May 9 (NBD) -- Social e-commerce, with social platforms like WeChat as its basis, is in full swing at present and is viewed as the development direction of the e-commerce industry. 

The booming sector has rapidly drawn a large influx of money. 

In April, Chinese social e-commerce platform Pinduoduo.com completed a new financing round of about 3 billion U.S. dollars led by tech titan Tencent. Yunji Weidian also raised 120 million U.S. dollars in a Series B financing round. Moreover, another popular platform Youzan completed its back-door listing in Hong Kong. 

Prior to these deals, a sales and distribution platform as well as a high-end online shopping platform secured investments, respectively. 

Behind their successful financing is the fact that famous companies and institutions like Tencent, Sequoia Capital, and Kuaishou are attempting to jump on the bandwagon. 

In fact, industry insiders at first had doubts about the social e-commerce model on the grounds that social networking is helpful to generate traffic leads but couldn't create an e-commerce model. Beyond their expectations, social e-commerce took off and grew into a promising business. 

According to the white paper on China's social e-commerce and consumption upgrading in 2018 released by a third-party research institute, China will have up to 24 million social e-commerce merchants by 2020, and the niche market will top 1 trillion yuan (156.9 billion U.S. dollars) at that time. 

This means while e-commerce titans like Taobao and JD.com remain in good shape, new giants are expected to emerge thanks to the traffic dividends brought by social platforms.

E-commerce analyst Li Chengdong told NBD that from Pinduoduo's business performance, it could be forecast that a single social e-commerce platform will be able to compete with Taobao in terms of size in future. 

Statistics from mobile big data provider Jiguang shows that Pinduoduo's penetration rate in Chinese internet users reached 22.4 percent in March, beating JD.com to take the second spot and delivering a month-over-month growth rate of 15.6 percent. 

Undoubtedly, social e-commerce apps are reshaping the landscape of the e-commerce market and changing the shopping habits of consumers in a new way. It is also predictable that the competition in the nascent sector will be fierce.

When asked about the user traffic of social e-commerce, Youzan founder Bai Ya said to NBD that to the social e-commerce model, the traffic is unlimited, but to social e-commerce platforms, the traffic is limited. If someday user traffic on WeChat is not great enough but demand of merchants on Douyin or We-See shows a notable increase, Youzan will turn to serve merchants on those platforms, Bai noted.  

Email: lansuying@nbd.com.cn