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Why China’s Biggest E-commerce Trend is “Mini”

In China, the future could be mini.

Mini programs are taking consumer smartphones by storm in the world’s second-largest economy. They exist as an app-within-an-app, typically inside mega-popular social applications like WeChat that already draw so much of a user’s time.

Just 10 MB or smaller, mini programs initially attracted mobile gaming developers and other entertainment-minded efforts, but today businesses and brands of all kinds have embraced the mini movement. In fact, in its Digital IQ Index: Luxury China, digital research firm Gartner L2 discovered that 17 percent of total WeChat users, amounting to 170 million, participate in the social platform’s 580,000 mini programs, which in addition to gaming enable e-commerce and offline activities as well.

Though mini programs are more limited in scope and functionality than a full-fledged app, some brands are finding them sufficient for their needs. Gartner L2’s data points to brands choosing minis over standalone applications, noting that no luxury fashion brands launched their own app from the year spanning April 2017 to April 2018, while just 3 percent of watch and jewelry brands did so.

On WeChat, mini programs began as a way to better link the ecosystem of consumers, influencers and content. As WeChat brand marketing consultancy WalktheChat explains, influencers typically use the equivalent of Facebook Page accounts to push out notifications to followers, though these notifications weren’t permitted to contain links—adding another step for shoppers interested in purchasing promoted products and thereby dampening conversion rates. Mini programs solve this problem by enabling articles blasted out by influencers’ Facebook Pages-like Subscription Accounts to link to mini programs, lifting conversion for those who make their livelihoods on these platforms and the brands associated with them.

Mini programs have been instrumental in fueling the rise of another major e-commerce startup in China that’s providing stiff competition to twin titans Alibaba and JD.com. In three years, Pinduoduo, backed by Tencent and founded by a former Google engineer, has attracted north of 100 million monthly active users and 1 million merchants, numbers that powered its $1 billion IPO on July 6. Unlike Alibaba and JD.com, however, Pinduoduo’s focus has been on consumers in the smaller Tier 3 and Tier 4 cities and beyond.

Its secret sauce: leveraging the power of social and organic word-of-mouth to get groups of friends and families talking about the deals on Pinduoduo—because buying en masse unlocks even better discounts. By letting consumers buy directly from manufacturers and skipping the middleman altogether, Pinduoduo offers prices often 20 percent lower than those at traditional retailers, according to a Bloomberg report.

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