Diane Wang is the founder, chairperson, and CEO of DHgate.
In 2016, the World Economic Forum published an article comparing widely used social networks’ number of monthly active users with the population sizes of countries. Facebook had more monthly active users than China’s population, Instagram had double the population of the United States, and Snapchat had more users than there are people in Indonesia.
In a list where social media platforms were interpreted as countries in 2021, China and India would be the only nation-states in the top ten to have physical borders. Facebook and WhatsApp would lead the list, each with a “population” exceeding 2 billion.
Users spend an immense amount of time on social media platforms. Data from London-based research firm Global Web Index shows that, on average, people spend 2 hours and 27 minutes per day using social media. These platforms offer a variety of services—users can read news, watch videos, connect with friends anywhere in the world, and even shop for a wide selection of products.
Micro-traders and social commerce
With social networks so entrenched in our lives, social commerce is gaining prominence. Influencers on social media are attempting to introduce a sense of trust and form unique connections with their audience. Some have opted to introduce e-commerce to the mix, enticing followers to buy products by offering detailed product presentations, often in the form of videos or livestreams—a drastic change from text and still images on a traditional e-commerce website.
Social commerce has greater potential for growth than existing e-commerce formats. Global consulting firm Accenture predicted in January 2022 that social commerce would grow three times faster than traditional e-commerce on a compound annual basis to reach USD 1.2 trillion in 2025.
User interactions are what make social networks special. They add new value to e-commerce. On social media, any user can buy a product and turn around to become a merchant for that same item.
Social commerce has leveled the playing field for companies, as well as individuals, around the world. Centralized platforms like Amazon and Taobao, once thought to be the “gatekeepers” of e-commerce, are now competing with—or recruiting—content creators.
In 2004, I established DHgate, a cross-border e-commerce company. I was excited about the potential to bring additional value to this space. After 18 years, that excitement persists, especially with the value that social media can bring to cross-border e-commerce. The fundamentals of retail commerce largely remain the same, but with today’s technology, anyone can become a “micro-seller” thanks to the growing social commerce sector, which I believe is set to grow exponentially over the next few years.
Content creators are essential to cross-border e-commerce
When we mention social e-commerce in a cross-border context, we usually refer to a situation where buyers and influencers are in one country, while sellers are in another. It’s fairly simple for influencers to promote products to local followers or viewers, but the challenge lies in the process of influencers leveraging their impact and building connections with overseas merchants or exporters, eventually reaping profits from social commerce.
One Facebook user, a personal friend of mine who has more than 40,000 followers, once told me that he gradually stopped sharing content on the platform. Social media took up too much of his time, resulting in a growing number of followers but no monetary benefits. He said it had never occurred to him that he could turn his social media platform into a business.
He is not alone. Around 4.6 billion people, or well more than half of the world’s population, are already on social networks, according to data aggregator DataReportal. Among them, only 50 million are influencers, while an even smaller group are making money from this line of work. According to a report released by Influencer Marketing Hub in March 2022, around 97.5% of YouTubers don’t make enough money to reach the US poverty line.
So, how and why do some content creators make money while others don’t?
Here’s a short story: DHgate launched MyyShop in 2020 and upgraded its functions in June 2022, positioning it as a one-stop social commerce software-as-a-service (SaaS) provider. MyyShop helps influencers connect with various Chinese suppliers and makes it easy to start a cross-border e-commerce business. The platform also offers various functions, including an e-learning platform that offers social commerce knowledge and skill building, and a comprehensive set of services such as logistics and payment method integrations, which are necessary for any e-commerce business.
So does MyyShop actually help content creators earn money? Here’s an example: a US-based cosmetics-focused content creator with 30,000 followers was introduced to MyyShop, gaining access to Chinese suppliers. She created a video for one product that was viewed nearly 40,000 times, while 8% of viewers made purchases. In addition, she gained 20% more followers after posting the video. She now has around 190,000 followers and earns nearly USD 10,000 every month from making product recommendation short videos. MyyShop not only gives her easy access to overseas suppliers but also helps her select products to promote and define audience engagement strategies based on the tool’s marketing analytics.
Straightforward SaaS tools like MyyShop are great assistants for any type of content creator to generate earnings from social e-commerce. By now, 1.66 million content creators worldwide have registered on MyyShop, boosting sales of more than 4 million products. I expect more than 1 million active content creators will use MyyShop and generate USD 3.8 billion in gross merchandise volume over the next three years.
In today’s globally connected world, I’m thrilled to see more and more micro, small, and medium-sized enterprises, self-employed individuals, and part-time workers join us in the social e-commerce revolution. Cross-border e-commerce has gone social, breaking down both cultural and language barriers, while providing a source of revenue for those who are able to adapt to the latest developments.