In China, a WeChat (Weixin, 微信) account is a must. Its popularity is reflected in Statista's figures, which show Tencent Holdings' WeChat had 963 million monthly active users as of Q217.
The mobile app is used not just for news and communicating with others just as with Facebook or WhatsApp, but also provides easy access to a whole ecosystem of third party services, from utility payments to renting a shared bicycle.
The mobile app is used not just for news and communicating with others just as with Facebook or WhatsApp, but also provides easy access to a whole ecosystem of third party services, from utility payments to renting a shared bicycle.
Thomas Luo, Co-founder and Managing Editor of online tech media portal PingWest.com, believes that WeChat will be a key driver of China's technology innovation in the new economy. "WeChat has dominance not only for reading and social, for chatting, but for mobile app services that people use every day," he said at the Huawei 2017 Sino-foreign Media Exchange Conference in Beijing, China. "People can directly use (third party apps) through WeChat."
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| QR codes are ubiquitous in China. Contact details will include QR codes instead of web links. This truck was on a road in Shenzhen. |
The payment capability is particularly seamless, as I found out for myself. Every WeChat Pay (微信支付) digital wallet user has a personal QR code that provides access to the wallet. Once the cashier scans the QR code, the required amount is deducted from the wallet automatically, and both retailer and user are notified immediately. The merchant can also choose to print out their QR code instead. WeChat users scan the code, key in how much they would like to pay, and the transaction is complete.
Credit cards can be linked to the wallet, with maximum deduction limits stipulated, and deduction authorised with a PIN. Money can be transferred from the wallet to a bank account for a small fee*; money can even be transferred to other WeChat users as a 'red packet' (红包), which is traditionally used to present gifts of cash in China for luck on auspicious occasions like birthdays, weddings and festivals.
While merchants do have to pay Tencent for WeChat transactions, they can communicate directly with WeChat users who have patronised them in the past. After paying for items from FamilyMart, the convenience store was able to send me marketing mails and notices of promotions via WeChat mail, while Burger King offered memberships.
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| A Huawei employee purchases drinks with WeChat Pay at a 7-Eleven in a Huawei dining hall at Huawei's Shenzhen campus. |
While merchants do have to pay Tencent for WeChat transactions, they can communicate directly with WeChat users who have patronised them in the past. After paying for items from FamilyMart, the convenience store was able to send me marketing mails and notices of promotions via WeChat mail, while Burger King offered memberships.
With many merchants supporting WeChat Pay and its main rival Alipay in China, it is entirely possible to go through days without requiring any cash at all. The QR code payment model popularised by Alipay and WeChat Pay could well reach other parts of the world, too. Payments services company Stripe noted in a July blog post that Alipay and WeChat Pay dominated the mobile wallet ecosystem in China in 2016, with combined market share of 92%, and offers global support for Alipay and WeChat Pay.
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| Screenshot showing WeChat notification for a WeChat Pay deduction of RMB84.60, received once the payment was made. The amount is listed but not details of what was purchased. |
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| Screenshot showing WeChat notification for a successful WeChat Pay deduction of RMB84.60, received once the payment was made. |
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| Screenshot showing marketing promotions from FamilyMart, the convenience store. |
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| My limited edition giant chestnut sundae from Burger King in Shenzhen, together with a receipt that says payment was received through WeChat Pay. |
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| Screenshot showing marketing promotions from Burger King inviting me to get their loyalty carrd. |
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| Ad at Guomao station in Beijing encouraging commuters to use Alipay to pay for a shared bike ride. According to research firm Analysys Mason, Alipay is the dominant payment provider in China, with WeChat in No. 2 position. |
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| Singapore is fast adopting new cashless experiences as well. Alipay is accepted in Comfort taxis in Singapore. |
While Alipay is backed by Alibaba's e-commerce business, the beauty of the WeChat system is the extensive real-life ecosystem that supports WeChat functions, including for payment. The system is raking in revenues for Tencent, which reported Q217 results in August. "Social and others advertising revenues" grew by 61% to RMB6,071 million, primarily because of growth in advertising revenues derived from WeChat Moments and WeChat Official Accounts, Tencent said. The company also said that revenues in the "others" category increased by 177% to RMB9,654 million for the same period year-on-year, mainly due to revenue growth from payment-related and cloud services. With such positive numbers, WeChat is likely to remain popular in China for some time to come.
View China's top 500 apps according to iResearch for August 2017
Read the TechTrade Asia blog posts about:
Tencent's tieup with Starbucks in China for social gifting via WeChat
Singapore's StarHub launching WeChat SIMs for China visitors
Digital trends in China shared at the Huawei 2017 Sino-foreign Media Exchange Conference
Hashtag: #华为OPENDAY
*Transfer fees are charged for transactions beyond a minimum amount.
Note: This report stems from a Huawei-hosted visit to China. The company sponsored accommodation and travel costs. Screenshots are from a Huawei P10 phone.
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