Guotai Junan: WeChat Mini Store "Gift Giving" Opens New Opportunities for Snacks and Beauty Products.

Guotai Junan released a research report stating that WeChat Mini Program has launched a "gift-giving" function, which is expected to help open up new traffic entry points for the WeChat e-commerce system, facilitate user conversion, and provide new channel opportunities for consumer goods companies. With the upcoming Double 12 and Chinese New Year shopping festivals, based on the experience of WeChat red packets, it is expected to help promote the development of WeChat e-commerce. Snacks and cosmetics have gift attributes and are expected to benefit from the launch of the "gift-giving" function on WeChat Mini Program. In addition, the category of proxy operation is sensitive to new channels and is expected to benefit from the development of the WeChat e-commerce system. Guotai Junan's main points are as follows: The launch of the "gift-giving" function on WeChat Mini Program is expected to bring new traffic entry points to the WeChat e-commerce system. On December 19th, WeChat Mini Program officially announced the start of the "gift" function's grey test, as another measure to activate social relationships and revitalize the e-commerce ecosystem of WeChat. Users can click "send to friend" on the product page of WeChat Mini Program and send gifts through interactive messages similar to New Year red packets. Recipients can fill in their address and click "receive gift" after receiving the message. WeChat Mini Program is the main carrier of the WeChat e-commerce ecosystem, and since the beginning of the year, WeChat Mini Stores, Video Mini Stores, and other e-commerce carriers within the WeChat ecosystem have been upgraded to WeChat Mini Program. WeChat has integrated the full flow of WeChat into WeChat Mini Program through official accounts, video accounts, mini programs, and search, to help integrate and develop WeChat e-commerce business. The launch of the "gift-giving" function is expected to bring new traffic entry points to WeChat Mini Program, promoting the development of WeChat social e-commerce. The launch of the gift-giving function coincides with the approaching Double 12 and Chinese New Year shopping festivals, and based on the experience of WeChat red packets, it is expected to promote the development of WeChat e-commerce. The launch of the gift-giving function on WeChat Mini Program comes just before Christmas, New Year, and Spring Festival. The function is expected to quickly divert user traffic to WeChat Mini Program and cultivate shopping habits on WeChat through the rapid spread of gift-giving needs during the holidays. With a huge social traffic in the WeChat ecosystem, which previously lacked means of e-commerce conversion, the gift-giving function is expected to bring new traffic entry points to the WeChat e-commerce system, help user conversion, and provide new channel opportunities for consumer goods companies. Snacks, cosmetics, and proxy operation sectors that are sensitive to channel changes may benefit from this. Given the gifting scenes during Double 12 and the Chinese New Year shopping festivals, snack and cosmetics products with gift characteristics and a high sensitivity to channel changes are expected to benefit from the "gift-giving" function on WeChat Mini Program, opening up new traffic entry points for brands. Brands such as Three Squirrels Inc. on WeChat Mini Program, Hongyun Gift Nut Gift Box, and various beauty and personal care brands like Proya Cosmetics, Hanshu, KeFumei, and ZJell also have layouts in the WeChat Mini Program and Tencent video accounts within the WeChat e-commerce ecosystem and are expected to benefit. In addition, the proxy operation sector, as the front end of online channel operation, is sensitive to the rise of new channels and new traffic, and the rise of the WeChat e-commerce system is expected to bring a catalyst to this sector. Investment recommendations: Recommendation to increase holdings: 1) Snacks: Three Squirrels Inc. (300783.SZ), YouYou Foods (603697.SH), Yanker Shop Food (002847.SZ), Jinzai Food Group (003000.SZ), WL DELICIOUS (09985), Chacha Food (002557.SZ); 2) Cosmetics: Guangzhou Ruoyuchen Technology (003010.SZ), Runben Biotechnology (603193.SH), Wanmei Shares (603983.SH), Proya Cosmetics (603605.SH), GIANT BIOGENE (02367), CHICMAX (02145). Benefiting targets: Qingmu Tec Co., Ltd. (301110.SZ), Hangzhou Onechance Tech Corp. (300792.SZ), Shanghai Lily&Beauty Cosmetics (605136.SH), BAOZUN-W (09991), etc. Risk warning: Industry downturn in demand, intensifying brand competition, underperformance of new products, etc.