63 Private domains

Private domains

Messaging platforms are becoming the next battleground for brands and loyalty.

Chat commerce (ccommerce, c-commerce or cCommerce) is sprouting on messaging platforms. It is also known as private domain commerce, to differentiate it from the public domain of brand websites or marketplaces such as TMall or Amazon.

In China, WeChat—which has 1.2 billion monthly users—has been especially successful in building relationships with luxury brands through livestreaming and private messaging. Consumers spend an annual average of RMB 170,000 ($26,550) via WeChat, according to a 2020 report by Boston Consulting Group and Tencent Marketing Insight.

Guangzhou-based direct-to-consumer color cosmetics brand Perfect Diary combines savvy cultural partnerships and a premium look with low prices. It is present everywhere its target gen Z audience plays, from the social media and ecommerce platform Xiaohongshu (or Little Red Book) to short-video platform Bilibili to Douyin (as TikTok is known in China).

Perfect Diary also invites consumers who buy on marketplaces to join its official WeChat account or that of its virtual influencer Xiao Wanzi. This recruits followers in groups of several thousand to offer them sneak peeks of launches, and plays the role of a personal shopping assistant.

“Not only does Xiao Wanzi let you preview new products and deals, but you get inspiration from the conversations of the entire chat group,” says Joyce Ling, chief strategy officer of Wunderman Thompson China. “Even though it appears a little ‘fake’ and like a show, it is literally a condensed version of the consumer journey from awareness to purchase to loyalty.”

Chat commerce is expanding beyond China. Vietnam and Thailand lead the world in using Facebook’s chat functions for online retail, measured by the volume of messages between merchants and customers, as reported in Nikkei Asia in June 2021. In Thailand, global brands including Burberry, Louis Vuitton and Chanel have launched official accounts on messaging app Line, engaging consumers with custom stickers, livestreamed fashion shows and digital ads. Line Shopping, the commerce arm of the chat platform, boasts over seven million users in Thailand alone, Lertad Supadhiloke, head of e-commerce at Line Thailand, told the Bangkok Post in July 2021.

Why it’s interesting As people increasingly converse on WeChat, WhatsApp and Line, brands are also jumping on these chat platforms to build smaller but more intimate, personalized relationships with groups of consumers.

Brands are jumping on these chat platforms to build smaller but more intimate, personalized relationships with groups of consumers.