Yunji: Chinese Social E-Commerce

As any good marketer knows, the e-business world is ever-evolving. 

You need to keep a close eye on new trends and growing platforms, particularly if you want to get a hold (and keep your grip) on the Chinese market. 

Yunji is a rising channel in China, and it’s a platform that all international brands need to know about. 

But what actually is Yunji? Why is it different, and how can you use it in your Chinese marketing strategy? Our marketing experts have all the answers, right here. 

What is Yunji? 

Yunji is a membership, social e-commerce platform. 

Yunji sells an extensive range of product types, including fresh food to beauty, and tech to toys. It also sells goods from leading brands (both domestic and international), such as Dior, Gucci, Colgate, and Aptamil. 

Despite only having been founded in 2015, Yunji boasts a vast (and rapidly growing) network of users. From 2016 to 2017, Yunji achieved a 400% annual growth of its sales figures. 

This trend continued – so much so that at the end of 2019, Yunji had 13.8 million members, and its highest daily sales figures of that year were over 1.08 billion RMB. In 2019, Yunji became the first Chinese membership-based e-commerce firm to achieve a listing on a US stock exchange. 

Yunji Office

Forrester’s 2018 report valued Yunji at $1.1 trillion. Predictions estimate that the company’s value in 2022 will have risen to $1.8 trillion. 

As you can see, Yunji is experiencing a staggering boom, which doesn’t look set to stop anytime soon. 

How does Yunji work? 

Yunji is an online social commerce platform. 

With it, users pay a membership fee, which then gives them access to a wide range of products at a discounted ‘wholesale’ price.

The ‘social’ element of its business model comes from the fact that Yunji uses social media channels as a key driver for its sales and growing network. This is very similar to the model that other Chinese social e-commerce platforms like Pinduoduo use (more on this later). 

In addition to purchasing through the platform, users can also set up their own online selling platform. 

Plus, when Yunji users successfully invite more users to create an account, they are rewarded with virtual credit to spend on the platform. 

The process of setting up a Yunji account goes as follows: 

  • Sign up to Yunji and pay the membership fee 
  • Buy products through Yunji, with automatic access to the discounted price and special offers
  • Open your micro-store, and start selling 
  • Advertise your shop and products on social media 
  • When you get a sale, you will earn virtual credit to spend on Yunji

How is Yunji different from Pinduoduo? 

As you can see, the selling process is designed to be remarkably simple for users. A user’s main task is to promote their store, via social media. It is this strategy that is one of the key factors facilitating the platform’s rapid growth. 

The role of social media is an integral part of the user’s Yunji membership. The more they promote the platform, the better their savings will be. 

This model has been used by several apps, with one of Yunji’s main rivals being Pinduoduo. 

Pinduoduo is a leading Chinese social e-commerce platform

In fact, it is China’s largest online grocery shop. In addition to groceries and fresh produce, Pinduoduo also sells clothes, technology, and homeware. 

Although the two platforms operate on the same model of using offers through social media as an incentive to build their customer base, there are several key differences between the two: 

  • Pinduoduo is a much larger platform – its produce section alone generates $20 billion annually. 
  • Pinduoduo’s GMV was 20 times larger than that of Yunji (as of 2018). 
  • Pinduoduo’s model is far less profitable – in 2018, Pinduoduo lost 10 billion RMB. However, there is some complexity to this statistic. According to WalkTheChat, Pinduoduo invested heavily into growing its user base, whereas Yunji spent the vast majority of its costs on covering its fulfillment cost. Therefore, in some ways, Yunji could be considered to be the least profitable. 
  • Yunji has already had to pay hefty fines to the Chinese government, as it partially resembles a pyramid scheme (illegal in China). 

Understand the pros and cons of selling on Yunji and you’ll be able to use its features to your full advantage

At AdChina, we help Western businesses to successfully advertise in China. Our team of marketing specialists will guide you through the use of leading platforms, such as Yunji, and connect you to the best possible marketing strategy for your business. 

If you want to develop a more intuitive strategy to engage and develop your Chinese customer base, be sure to have a read of our blog – it’s home to a wealth of expert marketing guidance, made simple. 

Or, if you would like specific guidance, tailored to your particular business, don’t hesitate to get in touch with us. 

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0158 Oslo, Norway

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200234 Jing’an, Shanghai, China

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