China shows how e-commerce takes over everyday life
Last week it emerged that the notorious car dealer who calls himself the ‘‘Wolf of Church Street’’ is actively selling cars on Facebook’s Marketplace platform.
Brent Smith (previously known as Anthony Basturkmen) used to operate a car sales business called Motor Me, but was taken to the Motor Vehicle Disputes Tribunal.
His business was issued a warning by the Commerce Commission for misleading consumers, then prohibited by Trading Standards, which administers the Motor Vehicle Traders Register. He’s also banned by Trade Me from offering vehicles on its marketplace.
But last week it was reported that Smith was still dealing in cars, selling Nissans and Toyotas via Facebook Marketplace.
Unsurprisingly his previous victims are fuming, but without a local Facebook compliance team in operation there appears to be little that can be done about it.
Facebook enabled its Marketplace functionality in New Zealand in 2016, after the platform was developed and prototyped by a former Trade Me staffer.
To say that it’s rustic is an understatement. You’re just as likely to be offered up some freshly baked cinnamon rolls as you are a Toyota Corolla.
Although you can tighten the discovery experience by becoming a member of a neighbourhood marketplace (Hutt Valley or Timaru) or a special interest group (cars or baby gear) it’s still a pretty bumpy ride.
It’s getting better, because Facebook remembers everything you previously clicked on and its machine learning is increasingly good at surfacing items that align with your interests.
But there’s no integrated payment mechanism, no proof of goods and no local trust and safety presence. Yet.
At the same time as it surfaced that Basturkmen had resurfaced as a car seller on Facebook, I was filming an automotive television show up north.
The production needed some local assistants, and the producer found them by using a Facebook open sharing group called The Grapevine.
Effectively this sees Facebook taking the role of both recruitment consultant and job board.
Like the Marketplace functionality described earlier, it’s completely free. Or more specifically, Facebook doesn’t charge money for the service.
Rather, the participants in that marketplace are giving their online behaviour information to Facebook in exchange for enjoying the utility of the service.
Both the bad car experience and the positive employment experience are examples of the same thing: the rise of embedded ecosystem e-commerce.
This is when e-commerce is seamlessly integrated into an online ecosystem where people choose to hang out. In the Western world that typically means Facebook, the Google suite of services or perhaps Instagram.
But the East, specifically China, has really mastered embedded ecosystem commerce. The Chinese online ecosystem has three giants – Baidu (think Google), Alibaba (think Trade Me or Amazon) and Tencent (think Facebook).
But each of these giants has embedded functionality that is as breathless as it is extensive. Millions of Chinese live their entire online lives in one of these – or just a subset of them.
Take WeChat as an example. WeChat is an app owned by Tencent. On this platform you can find a place to go for breakfast, order a Uber equivalent, pay for it, and then order a ride-sharing electric scooter and scoot to a cinema. You then see the cinema is looking very successful, so use WeChat to buy some unit trusts that invest in multiplexes.
You get the idea. As people start to live their lives in one app or online ecosystem, businesses will need to embed their offerings in that ecosystem to be relevant.
The West is playing catch-up. Last year Facebook filed patents for a payment and messaging system that would let consumers search and pay for products on Facebook via a messaging bot that sits inside a business’s Facebook page.
Also last year, Amazon passed Google as the No 1 search engine for consumer products. At the same time they were doubling down on their new Amazon Spark functionality, effectively an Instagram feed that showcases products that can be instantly bought then shared.
Put it all together and you know that once again the pace of change is ramping up. What seem like outliers right now – such as outlaw car salesmen and freelance production assistants – are actually milestones on the road to ecosystem commerce. The question is, what will end up being the WeChat or Alipay of Aotearoa?
Each of these giants has embedded functionality that is as breathless as it is extensive.