAVID:  So how precise can you target that?

ADRIEN FABRY:  Never enough.

MATTHIEU DAVID:  Compared to Facebook, it is very good at targeting so precisely. You could target people from other companies, competitors, following competitors, like competitors. I felt for a long time that Tencent and WeChat marketing especially was behind, way behind. What’s your status now? Would you target genders or types of cities? What were the parameters? 

ADRIEN FABRY:  I am not sure we can say behind or advanced, because it is just it’s not part of the priority of WeChat marketing to give too many information of their consumers and users to other people. That is not part of their business model, while Facebook is clearly a priority for them is to be as precise as possible in the targeted marketing. It is just that they don’t believe in that and they think they have to protect their users. Every time I met people from WeChat and Tencent, their priority is how to protect our users from all the possible advertising and annoying contacts with online retailers. I think it is on purpose. Compared to Facebook, we can target the cities, genders, interests and actually even outside of China. If we have a department store as a client, we are activating all the tourists when they are in France.

MATTHIEU DAVID:  You can try to target Chinese travelers. When they are overseas you can target, but not when they are leaving overseas?

ADRIEN FABRY:  Yes exactly. It is enough. The results we get the cost of acquisition of the followers and customers and the current level of profiles from the advertisement are fine. I think it’s on purpose because they want to be open.

MATTHIEU DAVID:  Could you share some metrics on the CPM of WeChat?

ADRIEN FABRY:  I only care about the cost of acquisition of followers and the final metric. For the CPM, it is more handled by my team. So, I don’t have enough data to share. The first step and final step at some point are to sign off the acquisition.

MATTHIEU DAVID:  You mentioned the current acquisition of 20 RMB for one of your clients, less than 20ish RMB. Could you mention the parameters to take into account in the cost of acquisition and what you think for followers and not necessarily for clients? What is low cost? What is the high cost and parameters to consider?

ADRIEN FABRY: It depends on the quality of the follower you get. If it’s a follower who will turn into a client and place a lot of orders, maybe you don’t mind to spend 100 RMB. It depends on many things. It depends on what you’re selling, sort of margin you make, and how likely the followers will buy again your product. Is 20 RMB a good deal or not? I think it depends on the industries or what you are selling. If you are selling chocolate, maybe not, if you are a fashion brand and you are selling expensive dresses or shoes, maybe it’s a very good deal. It’s very complex to judge the cost of acquisition if it’s a good or bad cost because it also depends on the behavior of the follower after. I would say that you need to find a range that you think is reasonable, according to your cost of acquisition of clients, your margin, your cost of orders. If you want your client to spend a certain amount per order and at least place 5 orders or 10 orders in a year, maybe you can afford to pay a little bit more.

MATTHIEU DAVID:  You said that you focus on the cost per acquisition and less on the CPM because it is more linked to the performance of social commerce in China. Does it mean that when you design social media strategies in China, you had a positioning on your CPC? How do you initiate a creative campaign for social commerce in China? There is a critique path where you can go anywhere in every direction and there’s the rational one almost in terms of business. Do you use these metrics or do you have assumptions for when you start a campaign for social commerce in China on the cost of acquisition? 

ADRIEN FABRY:  This is driving all of our social media strategies in China, so we only care about that. We only care about the cost of acquisition. Everything we do is based on that. That is why when we work with KOL or advertising, for instance when we make the decision whether to work with KOL or not or with this social platform in China or not, is the cost of acquisition in the end. If we think it’s too expensive then we don’t go. The way we make a decision is, “This social platform in China, according to our experience, the cost of acquisition is high.” Then we don’t do it and then it depends also on the client and what they are looking for. If that is a point they really want to target the volume rather than the value or they want to target the value and try to comfortably faster. So we listen to the client needs and depending on what they are looking for, we see how the investment in social platform in China can fit in their social media strategies in China, so this is the way we do it and the cost of acquisition is the most important metric.

social commerce in China

MATTHIEU DAVID:  Let’s mention the shoemaker you work with, Carmina. You are saying that you have been able to get this cost of acquisition of 20 RMB in this case and that you have been able to get 3000 followers. Could you tell us what you did in order to have this low acquisition of followers, because 20 RMB for a luxury shoemaker is very low to acquire 3000 followers a week?

ADRIEN FABRY:  It’s very low and it’s a very nice campaign for social commerce in China. I think it’s one of our most successful campaigns for social commerce in China because we haven’t invested a lot of money in social platforms in China and we got a lot of clients from these online retailers in China. I think it’s quite specific because it is a niche brand. It’s premium to luxury shoemaker in Europe that is not in China yet, so there is a natural demand form the Chinese shoe market where the shoe lovers and shoe experts want to get these products, but it is not really easy for them to get the product on the website from Europe. We targeted KOL and worked with KOL for this project. We identified the ones that really had their audience and followers as shoe lovers. We found these KOLs and we worked with them to make sure that in our campaigns of social commerce in China, we would attract all the shoe lovers into this social platform in China. Actually, for an online retailer in China like that, 2000 or 3000 followers are not a lot. If they are old clients, it is fine. They are very happy. They don’t mind. They prefer to have an account of 3000 followers and 350 of them are the clients rather than an account with 50 000 followers and only 100 of them are their clients.

Very niche, very qualified, well targeted, extremely high conversion. This one is a good example of what we do for social commerce in China. For this one actually, it was also a requirement form this online retailer in China that they are super self-oriented and it was a test for them to take a decision if they would go to China or not. We did campaigns of social commerce in China and we recruited shoe lovers in their social platforms in China. Every time we post an article we can see that the page view, the ratio, the readership rate is really higher than other online retailers in China, because most of them are super interested and every time we push a promotion we can immediately see there is a peak of traffic from China and we have a look at it and then we can see we have a lot of orders that we actually generate from WeChat marketing. This is a very pure case study of social commerce in China and it is very interesting to analyze.  

MATTHIEU DAVID:  So they didn’t have any person in China for the websites. You go through the URL and buy it online from their website and not using your social platforms in China and not using your marketplace. You created WeChat marketing for them and you sold this WeChat account, but how did you create WeChat marketing if they are not in China because most of the time the WeChat shop and the WeChat account needs to be linked to a company?

ADRIEN FABRY:  Now you can create overseas accounts.

MATTHIEU DAVID:  It is very new.

ADRIEN FABRY:  It is very new. So, they are actually now creating an overseas account. Lots of companies to open these accounts first. Now we are transferring all the followers from the local companies to the social platforms in China, but I think this is another subject. What is important about this case is that it is interesting. They came to me and they say, “We have every month 1-2 orders from China on our website in Europe. We don’t do anything. We don’t communicate. We don’t advertise. We didn’t know that Chinese followers know us.” Actually, they were very strong about that and asked me what we can do.

I said we can try to create WeChat marketing as a test, recruit some shoe lovers and we will see when we have social media strategies in China if there are more orders than usual on your website. If it is working well, it means you can leverage something. We tried, we succeeded. Now they decided to come to China so they are opening their business and they are going to open stores in China. It was for them a good test. For the size of this company, investing 100,000 Euros for a year to try social commerce in China and see if there is a natural attraction from the followers towards the products. This is something that they were willing to do as a test and it worked so. Now they are coming. It is interesting.

MATTHIEU DAVID:  Could you share about the conversion rate? We know about the cost of acquisition 20 RMB. What do we talk about the conversion rate, 10%, 5%?

ADRIEN FABRY:  I think the conversion rate during promotion periods from the traffic in China in metrics can be a little bit more than 5%, so it is super high for online retailers in China. Older people are following their social platforms in China. They are interested. They understand the product and when there is a deal they will just go and buy, because this is an opportunity they don’t want to miss. 

MATTHIEU DAVID:  The 20 NMB you calculated, is it the media buying, paid social or is it the total cost of the campaign as a denominator of the ratio?

ADRIEN FABRY:  It’s the media buying. We have a budget and we invest it on different social platforms in China. Depending on the number of followers, we calculate the cost of acquisitions.

MATTHIEU DAVID: I saw in the cases you mentioned very different tools for social commerce in China including augmented reality and gaming. Could you give us feedback on those new tools for social commerce in China? My intuition is that those tools are mostly used offline to be meticulous with the people offline in the booth. Could you share a bit of your experience with those people?

ADRIEN FABRY:  The strategy for social commerce in China is first, we recruit the followers and second, we engage them; third, we convert them. It’s just part of the second step that you have to measure the quality of your portfolio of followers by giving them an opportunity for engagement and game is one of them. An article, a game, a questionnaire, many, many creative ways of engaging your followers and game is just one of them. Once you have a game, you can use it to get more attraction to the followers, because if it’s a very creative game, it can generate virility. Then you can also naturally recruit followers from these social media strategies in China. It’s one of the ways to bring the audience to the final step of social media strategies in China. 

MATTHIEU DAVID:  I feel it’s much more in game. It is much more sophisticated to what you did with DS Automobiles, the automaker on its booth. It seems that it is much more than this. Do you feel that it worked to build all this?

ADRIEN FABRY:  We don’t know how it could have happened if we had done it differently. Some of them worked very well and we don’t know. we have no idea if it could have been better with another tool of social commerce in China. So I would say that it depends on some expectation of the clients. If some of our clients sometimes want something innovative, because it is part of their KPI to bring to the market something new. I am a businessman. I am very concrete, so I always tell my clients, “If you make the social media strategies in China too complicated, it is going to be difficult to bring all of these people to sales.”

Because if there are ten steps before you can buy the product, a game or an identity game or anything, you will not have a lot of sales. So some of our clients also want to communicate and they want to show to their audience and the market that they are an innovative company. They know that they will not get the best performance, but they still want to be the one to do it because it is part of their brand strategy in China. Then we have some clients when we meet them they say, “I only care about the conversion.” Then we don’t do games. We just do one page. It depends on their objectives.  

MATTHIEU DAVID:  It can be part of the brand strategy in China, which is much more longer term. I feel there are so many agencies in the market, supporting international online retailers in China to go inside the Chinese market. How do you feel about the competition? How do you differentiate? Is it about social commerce in China because in order to stand out in the competition, to be identified clearly?

ADRIEN FABRY:  It’s a good way to talk to the experience of entrepreneurship in China. I was on the other side before working with agencies. I know exactly what my client wants because I have been in their position and if they really have a concern about their performance. I know how I can help them. When I was an entrepreneur in China and working with agencies, I never had an agency that really cared about my concerns, objectives, metrics, but they were more caring about what they were selling. The approach we have is very different. It’s that we listen to the client and we try to understand what they have to achieve for the year or next 6 months. Then we see if we can help them or not. That’s actually I think a big difference. That’s why we are an agency for social commerce in China because I think a social media agency doesn’t mean anything. Doing social media for social media is useless. It is only burning the money for online retailers. It doesn’t bring anything.

We consider social media strategies in China only as the first step. The second step is how we can make money from this investment in social platforms in China, because every marketing director, every CEO, CFO, they want to make money on anything. So they want to invest in this social platform in China. We care about that so that’s actually the difference. It’s a big step, of course, and it is actually very challenging for my team because they are not used to that. They are coming from other agencies where the number of followers is the final target. Here, we don’t care about this. It is the metric that is redeeming the performance of the agency. The sales are number one, the number of clients we required, the money you can make form this investment in social platforms in China is the most important thing and I think that is the difference.

MATTHIEU DAVID:  Your differentiation is on the way you think about a campaign for social commerce in China, which is much more oriented than purely branding or purely running social platforms in China.

ADRIEN FABRY:  If you have WeChat marketing, sometimes I talk with my clients and say, “Why do you have this social platform in China? Why do you invest in WeChat marketing?” The answer is because everyone is doing it. It is not a good answer. This is not the way to work with WeChat marketing.

The answer has to be because we want to make money from this social platform in China. It’s difficult and challenging, but it is possible so this is what I am training my team every day, my managers, my social media specialists, and even my copyrighters. I make my copyrights self-oriented. I explain to them that when they are writing, posting or creating content, they have to understand that at some pointthe final target is to sell. This is actually the strong difference is that we care about what the client at the end wants. I never had an agency for social media strategies in China really that involved in my online retail in China when I was an entrepreneur in China. I try to do that now that I am on the other side.  

MATTHIEU DAVID:  I want to talk about the Z9H.cn. You were doing with imported wines and you have your own website as far as I remember. You had your WeChat marketing and could you share a few metrics on how many shares you had, what was the min-max per day of clients, a few metrics of what it is to sell from scratch in the wine industry online between 2012 and 2016? 

ADRIEN FABRY:  Actually, it was lucky for me that it was during the spur of it because it was a very dynamic period. There was a lot of augmentation in the digital industry and I am going to give you a figure that is going to summarize everything. When we started the business in 2012, WeChat was more like WhatsApp today and TMall just started to be a strong market place. JD was called the 360buy.com and they were selling keyboards and computers so it was very early and at that time a good decision was to build our own stand-alone website. 

MATTHIEU DAVID:  You mean it was a good decision retrospectively or it was a good decision because everyone was doing that?

ADRIEN FABRY:   It was a good decision at that time to take into account the current environment. When I met my plan for my online retail business, at that time I planned to have most of my sales coming from my website. I couldn’t imagine that I would sell in another social platform in China and in 2016, just before we stopped the business, half of my revenues were from WeChat marketing. It means that my website, which I invested money in to create it, develop it and maintain, was not actually the highest revenue source anymore.

It was WeChat marketing and actually, you don’t really need to invest a lot of money to get a website and stuff. Between 2012 and 2016, we realized month by month that the most effective social platforms in China of sales for us was through the WeChat marketing and that’s how I became a specialist of social commerce in China. It was not that I wanted it. It was just that I had no choice. As an entrepreneur in China, it was my best social platform in China to sell the product. The cost of acquisition of WeChat marketing was way lower than the website and especially my cost acquisition of followers.

MATTHIEU DAVID:  How did you acquire clients with the website?

ADRIEN FABRY:  We had at that time some Baidu investments. All the search engines were one of the ways and then we also had offline events trying to get clients to form offline and convert them to online later. WeChat marketing was also a very strong tool for social commerce in China so we were pushing a lot of content, videos, and articles to entertain the audience and try to insert in their mind that we were the coolest place to buy wine in China. At the end, most of my clients were placing their order form WeChat marketing. That cost of the order was very low from WeChat marketing. It was very interesting to analyze that and when I was doing it and I started to do social media strategies in China.

I only realized after a few months that I was doing social commerce in China. It is when you are an entrepreneur in China, trying to find how you can sell your product. You have this pressure of the stock to sell and it has to go faster. You are just making decisions based on the data and I just realized that with WeChat marketing, it was super effective, so I said, “Okay let’s just put all our efforts in this social platform in China.” At the end, it was one of our strongest social platform in China. That’s how I have become an expert of social commerce in China and that’s why actually also Phoceis is now an agency for social commerce in China. It is from this experience. 

MATTHIEU DAVID:  Most of your competitors at that time selling wine online disappeared. Meanwhile in the west, one of the flash sales in France or others are still existing as far as I know. Why is it so difficult to create a flash sale website in China and actually the Groupon websites also have disappeared except maybe Meituan and why is it so difficult? How do you analyze the fact that most of the players have disappeared? 

ADRIEN FABRY:  Very simple. A lot of consumers in Europe, when they go back home they open a bottle of wine and they just have a glass, just because wine is part of their culture in those countries. In China, it is not the case. When you are building a model for online retail in China based on the final consumer drinking at home, if you don’t have these people or you don’t have enough, then you cannot build an online retail business. When I started in 2012 this retail business in China, I knew that it was not the case, but I thought it would come fast. That was my mistake, but actually, you don’t have that many Chinese consumers that are drinking wine for pleasure at home. It doesn’t exist. It’s not a lot. If it is, it is not as frequent as in France or Europe, so that’s why a company like you mentioned is still alive despite the fact that the beginning was not profitable.

For many years it was not profitable, because they got attacked by investors. Actually, today I don’t have their financial data, but they could survive because they have a solid base of users that are actually regularly drinking wine. Wine here, you don’t have this base. When you are selling wine online to consumers in China, you need to be very patient and I was not that patient. That’s basically the story. A lot other of my competitors at that time so for me, were companies selling wine to Chinese consumers because my brand was especially for targeting Chinese consumers. We were not targeting the expats and that is why our brand is not actually famous. My competitors are also selling wine to Chinese people and most of them are gone or they merged with other companies doing also offline business and they are part of a bigger project, but not pure online players. Because it is very difficult to generate a lot of orders form social commerce in China only if you are selling wine in China.

MATTHIEU DAVID:  How do you analyze the conception of wine then? Is it mainly for socializing? Is it mainly through restaurants and hotels? How do you analyze the market in China?

ADRIEN FABRY:  It’s for a special occasion, hotels or entrée businesses, bistros. If it’s finally for the final consumers, the conception is not actually as strong as it could be in European countries or American countries because wine is not part of their culture so it’s normal actually. It’s difficult to analyses and then you have to be careful when you see some figures and data, but I can tell you it’s like that. Even actually when the wine is being consumed you are not even sure it is being consumed. I have been to a lot of weddings in China because I have a Chinese family here. Every time I like to check what is left in the bottle of every table during the Chines wedding, and you can see that most of the bottles are still full. So, they open the wine, they pour a bit, but they don’t drink that much. They drink more of their Baijiu, and it’s not a beverage that is actually today an important beverage for them. It will be, but it is going to take a lot of time. It is difficult to leverage an investment today in this industry for our online players.

MATTHIEU DAVID:  Thank you very much again for your time. It’s already 1 hour; I think even more. So thank you for sharing. Congratulations on your journey. I see that your new role you are still an entrepreneur because you are repositioning the company in China and what we call an entrepreneur; I think it could work well with the way you are managing. Thank you very much for listening to us and I hope you all enjoyed the talk. 


China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

Do not hesitate to reach out our project managers at dx@daxue-consulting.com to get all answers to your questions

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