Sometimes you get this feeling. You just know something irreversible is about to happen. I remember the feeling from our first Shopping2020 trip to Silicon Valley in 2013. The dynamics, intensity and innovation power of the great American Tech-Titans (Apple, eBay, Google, Facebook) was overwhelming. My first visit to Hangzhou in 2014, and to Alibaba specifically, evoked the same feeling: the enormous power and the huge impact of an almighty market leader that’s going to change the world has. This time it’s Tencent with WeChat.
I wrote about Tencent before in my blogs. It is WeChat’s stock market-listed parent company. Tencent was founded in Shenzhen in 1998 and launched QQ instant messenger in 1999. QQ is the largest text message platform with 843 million active users. Tencent employs 25,000 young people. Average age: 27 years old. In 2011, WeChat was launched. I dare to say WeChat is already THE killer app in the second decade of this century.
Chinese addicted to WeChat
Over 600 million Chinese people, with a 3G or 4G supporting smartphone, spent around 3 hours on WeChat on a daily basis. Users of WeChat seem to check the app – if they are not asleep – every 5 minutes of the day. A lot of Chinese own more than one account. We also see a digital merge in private and business use here. On the other hand, QQ instant messenger is used less often. QQ is viewed only a couple of times a month and is mainly used to store and keep up with some photos.
Already 100 million Chinese people use WeChat outside the borders of China. WeChat focusses on Chinese living abroad – who are still connected to China through a bank account – by supporting 70 languages. WeChat is already responsible for over 70% of all time spent on apps in China!
WeChat has an answer to everything
WeChat combines the best of WhatsApp, Twitter and Facebook. The payment option is what makes this mobile application truly unique. Besides that, Chinese consumers can demand the following features at any random opening screen:
- Moments – to share memorable photos or videos with each other: not only through texts on your screen, like WhatsApp, but also through videos which play directly on your screen.
- People Nearby – displays other users of WeChat in your area
- Of course you can also just play games. The Shake option allows you to see, wherever you are, who is on WeChat to play against you. You activate the Shake option by – yes, you guessed it – shaking your phone up and down really fast.
- You can easily scan each other’s business cards with Scan QR Code. This way, we added many contacts on WeChat many times during our ShoppingTomorrow trip. Above all, Scan QR Code can also be used to pay for items, both online and offline.
Being able to pay for things is the most important feature WeChat offers. This is also the main difference with WhatsApp (by Facebook). WeChat Pay uses Tenpay: the online payment solution of parent company Tencent. Below some examples of how WeChat changes the Chinese (e-)commerce landscape rapidly.
Examples of possibilities to pay in the WeChat opening screen:
- Utilities: scanning and paying your energy and water bills through WeChat
- Transfer: sending money to friends by using one click, so they can pay their taxi fare or a restaurant bill.
- Go Dutch: splitting and directly paying your bill, for example in a restaurant.
- Hongbao, also known as “Lucky Money”: sending a red envelope with money like you do at a birthday or wedding (Hongbao literally means “red bag”). Another popular feature of Hongbao is to send an envelope with money round to play a game together (remember, Tencent became huge by gaming). You invite your friends and they can open your envelope and play along with the game.
Hongbao campaign WeChat
Of course you can also use WeChat to pay your regular bills, buy a ticket to the movies or order and pay for a plane ticket. DiDi Taxi, the Chinese version of Über, now has 100 million users. WeChat payment already facilitates over 60% of all payments.
WeChat City Services
WeChat facilitates omnichannel retail
WeChat also facilitates being able to pay in an omnichannel environment, like we witnessed during a visit to Metro in Shanghai. At one of the two pilot locations of German Metro Cash & Carry we saw the Shake function into practice: young visitors looked at Shake to find coupons and other discounts for this supermarket.
woman shows WeChat Shake function in Metro shop in Shanghai
The coupons and discounts are evoked through iBeacons. You can save all your coupons in a “card pack”, which offers a direct link to the retailer (online store in WeChat). Apart from that, the Shake option also functions when you sit at home in front of your TV. Large numbers of young Chinese people look for special offers by scanning a QR code while watching the eight o’clock news.
A lot of Chinese people use WeChat in grocery stores and other shops: the cashier scans the barcode or QR code on the smartphone and the payment can be done easily. Of course the supermarket installed the WeChat API into its software to make this possible. Stores pay a certain amount per transaction, which is less than the traditional payments through the national bank, China Union.
Online customer service is also being handled through WeChat. Stores and businesses get corporate accounts so there’s a possibility for a live chat with an online agent.
When will WeChat be available in Europe?
The big question for our ShoppingTomorrow delegation: when will WeChat be available in Europe? There are rumors of an expected pilot in Italy. The representatives of Tencent and WeChat did not provide an answer to this question. They talked about enrolling WeChat in Southeast Asia and after that the United States and Europe will follow.
Tencent and WeChat focus on B2C market
In the tug of war between Tencent and Alibaba, Tencent seems to focus even more on the B2C market with WeChat than Alibaba already does. According to the lecturer of Alibaba this remains limited to social media, but in reality this seems to turn out differently: the app seems to overwhelm the digital Chinese market with 600 million active users who spent an average of 3 hours per day on WeChat. And while WhatsApp mainly wants to derive money from its corporate clients, Tencent seems to focus on the one-on-one B2C market. With 1.3 billion Chinese, this does not look like a bad idea at all.
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