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An introduction to WeChat: The evolution and future of China’s most popular app

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An introduction to WeChat: The evolution and future of China’s most popular app

WeChat [1] has grown from a voice messaging platform into a truly ubiquitous app experience in China. Owned by parent company Tencent Holdings, WeChat has over 900 million monthly active users.

Those users are very active, too; the average daily time spent on the app rose to 66 minutes in 2016 [2] – Facebook’s daily average is 50 minutes.

WeChat’s growth [3] still shows no sign of slowing, either. For example, there is a significant, untapped opportunity to monetize this vast user base through advertising, gaming, and payment processing.

Known in China as Weixin, WeChat’s various functionalities are now deeply woven into the fabric of daily life for its users.

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As such, this is now known as the WeChat Universe, and it continues to expand into new territories and new aspects of daily life.

Within this article, we will endeavor to provide some background on the past, present, and future of WeChat, focusing mainly on the following questions:

  • Where has WeChat come from?
  • What exactly is WeChat?
  • Who typically uses the app?
  • What can it be used for?
  • What are WeChat’s ‘mini-apps’?
  • Why is it so successful? And how does it compare to Western equivalents?
  • What do marketers need to know about WeChat?
  • How are brands using the platform for advertising?
  • Will WeChat expand internationally, or is its huge success confined to China?

First, some background

Tencent launched an instant messaging app, Weixin, from its Guangzhou Research center in early 2011.

This project took off quickly, with over 100 million registered users by 2012. In part, this instant success was down to the ability to make voice calls and leave voice messages, due to the more difficult nature of typing Chinese characters on a smartphone.

Later rebranded ‘WeChat’ for an international market, the app soon started to encompass more features. The addition of Moments was a particularly important milestone, as it brought with it a news feed featuring updates from friends and contacts. From here, Tencent has added features and opened up the app to outside developers too.

As a result, defining exactly what WeChat is in 2017 turns out to be a much more difficult task than it seems.

WeChat is a major player in the social space, so in that sense it is a bit like Facebook. This brings it into direct competition with Weibo in China. It contains instant messaging, so it is like WhatsApp. It has an app store, so it has similarities with Apple and Google.

However, these comparisons do not tell the full story.

We should first explore the capabilities that the WeChat ecosystem provides for an active user base of almost one billion people before we can summarize the experience it offers.

What can WeChat be used for?

Essentially, WeChat can be used for just about anything you want to do online. Although it does not own all of the products that reside within its walls, it does facilitate easy integration between most of China’s most popular apps.

Within WeChat, there are equivalents of Western apps like Tinder, Seamless, and Slack, along with hundreds of other popular services.

A couple of the highlights are:

Mobike

This bike-sharing program allows cyclists to pay for rides using their WeChat wallet. It is similar to bike-sharing schemes in cities worldwide aside from one difference: it does not require docking stations.

Bikes can be parked anywhere within major cities, which admittedly has created some difficult pick-up points. Mobike is not owned by Tencent, but the functionality resides within the WeChat app.

Donate Your Step

This mini app allows users to make small donations to charity for each 10,000 steps they take on a daily basis. For each 10,000 steps, a user can donate 1 Yuan, which is equivalent to roughly 15 cents.

There is also a leaderboard, showing the user how they compare to their friends. All of this encourages people to exercise and donate to charity on an ongoing basis.

Who uses WeChat?

According to Statista, WeChat appeals overwhelmingly to the 20-35 age group:

This is perhaps to be expected, although the trend is particularly stark.

What really sets WeChat apart is just how frequently it is used by large swathes of its audience. 60% of users open the app more than 10 times a day, with 21% of users opening WeChat more than 50 times per day.

All of that time really adds up; 17% of users spend 4 hours or more per day on WeChat. It is an addictive experience and provides everything people want from their smartphone, from gaming through to a slick payment system.

WeChat pay: WeChat’s killer app

WeChat Pay, also known as WeChat Wallet [4], is a user’s ‘digital wallet’ and it is used to pay for everything, either via a tap of the phone or a snap of a camera.

WeChat Pay now boasts over 600 million active users, compared with 450 million for its main rival Alipay, owned by Alibaba. Alibaba was the market leader until 2014, but the seamless nature of WeChat’s app integrations has seen it take a sizeable lead.

Within WeChat Pay, there are many options. A user can send and receive gifts, pay their rent, or donate to a wide variety of charitable causes.

The money held within the wallet can be invested by WeChat too, so the possibilities to monetize this technology are endless.

Mini programs: WeChat’s ‘app killer’

Mini programs are WeChat’s attempt to resolve a seemingly insoluble paradox on mobile devices: people spend a lot of time in apps, but they only use a very small selection of apps in total.

Convincing people to download new apps is difficult too; convincing them to keep using them is nigh-on impossible. Over 25% of apps [5] that are installed are never even used.

The real beauty of WeChat’s mini programs is that users don’t have to download an app to use them. The mini apps that live within WeChat can be accessed by anyone, at any time.

This removes any user concerns about apps taking up device storage and is no doubt a boon for brands too. Consumers are expected to use a much wider variety of mini apps within WeChat in future.

It is somewhat like Google’s Accelerated Mobile Pages initiative, or Android Instant Apps. But unlike AMP, this is not open source; the mini apps are restricted to WeChat.

Combined with WeChat’s partnerships with some of China’s biggest retailers (such as JD.com, an Amazon equivalent), we can start to understand why so many users are so engaged.

Does WeChat contain a search engine?

Historically, Baidu has been the dominant force in Chinese search marketing, to the extent that it is known as ‘the Chinese Google’.

However, that could be set to change. From its already lofty position in the Chinese app market, WeChat has recently announced [6] that it is set to launch a search engine. Known, rather unimaginatively, as ‘Search’, this will compete directly with Baidu and also provide something new altogether.

Tencent, WeChat’s parent company, also owns Sogou (a minor competitor to Baidu) which will at least lend this new venture some engineering expertise.

With so much personal data at its disposal, a popular publishing platform within the app, and a very engaged user base, WeChat is uniquely positioned to do what Google and Facebook so far have not been able to achieve. Uniting social with search would no doubt see WeChat take an insuperable lead in the Chinese app market.

How can brands advertise on WeChat?

There are options to market brands on WeChat [7], either organically or via paid promotions.

Although many of these options are quite standard and applicable to most social media platforms or search engines, there are subtle differences.

WeChat Store, for example, goes same way toward solving a continuing challenge with Facebook marketing. The full purchase journey is contained within WeChat, so users are not required to visit an external site from the platform.

This is great for conversion rates and is surely where we can expect other social networks to go in the near future.

There are new, innovative forms of banner advertising too. The example below, taken from a recent campaign by Mercedes-Benz, allows the user to customize the ad and also adapts to the weather in the user’s location.

Advertising is still a nascent area for WeChat, however. Paid promotion has only been available since 2015 and ads make up only 15-20% of Tencent’s revenues.

By way of comparison, ads make up more than 70% of Facebook’s revenue.

However, that number is predicted to more than triple [8] by 2018, rising to $11 billion in annual advertising revenues.

Could WeChat expand beyond China?

Some would say that it already has, with over 100 million registered accounts outside of China. However, the numbers we are dealing with when we discuss WeChat are so sizeable that there is some way to go before WeChat is viewed as an international success.

Most of those international accounts are held by Chinese people who have moved abroad, but WeChat has started to gain some ground in South America and Africa.

In the case of the former, an advertising campaign featuring Lionel Messi certainly won’t have harmed their popularity.

Africa has been a focus area for expansion, too. This applies to the Chinese government as much as it does to WeChat, and these two strands are interconnected.

As more and more Chinese workers move to Africa to work on government-funded projects, they tend to take their love of WeChat with them. There are now over 5 million WeChat users based in South Africa alone.

Moreover, it has been reported [9] that foreigners based in China have become even more addicted to the app than locals. As such, that could help to expand WeChat’s reach to Western markets.

The reality is that WeChat is quite unlikely to gain a foothold in the US. Its success relies on its ownership of so many aspects of daily life, and this ownership would be nigh-on impossible to wrestle from Google or Facebook at this stage.

There is another layer to this, potentially.

A wide range of studies [10] has highlighted how differently Chinese and American consumers perceive their respective environments. Where Americans will hone in on the people contained in an image, Chinese people will typically look more at the background and the surrounding items [11].

This cultural difference may be a small contributing factor to WeChat’s success in China, and its lack of an equivalent in the West. The preference among Chinese consumers for an all-encompassing, holistic view plays very well with the reach of the WeChat ecosystem.

In summary

WeChat has built its success on integrating its way into its users’ daily lives and integrating all of their most popular brands and services. This is all tied together by a dependable, seamless payments system.

We tend to think of advertising first, but WeChat has so far achieved huge success without availing of the platform’s advertising potential. By first building an engaged (in some cases, addicted) user base, it is now in a supreme position to provide them with useful advertising.

With a search engine on the way and reams of data at its disposal, WeChat will continue to grow at a rapid rate. That may not translate into international success; but frankly, Tencent doesn’t entirely need it to at this moment. The opportunity for a digital brand in China is more than sufficient on its own.

This article was co-authored by Chao Zhang and Clark Boyd of Croud [12].

Related reading

References

  1. ^ WeChat (www.clickz.com)
  2. ^ 66 minutes in 2016 (www.telegraph.co.uk)
  3. ^ WeChat’s growth (www.clickz.com)
  4. ^ WeChat Wallet (www.clickz.com)
  5. ^ 25% of apps (www.thinkwithgoogle.com)
  6. ^ recently announced (qz.com)
  7. ^ market brands on WeChat (www.clickz.com)
  8. ^ triple (walkthechat.com)
  9. ^ reported (shanghaiist.com)
  10. ^ studies (www.bbc.com)
  11. ^ the background and the surrounding items (www.pnas.org)
  12. ^ Croud (croud.com)
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