Social commerce is one of China’s biggest trends, and Tencent’s WeChat is leading the charge towards a cashless, socially-stimulated retail consumer culture.
In March 2018, WeChat hit 1 billion monthly active user accounts, meaning the distance between social users and businesses continues getting lesser. Since then, the app, launched by Tencent in 2013, has grown into one of the top two digital payment services in China.
Each WeChat user has an account. To activate it, receive money packets and gain credits, users link it to their bank accounts. As of 2016, WeChat Pay has over 600 million user accounts linked to banks. Over 300,000 merchants across China have also enabled payments through the app.
More than 300,000 merchants across China accept WeChat payments
The mobile payment landscape in China is very different to what exporters are often used to in the West, where card and cash are still considerable competitors.Chinese consumers have essentially skipped the card payment generation and leaped directly into mobile payments.
While WeChat Pay is headstarting globalisation in 2018 as you can now link international cards to the service, there are some geographic hurdles. It’s specific to certain countries, and it only works when WeChat is downloaded in China.
For exporters who want to leverage the perks of WeChat, it’s easier and more convenient to garner a digital presence that circumvents that.
But what are the perks of WeChat Pay? How can exporters wield WeChat’s social power to secure a stake in the largest e-commerce market in the world?
Closing the Loop
To say that WeChat is popular, would be an understatement.
The penetration of the app in the day-to-day life of a Chinese smartphone user is around 83%. Among them are diverse demographics catering to different commercial targets: from Generation Z to over-60s, from the urban to the rural.
Integration with social media means that WeChat advertising can be a gateway to securing transactions. The loop, between a user seeing a product and buying it, closes that much faster with the convenience of paying in one continuous action.
600,000+ expats in China actively use WeChat, and they are more avid than native users
WeChat also offers access to China’s 600,000+ expats. Who, according to a 2016 report, are far more active on the app compared to native users.
“Foreigners in China […] use WeChat payment, they grab red packets, they each save at least 100 sets of stickers, and they all want deeper involvement in Chinese society,” says Fang Yedun, partner at Y-plan, a support programme for China’s foreigners.
Exporters should pay close attention to social commerce to capture the attention of their demographic. From then on, it’s easier to build connections to convert passive interest into active sales.
In 2014, Wechat introduced Red Packets (hongbao): a digital equivalent of the monetary gift commonly found in Chinese culture.
Users exchange hongbao during holidays, often with set money amounts reflecting the celebration.
On regular days, red packets are sent into group circles, whose members scramble to be the first to tap open a red packet and secure the prize.
In 2017, WeChat users sent 46,600,000,000 red packets during the Lunar New Year
By tapping into tradition and gamifying it, WeChat Pay has captivated a vigorous demographic; mobilising and accelerating the exchange of funds on an incredible scale. In 2014, WeChat users sent 0.2bn red packets during the Lunar New Year. In 2017, they sent 46.6bn.
It’s an example of the trust and security Chinese consumers have in using WeChat Pay. For exporters, wanting to establish a similar relationship with consumers, keeping this in focus is the way cultivate sustainable growth in China.
Setting the right strategy for social commerce is an integral part of any exporter’s key action plan. ACOLINK’s social media services teach, guide, and launch brands on a social visibility pathway to optimise sales and accelerate growth. Contact us to find out more, or sign up for our Let’s Do China workshops.