China is different. Contrasting Western countries like America to China, you can immediately see the difference in culture, language, behaviour, beliefs, buying patterns, just to name a few. But one main difference that companies should pay attention to when entering the market is the social media landscape. Because of government restrictions and regulations with its infamous use of censorship, the barrier to entering Western social media outlets like Facebook and Instagram is much higher in the east therefore, people look for other options and that is where WeChat fills the gap.
Size of WeChat
WeChat is not only the ultimate social media platform in China in terms of functionality, it is the number one social media platform in China in terms of usage. WeChat Official Blog’s 2016 data report stated at the end of the third quarter there were 768 million daily users, and they were seeing a 35% year-over-year growth. However, the importance of the number is not in the number alone. Unlike western social media platforms in which you can increase and brand awareness, WeChat allows these 768 million daily users to make one-click payments. This means that through the official accounts that are created on WeChat, sharing articles and content, people can purchase products directly to their doorstep.
Now that’s a big deal. It makes WeChat, not only a brand building platform, but also platform that converts marketing efforts into direct sales – something that every marketer struggles to communicate to their finance department. That being said, it does not mean that you can ignore everything else, it just makes WeChat a requirement.
The Most Important Functionality of WeChat: One-Click Payments
As briefly mentioned before, WeChat is not only a social media platform. Although it has all the traditional functions of a social media app such as sharing content, chatting with friends, making phone and video calls, and allowing brands to advertise, it has a host of other abilities that we’ve never even considered in Facebook and the like.
The most notable function is the wallet which looks something like this:
As you can see, once you upload your bank card information into the application you can essentially do anything from topping up your mobile phone to booking your doctor’s appointment to ordering a taxi. But wait, there’s more…
You can use the money function to make everyday purchases at the grocery store, convenience stores and the like. Opening this element of the app takes you to a page with a personal barcode and QR code that POS systems can scan.
QR codes have been widely adopted in China and scanning one not only allows for purchases at stores that allow it, but also one-click transfers to entrepreneurs selling items such as food or jewellery both on the streets in China, and within the application.
Red Pockets are also widely used on WeChat. These are traditional Chinese red envelopes with cash inside but instead of physical Red Pockets, WeChat users send virtual ones as gifts or as transfers to pay back that friend who covered dinner yesterday. The most packets are sent on Lunar New Year’s Eve according to the Official WeChat Blog, which was over 2.4B packets in 2016. In general, it’s about 28 packets per month sent by the average user. This is about 580 RMB per month, per user spend on Red Pockets (don’t forget, that’s more than 768M daily users)
These payment functions within WeChat have been fully integrated into daily life, eliminating the friction of inputting credit card numbers when making purchases, thus increasing purchases of consumers and revenues of entrepreneurs. The app also increases the success (determined by sales) of foreign brands entering the Chinese marketplace. So don’t forget WeChat when establishing one’s market entry plan!
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