As for early 2019, 1.097 billion of monthly active users, nearly 2/3 of China’s total population, were using WeChat as one online social service to chat and share with friends, read news, play games, track their fitness goals, make voice and video calls, shop online, and even pay for lunch. WeChat is taking over China in both social and commercial aspects.
It has grown into the largest and most influential social network in China. So far it should be “must-have” for every business – from tiny to huge – in China. However, it still remains in a certain way the closed book for many foreign brands. Let us step by step open it to you, with some updates for late 2018 and early 2019.
WeChat was launched by Tencent in 2011 as Weixin微信 – Mandarin for ‘micro-message’. As far as Tencent’s ambitions lay beyond just China it also gave the new program the more internationally-friendly name ‘WeChat’. In 2012, several new languages were added – mostly focused on SE Asia, though the inclusion of Portuguese suggested wider ambitions than China’s neighbors to the south. In markets where Facebook and Twitter are active – thus excluding the home market – users are able to sync up contacts from the aforementioned apps with WeChat, to encourage uptake.
Here, though, it’s important to share a caveat about WeChat marketing: WeChat is available worldwide, but the vast majority of users—up to 90 percent by some estimates—are in China. And in order to market to Mainland Chinese WeChat users, you need to have a business presence registered in Mainland China.
WeChat has been making a push for international expansion, especially in Africa. It’s Africa’s fastest growing social communication platform and is estimated to have about 5 million users in South Africa alone (compare that to the 13 million South Africans using Facebook). So you shouldn’t overlook the WeChat marketing potential in the rest of the world, even if the numbers are not as tantalizing as that huge Chinese figure.
Another update came not so long ago. WeChat opened up its mini-games platform to developers worldwide. This means that WeChat outside of China could soon get a lot more interesting. The mini-games platform is a tab inside the WeChat app where users can enjoy basic games like Tetris, and it’s part of what makes WeChat so addicting within China.
Another big and important part of WeChat eco-system are different forms of purchasing, mostly called WeChat Pay.
WeChat Pay started off as an offspring of instant app WeChat. It was created so that people can actually “instant message” payments. Through WeChat’s partnership with banks, WeChat users could use the WeChat Pay’s facility to pay bills, buy groceries, and pretty much anything using their phones. WeChat is one of China’s two mobile payments giants. With Alipay, an affiliate of the Chinese e-commerce group Alibaba, they are streets ahead of their Western rivals in terms of technology, user-friendliness, number of users and ubiquity.
In 2015 Chinese citizens transacted $1 trillion through mobile payments using QR codes. In 2017 it was $15.5 trillion. In 2020 experts could say it is forecast that Chinese consumers will transact $45 trillion through mobile payments.
In 2018 Tenpay (platform for all payments in Tencent) recorded 460 billion annual transactions, while Alipay only recorded 197.5 billion transactions. Thus, Tenpay boasts an average daily transaction number of 1.2 billion, while Alipay only has 0.5 billion.
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If to continue compere Tencent and Alibaba, Tencent seems to be a lot more conscious in its expansion outside mainland China. By now it has already launched a tax return mini program in over 81 airports. During the Chinese New Year 2019 WeChat users could send and receive red envelopes in Hong Kong (China) and Malaysia. It has become the first mainland mobile payment provider with a financial license to provide payment solutions to the Hong Kong Special Administrative Region population. WeChat Pay also collaborated with its messaging competitor Line in response to Alipay’s quick expansion in Japan.
While the numbers do tell us WeChat Pay might beat Alipay, the battle will still be on who gives the best services. Now, WeChat Pay and Alipay both have their own respective fields of focus and differences.
With regard to their financial services, both offer pretty much the same things such as money transferring, bill payments, e-commerce, service purchasing, etc. The main difference would be in their marketing strategies. WeChat Pay, following the social nature of WeChat, focuses on the social aspect of e-commerce and overall social UX. Alipay, on the other hand, follows the business-like nature of Alibaba and puts the focus on payments for retail, e-commerce, wholesale, and other forms of selling.
Talking about advertising facilities, we should mention, that WeChat has an advertising platform which can help you to boost followers in the early stages. However, you need to create a fair amount of content before launching the advertising campaign.
WeChat provides two advertising alternatives for verified accounts: Moments Ads and Account Ads. Brands are able to advertise on WeChat with banner ads, KOL advertisements, and Moments ads. The Moments section is the most expensive form of advertisement of WeChat.
Last year WeChat finally introduced new advertising features which have long been popular on Facebook such as retargeting (ability to show ads to users who have been involved in past campaigns) and lookalike audiences (ability to submit a list of WeChat users / Phone numbers to WeChat and ask WeChat to look for similar profiles through its artificial intelligence algorithm). These could make WeChat advertising more effective, but there are still not so much sure it could be effective.
Moreover, Tencent undergoes a major advertising restructuring during February 2019. This drastically decreased the number of authorized WeChat advertising agency, leaving only the largest company to control the market. Tencent also starts to offer a lower rebate rate to advertising agencies. This reduced the admin cost of supporting advertising agencies and possibly will have a positive impact on the next financial quarter.
Back to content and engaging audience. For companies WeChat proposing a wide range of options to work with all these.
At first, companies can open a WeChat account (service account or registration account) offering a simple way to communicate directly with their followers and to share brand promotional content.
It should be said that in China most companies, especially SMEs, will pay more attention to their official WeChat accounts than to their own websites. It is possible that many small businesses do not even have a formal website, as a large number of Chinese users have moved from the PC age with the screen to much more convenient and comfortable use of mobile platforms, especially WeChat. All these can’t really bring you new customers, but it will work as a constant and solid connection with your loyal customers in China.
WeChat official account could be also a good platform to keep your customers informed about news and promotions. Researches show that users most likely follow and check official accounts searching for information or learning.
Brands can engage with customers through an official account. For example, in a Valentine’s Day campaign, Tiffany & Co. used WeChat posts to ask followers about the meaning of love by sharing their take on the phrase “Love Is…” The campaign encouraged user engagement with the Tiffany brand while positioning Tiffany jewelry as the appropriate gift for the ones you love. While they were already thinking about love, WeChatters could use a tool within the Tiffany & Co. WeChat Official Account to find the ideal engagement ring, then use the store locator to see where they could go to buy it.
One of the most effective ways to find new followers is via using QR codes. In Korea, discount chain store E-Mart created a three-dimensional sculpture that showed a QR code in shadow when the light hit it at just the right angle. Since lunchtime is a key time for online shopping, that’s when the QR code would appear. Scanning the code took users to the E-Mart WeChat Official Account, increasing both followers and sales.
But perhaps the most exciting use of QR codes is by Stuff Magazine in South Africa. Products in the magazine are matched with QR codes. Scanning those codes using WeChat takes readers directly to their WeChat Wallet, where they can order the product with a couple of clicks and at a discounted price.
But be cautious, as valuable a tool as WeChat can be for brands, that doesn’t mean anything they put up on there will be devoured by a grateful captive audience. Indeed, of the 14 million official accounts that were active as of late 2017, only 7% could lay claim to any posts that attracted over 1,000 views. And only 0.01% achieved more than 100,000 views for any single post (see more on content read rates in WeChat Usage Statistics).
Previous studies have found a downward trend in the average follower count for official accounts, proportionally speaking at least. Between 2016 and 2017, we saw the number of accounts with fewer than 10,000 followers increase to over three quarters. A paltry 6% manage over 100,000, with all brackets above the lowest losing percentage between the two years.
Brands’ presence on WeChat definitely can open new markets. For instance, the ability to communicate with brands using messaging rather than emails is favorable to those outside of the bigger cities, who are unaccustomed to using emails, say experts. Voice messaging adds another layer of usability.
Previously WeChat was mostly used to promote business via official accounts. It still can work but mostly to inform customers. Nowadays WeChat mini-programs come on the scene and bring new options to interplay with followers.
WeChat is an open platform for companies to build their own apps based on WeChat, basically “an app within an app”, which is much cheaper and easier than developing a native app. And more importantly, this allows companies to access and interact more easily with the broad WeChat user base.
Mini programs are one of the key channels through which brands can reach prospective customers through WeChat – marrying the benefit of a ready-made audience with the streamlined cost and process of these versus a full-blown app. According to mini program developer, Jisu App, WeChat mini-programs number over one million, with 600 million users – or 170 million per day. The average user opens four mini-programs daily.
Companies may choose to launch mini-programs — or apps within WeChat — instead of a standalone app. The program allows businesses to send promotional messages directly to the user via WeChat, as well as tap into the app’s user base of more than one billion.
Mini-programs have become more prominent in the app, as WeChat makes a bigger push toward becoming a one-stop shop. Tencent recently updated the app so that the mini-programs feature now has its own page.
For example, Dianping mini-program lets you see ratings for local restaurants and services, ride-hailing firm DiDi, and food-delivery service Meituan. You can use all of these services within WeChat and make payments without ever leaving the app. In this way, WeChat becomes like an app store as it tries to keep users connected to its ecosystem.
In any case, mini-programs work well only for certain categories of products and services. The Jisu App survey breaks down mini-programs by sector, finding that clothes and shoes is comfortably the largest – accounting for nearly a third. This is followed by what would appear to be a quirk of the Chinese market: fresh fruit and vegetables (it is hard to imagine this category accounting for close to one in five apps in North America or Europe). Living goods and transport come in third place.
The fastest growing categories, according to Newrank and Youzan, are women’s clothes, cosmetics, and health. Fashion also leads the way in terms of content, followed by travel and news.
Spending levels on mini-programs are fairly robust, with over a third of users spending 501-1,000 RMB (roughly $75-150) per month. A similar proportion spend a slightly lower 201-500 RMB ($30-$75). A greater proportion can be found spending in excess of 1,000 RMB than spend under 200 RMB.
A new feature introduced in early 2019 essentially creates a new home screen within the WeChat app – which will bring mini-programs increasingly to the fore. Indeed, it has even been said that WeChat serves more like an operating system than any sort of traditional app in China.
So what we have to say about brands in WeChat in 2019? All the above could be shortly brought to 4 points:
o WeChatPay go huge and go global, so overseas brands shouldn’t underestimate it;
o The official account is important, but more for loyal customers;
o Tencent refreshed its advertising policy, let us see how it would work;
o Mini-programs are quite a new thing and they can work well, but for certain categories;
Brizzo is a dynamic and energetic investor, marketing strategist, musician and online reputation specialist. He is the Co-Founder of AICY Create, https://www.aicy-create.com/, a leading marketing agency based in China, with expertise in Personal Branding and China Digital Marketing.