Radicle China: A conversation with Fateh Ali, Co-Founder and CEO of Kitcod on social commerce and why hasn’t it taken off in the West.

By Jianqian Lin

Welcome to Radicle’s Breaking Through Interviews, a series of conversations with companies at the forefront of the dynamic, disruptive, and fast-growing startup markets that matter to you. In today’s conversation, we cover:

• What is social commerce? Why is it important for brands to manage their own social experience?
• How are online commerce and social commerce changing in the coming years? What technologies or business models are enabling this change?
• How are brands and merchants preparing to apply this philosophy in a cookie-less future?
• What lessons do Western ecommerce companies have to gain from the success of their Asian counterparts?
• And more.

Enjoy!

Over the past five years, shopping as we know it has undergone a radical transformation, from a self-directed experience to communal event. Using innovative tools, social platforms are fostering conversations around brands and products, with wildly successful results. All of this has given way to a new space, popularly known as “social commerce.”

Radicle’s China Lead Jianqian Lin sat down with Fateh Ali, Co-Founder and CEO of Kitcod, to learn more about social commerce and where it’s headed next. Founded in January of 2022, Kitcod was conceived to help companies integrate in-app social features into their online interfaces. It’s built on the premise that online communities and social engagement can be vital assets for companies hoping to grow their revenues. By offering a comprehensive infrastructure that those companies can use to launch plug-and-play social features in a matter of hours, Kitcod is already emerging as a leader in the social commerce space.

Outside of his work at Kitcod, Fateh Ali is an Angel Investor, Advisor, and Entrepreneur who focuses on solving complex problems in the consumer-tech space. He’s co-founded multiple companies, including CollabDeen, a mobile app and payments platform that aims to create a seamless community engagement experience for users and nonprofit partners. Having been involved both in the corporate space and dynamic startups in the last decade, he has a well-rounded perspective on social commerce as an emerging industry. We were extremely excited to hear his thoughts.

(Fateh Ali, Co-Founder and CEO of Kitcod)

So what does the phrase “social commerce” mean to you, and how does it apply to your work at Kitcod?

I define social commerce as the platforms and communities that facilitate the shopping experience. People have always wanted to buy products and services based on the recommendations of people they trust, whether it’s family, friends, or their larger community. We want to feel inspired and informed so that we can have confidence in our purchases — social commerce sparks the discovery process, enables personalizations, and leverages individuals’ expertise and authenticity to build that trust. In today’s day and age, those recommendations often come from influencers that consumers follow on social media.

But even within that definition, it all depends on the context. Approximately 4.8 billion people — in other words, about 60% of the global population — use social media today. Many of the prevalent platforms are designed with a straightforward model of social commerce that enables brands to convert engagement directly into revenue. As I see it, though, social commerce and online shopping are in the midst of a seismic shift. This change is already fully underway in China, where revolutionary platforms like Taobao are already surpassing 400 billion yuan ($57 million) in annual sales.

We at Kitcod are providing tech layer for Social Commerce to mashup experiences like group buying or Live streaming commerce, where App owners are looking to mimic large players like Pinduoduo (which offers users major discounts via group-buying) and Douyin (social video platform known internationally as TikTok) that makes more than 60% of their revenue through social commerce. Every ecommerce app is mostly looking, and I am looking to provide tech experience

Kitcod will help consumer tech companies bring in social+ commerce group buying experience with plug-and-play low-code efforts in a few days, instead of months.

Can you talk about how you foresee online commerce and social commerce changing in the coming years? What technologies or business models are enabling this change?

I love this question, because this is exactly what Kitcod is designed to do. We are building the in-app social API infrastructure that companies can use to take part in this new form of social commerce. Using Kitcod, any brand or app can supercharge their platform with news feeds, user-generated content, groups, social graphs, chat forums, live streaming, commerce — you name it. We’re building a versatile, expansive social API and UI kit that’s helping usher in this new era. These kinds of tools increase user engagement, user retention, and the quality of the user experience which directly impact the sales and growth metrics.

The Covid-19 pandemic heightened the need for virtual and authentic connectivity, and this has forced us to adapt and connect in new ways — today, 63% of people use the internet to connect with friends and family. And this is only possible because the technology has advanced, the business models evolved, and the general mindset opened up to new possibilities. Together, these three forces inform how brands engage with their end users while accelerating the emergence of decentralized technologies in the social commerce space.

Let’s talk a little bit more about the old guard: Facebook, Instagram, and LinkedIn, to name a few. These more centralized powers are built on a model in which brands and businesses dictate the essential functionalities, from communication protocols to benefits for influencers. Users have minimal say on how these platforms function — it’s all dictated from the top, and then adjusted by the algorithms. But right now, with the emergence of new decentralized technologies, this whole model is being challenged and redefined. The blockchain is giving people — in other words, consumers — the power to shape the online marketplace on their own terms.

As a result, a widespread disruption of social commerce is already underway: in-app social platforms are emerging for every kind of consumer product, including Business-to-Consumer and Direct-to-Consumer. Companies that want to address and cater to their end users through the digital layer are realizing that they need to start building in-app social features now if they’re to fully harness the power of a decentralized web.

Pinduoduo, which is already valued at over $100 Billion, offers a perfect case study for the potential of in-app social features. They started out just a few years ago by asking a simple question: “How can we bring consumers together as a community and unlock the potential of a brand?” The answer was just as simple as the question: by offering discounts.

Say I’m a user on Pinduoduo, and I really want to purchase a specific bicycle. I can either buy it for its retail value of $200, or I can invite a bunch of my friends to buy the same bike with me on Pinduoduo. If I successfully convince 10 of my friends to buy that bike, we’ll all receive a 20% discount. It’s a win-win for everyone, since my friends and I get a steep discount on a product we love, and the company is able to make a healthy profit. And it’s all thanks to the influence of decentralized technology, which gives consumers the chance to leverage community for their own benefit. It’s this kind of harmony that all in-app social platforms should be designed to achieve. And while some companies choose to rely on an in-house team to build these platforms, Kitcod provides all of the necessary in-app social infrastructure, from the whole UI kit to intelligence features.

Intelligence is obviously another key component in all of this. If a brand wants to leverage user-generated content to their advantage, they’ll need to harness both product data and user data to build a cohesive strategy. On the product data side, you have sales metrics, including purchases, subscriptions, and page traffic. And on the user data side, you have Personal Identifiable Information such as profile data and geographic information. But the most useful data for any brand is the content generated by the user, whether in the form of posts, comments, or reviews. Kitcod processes all of this — the product data, the user data, and the content data — to provide a comprehensive snapshot on what’s happening at any given moment. And with our AI/ML, we can help brands personalize feeds and target content moderation with higher efficacy.

Meanwhile, the app owners can sit back, relax, and monitor the data as they determine how to organize their automated audience segmentations. It’s all displayed on a range of real-time dashboards that cover behavioral analytics, campaign optimizations, and A/B testing. This serves as that single source of truth companies need to unlock the power of communities within a social app. Of course, not everyone will reach Pinduoduo’s level of success, but any company that wants to excel in this space needs to at least start with this kind of technology. And rather than spending 8–12 months building that infrastructure in-house, they can turn to a tech vendor like Kitcod to buy in-app social features in a matter of hours. With Kitcod, there’s no need to go out and find intelligent people who can build and scale the technology; you don’t have to start from scratch. And that’s what makes Kitcod a revolutionary product.

So why is it important for brands to manage their own social experience instead of joining a third-party integrated platform where they can showcase their products?

Let’s look at the big picture: even though customers have radically evolved over the past ten years, they’re still social animals at their core. They still gravitate towards a sense of community and belonging when making purchase decisions — the only real difference is that none of this community-building takes place at physical stores anymore. Instead, it’s happening in the virtual space.

By accepting this reality and implementing it into marketing strategies, companies can win over customers in innovative ways. Andreessen Horowitz asserted that the best version of any consumer product is the version that’s intrinsically social, and I couldn’t agree more. If you successfully integrate that social element into a product’s identity, it becomes so much more than a product — it’s also a shared experience. Customers can join their friends on the platform and see what those friends are purchasing, and then they can create content together based on those purchases. And that’s the thesis of Andreessen’s point: when you bring that social element into the business, the customer is invigorated, and the brand is catapulted to new heights.

This point really resonates with me — as social animals, we all seek that sense of belonging. But how are brands and merchants preparing to apply this philosophy in a cookie-less future?

It’s a question that everybody’s asking, especially since Google announced that Chrome would phase out all third-party cookies. It marks a major shift in the digital landscape because so many brands still rely on data extracted through cookies. Without cookies, companies will need to identify and cultivate new types of customer experiences that serve their brand. Consumers are already aware that their information is a commodity, and they don’t just want to give it away, so companies need to be one step ahead of the curve — they need to provide useful services that enhance the customer experience without forcing them to share their data. And there are so many viable avenues for this: engagement with the brand, interactions with the services on top of the tech layer, and community-building tools. It’s all about changing customers’ habits and behaviors by providing them with amazing service.

What steps should merchants take to improve their customer experience online?

First and foremost, they need to add social features. It’s already an undeniable trend — companies that feature in-app community engagement in their core strategy are excelling, regardless of industry. eToro, for instance, created a platform on which casual crypto traders can pick the high-performing professional trader they most trust and then automatically copy their strategies. It also has features like newsfeeds with unlimited scroll and groups where traders can discuss strategies. Today, all of eToro’s competitors are trying to emulate them, and with good reason — its core strategy tapped into the essence of Social or a community within.

There’s something to learn from every company that’s breaking new ground in this domain. If you compare ESPN with Strava, Bookings.com with Travelo, or traditional podcasting platforms with Clubhouse, faith-based apps like CollabDeen and Glorify are providing community-driven experiences, you’ll always find the same result — these younger, innovative companies are doing a better job at attracting and retaining new customers. In-app social features are proving to be formidable acquisition and retention tools in any industry, from education to entertainment. It’s undeniably a game changer.

But in order to use this tool well, you need to have a clear, cogent strategy. Every successful social commerce platform has two distinct but interwoven elements: an interaction layer and a transactional layer. The interaction layer appeals to the emotional-cognitive side of the user, while the transactional layer is more functional and rational. When consolidated onto a single platform, the two create an online product that customers don’t want to leave. Competitors, meanwhile, struggle to attract audiences away from these platform unless they successfully create a similar product. In the next four to five years, markets are going to dramatically shift — the brands that prevail will be those that strike a delicate balance between interaction and transaction through in-app social features.

Let’s return to the Pinduoduo example — their transaction layer is an online marketplace that offers discounted prices. But this layer is inextricably linked to the social layer, where people access those discounted prices by building communities. And when you put those two elements together, the whole platform becomes extremely appealing. The more friends someone has on this platform, the more discounts they receive — the two layers feed seamlessly off of one another. It’s a brilliant business model.

In my opinion, this kind of product design represents the future of both social media and online marketing. And brands hoping to use it should definitely consider whether they want to build those social features internally or through a platform like Kitcod.

So we’ve talked a lot about use cases that have emerged and thrived in Asia. But not as many of these companies have appeared in the West. What lessons do you think Western ecommerce companies have to gain from the success of their Asian counterparts?

Yeah, that’s a great question. I’ve been talking about this exact phenomenon for a while now — despite the obvious effectiveness of this model, it’s still largely absent in Western markets. In 2015, I went to China and started learning more about Chinese apps and business models. I saw firsthand how the Chinese market has fostered these kinds of companies, and how this trend more recently spread to Southeast Asian markets.

In my experience, the most striking difference between Western and Asian markets is the mindset of developers. In Southeast Asia, China, and India, developers are focused on unlocking the experiential potential of mobile devices, whereas developers in the West remain driven by older technologies. TikTok offers a perfect example — it gave every user the chance to create original content through their phone. This kind of platform never would have been founded in the US, where developers are focused primarily on building products that will lead directly to sales.

In Asia, developers are already well ahead of the curve — they’re figuring out how to turn the mobile-first lifestyle into revenue. By harnessing hardware features like QR code scanners, videos, and fingerprints, they’re unlocking the potential of their software. And with highly complementary hardware and software features, these newer apps are rendering the traditional ones obsolete. Consumers want platforms that use the most innovative features of smartphones: AR experiences, QR code scanners, and cameras.

Only in the past couple of years have Western developers really started incorporating these features into their products. If they had thought about this stuff five years ago, they would have fully unlocked mobile’s ability to enrich the user experience, and we’d be having a much different conversation right now. Instead, they’re learning from their Asian and Southeast Asian peers and scrambling to catch up.

Super apps offer a perfect example of this trend. There are already so many in China, Singapore, Malaysia, Indonesia, and India. But where was the West during the last five years when these trends were picking up momentum? Even today, if you ask someone in Europe or the US if they have a super app on their phone, chances are they don’t even know what you’re talking about.

Why do you think super apps and Social+ don’t exist in the West?

It’s all about mindset. Until recently, developers and product owners in the West hadn’t tapped into the potential of the mobile-first and community experience. Only now are people starting to recognize what they’ve been missing. These technologies have been ready for years, but the people responsible for building the necessary software have dragged their feet. Hopefully soon consumers in the West can start to experience the joy of super apps.

Many companies and VCs in the west have been eying the Social+ trend and each want a bite of the pie. Among the most notable examples and the one that we really love at Kitcod is a16z (Andreessen Horowitz) that created an entire series dedicated to this phenomenon and we are going to borrow from it to further define Social+ companies.

Great. Thank you so much for offering your insights, Fateh. It was a pleasure talking.

Thanks for having me!