The Chinese Market: An Emerging Opportunity
China is in the midst of a digital-social renaissance, where a prosperous, growing middle class…
By Anugraha Sundaravelu
If you don’t live in China, chances are, you might not have heard of China’s multipurpose messaging app, WeChat. Launched as Weixin which is Mandarin for ‘micro-message’, WeChat started off primarily as a messaging service as China’s answer to Whatsapp. Owned by Tencent Holdings, the 8th most valuable company in the world with a current valuation of 318.51 billion US dollars, WeChat has evolved to become more than the humble messaging app that it was originally positioned to be. WeChat’s monthly active user count is only 300 million fewer than the entire population of China.
How does one app gain the mileage to compete with giants like Facebook and Whatsapp in less than a decade? The answer is by being more than just a social messaging platform.
In 2013, WeChat Pay was introduced as the mobile wallet within the WeChat messaging service. With 900 million monthly users on WeChat Pay, they quickly became the biggest competitors of Alipay, China’s pioneer mobile payments solution. With the added advantage of its social element, WeChat caught up with Alipay in no time and is now a serious contender for the mobile payments throne. But the best thing about WeChat is its versatility and ability to be anything to anybody. As a one-stop solution to every conceivable need, the uses of WeChat extend to bus/metro services, food delivery, movie-ticket purchasing, IM, e-commerce, banking, dating, gaming, marketing and plenty more all rolled into one platform. Further, WeChat’s novel way of making friends allows users to shake their phones and find people around the world who are shaking their phones at the same time.
WeChat Pay became the go-to app to pay bills, recharge mobiles, make online purchases, transfer money to friends, and pay using QR codes at stores. Additionally, users can also buy wealth management products, virtual currency, and gifting products.
Here are the main elements of WeChat that you need to understand to get an idea of this Chinese behemoth driving cashless payments:
As China becomes increasingly cashless, WeChat introduced ways to make it easier for buyers and sellers to interact with the introduction of Mini Programs which are essentially mini-applications that enable brands to provide specific features to users such as e-commerce, task management, coupons etc. For example, Tesla has a mini-program enabling users to locate charging stations, schedule a test-drive and share their experiences on driving a Tesla car.
One million WeChat Mini Programs are used by 600 million people. 170 million WeChat users open an average of four Mini Programs per day. As they’re completely in-built within WeChat, they have very fast loading speeds and smooth integration with WeChat features like payments.
Official accounts are the face of a company on the platform through which they can interact with customers. WeChat makes it possible to link from a Subscription account article to a mini-program, thereby increasing conversion rates.
There are three forms of official accounts:
A good example is Dior China which became the first luxury brand to sell designer bags on WeChat. The limited edition of “Lady Dior” bag priced of 28,000RMB ($4,210) released on WeChat and sold out in a day.
WeChat Moments is like your Facebook newsfeed, but more streamlined and comments are only accessible to people who are connected to one another on WeChat. Additionally, users cannot see any 3rd party ads directly in their Moments’ feed. WeChat Moments counts 750 million daily users with 10 billion hits every 24 hours.
WeChat later launched “WeChat Moments advertising”, allowing brands to target audiences according to their location, interest, age, gender, device and phone network in Beijing and Shanghai.
WeChat digitally replicated China’s tradition of gifting cash-filled red packets with remarkable success. In 2015, 1 billion red packets were exchanged during Chinese New Year’s Eve. The money sent through these Red Packets is automatically transferred to the user’s WeChat Wallet and can be used to pay for products and services on WeChat.
WeChat Pay is now available in 49 countries, in 18 currencies and WeChat’s eWallet boasted a daily transaction volume of more than 1 billion last year. Social interactions are the driving force behind payments on WeChat. Merchants that used WeChat Pay on a monthly basis grew more than 80 per cent year on year. In April 2019, the number of retailers in Europe offering the service was 3.5 per cent higher than the same point in 2018.