• Ker Zheng

This $14 Billion Retailer is Using WeChat to Create an Omnichannel Retail Ecosystem

Updated: Nov 13, 2019

For today's WeChat mini-program case study, we turn to one of China's largest smart retailers, Suning. Suning was founded in 1990 as an appliance retailer (think Sears), selling washing machines, microwaves, and other kitchen appliances.

More recently it has transformed itself into an omni-channel smart retailer, expanding its assets to include supermarkets, convenience stores, and more. It now has 8,880 stores across 700+ cities in China.

Earlier this year Suning paid US$705 million for an 80% stake in French supermarket retailer Carrefour's China business, placing it in the same league as the JD-Walmart-Dada alliance and Alibaba's smart retail ecosystem.

We take a look at Suning's omni-channel ecosystem and how its WeChat mini-program plays a crucial role in tying it all together.

An Introduction to Suning's Mini-Program

Suning's omni-channel mini-program provides two main functions: omni-channel O2O (online-offline) retail services and same-day e-commerce delivery.

These two functions enable full access to Suning's ecosystem of its own branded convenience stores (Suning Xiaodian), supermarkets (incl. Carrefour), and more.

Let's look at the e-commerce functions first. Suning incentivizes customers with free delivery services from supermarkets and convenience stores if they spend over 86 RMB on an order.

Suning provides on-demand delivery services, meaning that customers within a 3km radius can have their orders delivered within one hour, and those within a 1km radius can have their orders delivered within 30 minutes.

Categories include snacks, beverages, dairy/yogurt products, and other FMCG items.

Suning's mini-program also offers coupons for new members and discounts on gift cards. Below, a 15 RMB coupon is offered for new users and dairy brands Yili Dairy and Mengniu Dairy offer discounts on virtual gift cards purchased and redeemed within the mini-program.

Suning and Social Commerce

Suning also embeds social commerce marketing campaigns into its mini-program. On the left, group-buying campaigns encourage customers to pull in friends and family on Groupon-like deals on fruit, offering steep discounts on oranges and pomelos.

For example, an orange from Sichuan province is marked down from 35 RMB to 9.9 RMB for customers who can pull in another friend to participate in the deal. This lowers user acquisition costs because current customers are helping Suning spread the promotion through word of mouth.

On the right-hand side Suning offers reward points for users that sign in every day, but also for users that are able to get a new friend to start using the app. The reward points can be later redeemed for member-only promotions.

Suning's Omni-Channel Retail Services

Now let's get to the juicy part. Suning stands out for its O2O, or online-offline services that bridge the gap between online and offline channels.

The "sheng huo bang" or live help button, launched in August 2019, takes users to a new menu full of various on-demand services, such as home appliance repair services, housekeeping services, phone repair services, and more. Users can book an appointment for these services at their convenience.

This makes sense for a few reasons. First of all, Suning is one of the largest retailers of white goods appliances in China. But what happens when those appliances break down? This mini-program enables Suning to provide after-sale services to its customers that other competitors may not.

It also gives Suning more data as to the types of problems customers run into after they make their purchases. This data gives Suning insights on how to improve the customer experience and retain customers for the long run.

Next Steps for Suning's Omnichannel Expansion

In its efforts to build a true omni-channel retail ecosystem, Suning has also rolled out its very own coffee chain and brand, Lion Coffee. Lion Coffee products are served on the second floor of Suning Xiaodian convenience stores and are now available at over 1,000 stores throughout the country.

The goal is to make Suning convenience stores a one-stop shop for the daily needs of any Chinese consumer. This helps drive foot traffic and gives Suning the chance to upsell customers on higher-margin products.

With the mini-program, it also gives Suning the chance to convert foot traffic customers into long-term loyalty members.

What's next for Suning's omni-channel expansion plans? Rumor has it that Suning is considering free-wifi services, printing services, shared phone battery services, umbrella sharing services, utility payment services, and more.

  1. Suning is one of China's largest retailers, originally selling white goods appliances and later branching out into convenience stores, supermarkets, and more.

  2. Suning's WeChat mini-program has two primary functions: e-commerce on-deamnd delivery services, and on-demand O2O (online-offline) omni-channel services such as appliance repair services, housekeeping services, and more.

  3. The mini-program's social commerce functions such as group-buying and new customer incentives help lower customer acquisition costs.

  4. Suning is growing its retail ecosystem to make its convenience stores a one-stop shop for both daily necessities and services. New products/services include coffee, printing services, utility payments, and more.

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Agency partnership: ker.zheng@azoyagroup.com

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