A Quick Chat About Micro-Commerce

Sayings：

I thought of this while chatting in the afternoon. I’m not sure if it’s right, but that’s how I see it.

The primary attribute of a WeChat businessman is social e-commerce.

I don’t know how others view it, but I’ve always thought WeChat businesses are the awakening product of social e-commerce. Of course, long before WeChat businesses became a craze, many people were already doing business on QQ spaces.

The essence of a WeChat business is leveraging your online social circle to do business, not through offline stores or even traditional online stores.

Actually, I tried doing WeChat business once—it was the fruit sold by my half-girlfriend. I just happened to post about it on my Moments, and two boxes were ordered. That was the biggest result, and after that, I never did it again.

The reason why...

What does social e-commerce consume?

First, social traffic.

Most people who don’t know how to operate just casually post on their Moments or QQ space. To most of their friends, this is just advertising—useless traffic information that wastes time and attention. Over time, people selectively block information from such individuals.

The number of friends is limited. If you can’t convert as much friend traffic as possible, you’ll constantly need to find new sources of traffic and make new sales to boost your profits.

Even Taobao and JD.com need to invest in ads to bring in more external traffic to increase their sales.

E-commerce will always be a business that consumes traffic.

Second, trust.

Behind every transaction lies trust—that’s undeniable. Regardless of whether you complete a sale, if you post ads on your Moments frequently, your credibility will decline in the eyes of your friends.

It’s a psychological factor; no matter how good your product is, your overall trustworthiness will drop.

That’s why platforms introduced review systems, good reviews, and bad reviews—to eliminate concerns, build trust, and encourage purchases.

So, in fact, the moment you start doing WeChat business, you’ve already defined yourself in the hearts of your contacts: Most of your friends are of no value to you; their worth lies in contributing to your profit (or perhaps only a few truly matter and won’t judge you for being a WeChat businessman; as for those group-buy砍价 requests, well, let’s just say a friend’s value might only extend to helping you slash prices a few times—after that, you’ll be too lazy to ask, and when you finally do, will they still help you?).

I remember seeing a quote before: “The affection between people is like currency; each use diminishes it.”

Posting ads on your Moments consumes both affection and trust.

Talking about business models from the perspective of WeChat businesses

Most business models are essentially one logic: converting traffic into sales.

Any business consumes traffic; Taobao consumes traffic—the larger the traffic, the more sales it brings, and JD.com is the same. These two largest e-commerce platforms in China still run ads to acquire more traffic. Physical stores aren’t any different; without enough foot traffic, no orders will be generated.

Back to WeChat businesses—the same principle applies. A fixed circle of Moments contacts has little value.

That’s why the term “social e-commerce” arose, such as public accounts + e-commerce, influencers + e-commerce, etc. What’s the logic here?

Public accounts or influencers can bring fixed (stable) or greater amounts of traffic for monetization, rather than traditional online stores or physical shops, where today’s customers come and tomorrow they shop elsewhere (although physical stores are somewhat different; a fixed physical store at least captures the customer base within a few miles).

WeChat businesses suffer most from having too small a user base. Even with a low conversion rate, sales won’t go up, and if you choose low-frequency products, it’s even worse.

This logic is simple: Fixed traffic × Conversion rate = Revenue.

In this formula, although the conversion rate fluctuates, it changes within a reasonable range, so we can treat it as a fixed value. Thus, the variable we can adjust is traffic. Since public accounts and influencers can provide stable traffic, they can ensure returns. Apply this formula to WeChat business on your Moments: your friends number only in the hundreds, which is several orders of magnitude fewer than an influencer’s or a public account’s followers. Multiply by that conversion rate—how high can the revenue possibly be?

At this point, introduce product logic: Frequency × Unit price revenue = Overall revenue.

Frequency refers to how often products are purchased, and unit price revenue is the profit from selling one item.

Model this with two data points as a coordinate system.

Low frequency × Low unit price revenue = No gain.

Low frequency × High unit price revenue = Profit.

High frequency × Low unit price revenue = Profit.

High frequency × High unit price revenue = High profit.

This is the selection threshold. Choose well, and you make money; choose poorly, and all your efforts are in vain (we haven’t even considered the choice of consumer groups, but that’s okay—adding friends is something you can actively choose).

Weigh the pros and cons of doing WeChat business; as long as you’re happy, that’s what matters.

For most people, keeping your friends is enough, because friends will always bring profitable opportunities your way.

I want to show you how beautiful the rest of my life can be.

For many more people, your entire circle of acquaintances in a lifetime is still limited. It’s better to meet more people by doing WeChat business.