I've written a lot about Ant and Alibaba, but not so much Tencent, even though QQ social networking in China was a hot, hot topic a few years ago. It was the first social platform to launch its own currency and, with 300 million users, was quite interesting. Things have moved at a pace and ferreting around the internet this morning, I found this fascinating presentation by Matthew Brennan (you can get a PDF by emailing info@chinachannel.co). I would write a lot more, but the slides tell their own story so I'm posting them here. Take note specifically of section 3, which compares WeChat Pay to AliPay.
WECHAT KEY TRENDS REPORT 2017 MATTHEW BRENNAN CHINA CHANNEL
THIS PRESENTATION IS ADAPTED FROM A KEYNOTE SPEECH DELIVERED AT CHINA CONNECT CONFERENCE IN PARIS ON MARCH 2ND 2017
BREAKING NEWS: SLUGGISH GROWTH FOR WECHAT
IS WECHAT STILL COOL?
I HEARD EVERYONE IN CHINA IS USING WEIBO AGAIN.
WECHAT MARKETING IS DEAD
THESE ARE JUST SOME OF THE SILLY THINGS WE CAN EXPECT MEDIA TO START SAYING ABOUT WECHAT IN THE NEXT 12 MONTHS. LET’S TAKE A LOOK AT WHAT IS REALLY GOING ON.
“EVERYTHING IS WITH USER VALUE IN MIND. THE VALUE TO THE USER IS THE FIRST PRIORITY.”
IN THE SAME WAY THAT AMAZON IS RELIGIOUS ABOUT THEIR CUSTOMER EXPERIENCE. TENCENT IS RELIGIOUS ABOUT THEIR USER EXPERIENCE.
WECHAT USER NUMBERS & ENGAGMENT
MOST INTERESTING STATISTIC FROM WECHAT’S LAST DATA REPORT WAS…
“ONLY 1% OF WECHAT USERS ARE ABOVE THE AGE OF 55.”
DOESN’T EVERYONE IN CHINA USE WECHAT?
PREVIOUSLY CHCH SURVEYED 100’S OF PEOPLE IN RURAL TOWNS IN CENTRAL CHINA ABOUT HOW THEY USE WECHAT.
MOST SENIORS WE SPOKE TO USED PHONES THAT COULDN’T RUN WECHAT.
CHINA INTERNET USERS VS. WECHAT USERS
WECHAT MAU VS. QQ MAU
LINE MONTHLY ACTIVE USERS. THE FUTURE OF WECHAT?
PRETTY MUCH EVERYTHING THAT’S GOING UP ON THIS CHART IS OWNED BY FACEBOOK…
CHINA TOP 10 APPS JAN 2017 MONTHLY ACTIVE USERS (MILLIONS)
TYPICAL DAILY SCHEDULE FOR AN ENGAGED WECHAT USER
TIME SPENT ON MOBILE IN CHINA
TOTAL TIME SPENT ON MOBILE IN CHINA VS. TIME SPENT ON WECHAT
USER NUMBERS WILL TOP OUT. EXPECT WIDE NEGATIVE MEDIA COVERAGE. SENIORS ARE KEY (ONLY) AVENUE FOR GROWTH
WECHAT PAID ADVERTISING OPTIONS. FACEBOOK ADS FOR CHINA?
TENCENT 2016 Q3 EARNINGS REPORT
ESTIMATED NUMBER OF NEWSFEED AD IMPRESSIONS PER DAY
“THE NUMBER OF ADVERTISERS (USING WECHAT MOMENTS ADS) INCREASED OVER 100% IN THE LAST QUARTER.”
NEW FORMATS MOMENTS ADS: FULL SCREEN & INTERACTIVE
AD > MEMBER CARDS > COUPONS
“GIFTING FEATURE WILL GRADUALLY BE OPENED TO OTHER QUALIFIED RETAILERS IN THE FUTURE” – WECHAT TEAM
MOMENTS LOCAL ADS LAUNCHED NOV ‘16
MOMENTS ADS FOR SMALL BUSINESSES. FIXED PRICE PPM (PAY PER 1,000 IMPRESSIONS) STARTING FROM 300 UP TO 10 DAY CAMPAIGN. 4,400 BUSINESS DISTRICTS IN 81 CITIES
2016: WECHAT BANNED INCENTIVIZED SHARING 2017: H5 CAMPAIGNS ARE DEAD NOW RIGHT?
STORY TELLING & CREATIVE MUCH MORE IMPORTANT
“THE RULES ARE SIMPLE: WRITE GREAT CONTENT, CAPTIVATING STORIES, AND DON’T FOCUS ON SHOVING YOUR PRODUCTS DOWN THE USERS’ THROAT.”
EXPECT BETTER TARGETING AND MORE FORMAT OPTIONS, MORE SME FRIENDLY OPTIONS, FOLLOW DEVELOPMENTS CLOSELY, FIRST MOVERS ON NEW FORMATS USUALLY HAVE BIG ADVANTAGE
WECHAT PAY: THE 1ST UNIMAGINABLE TREND
3RD PARTY MOBILE PAYMENTS ($TN)
WECHAT USERS MAKING E-COMMERCE PURCHASES THROUGH WECHAT
CHINA 3RD PARTY MOBILE PAYMENTS MARKET 2014
CHINA 3RD PARTY MOBILE PAYMENTS MARKET 2015
CHINA 3RD PARTY MOBILE PAYMENTS MARKET 2016
COULD THIS BE THE YEAR WECHAT PAY DRAWS EVEN IN MARKET SHARE WITH ALIPAY?
WECHAT PAY REVENUE IS REPORTED UNDER ‘OTHER REVENUE’ IN TENCENT FINANCIAL STATEMENTS
LUCKY MONEY WAS THE KEY… THE PEARL HARBOR ATTACK
“IT WAS REALLY IMPRESSIVE! THIS YEAR’S PEARL HARBOR ATTACK WAS INDEED BEAUTIFULLY PLANNED AND EXECUTED.”
WECHAT: A SOCIAL APP THAT HAS SUCCESSFULLY TRANSITIONED INTO A PAYMENTS PLATFORM.
ALIPAY: A PAYMENTS PLATFORM THAT IS TRYING DESPERATELY TO BECOME A SOCIAL APP.
ALIPAY KEEPS ROLLING OUT NEW SOCIAL FEATURES…
HOW ABOUT APPLE PAY?
PAYMENT METHODS IN CONVENIENCE STORES: BEIJING ZHONGGUANCUN
BEIJING ZHONGGUANCUN CONVENIENCE STORE STAFF UNDERSTANDING OF APPLE PAY
2017 MAY SEE WECHAT PAY PULL EVEN WITH ALIPAY. ALIPAY WILL CONTINUE TO TRY AND REALISE THEIR DREAM OF UNLOCKING SOCIAL. APPLE PAY… ERRR, NO.
WECHAT INTERNATIONAL STRATEGY: TARGETING CHINESE TOURISTS
EVERY DOT ON THESE PICTURES IS AN ACTIVE WECHAT USER. WECHAT TEAM’S STRATEGY IN EUROPE IS NOT FOCUSED ON GETTING USERS. INSTEAD THEY WISH TO PROMOTE WECHAT AS A PAYMENTS AND MARKETING SOLUTION FOR BUSINESSES TO REACH CHINESE CONSUMERS.
GREAT NEWS FOR EUROPE
EUROPEAN BUSINESSES ARE NOW FREE TO OPEN CHINA VISIBLE OFFICIAL ACCOUNTS FOR CHINA MARKETING: 20K EURO MARKETING BUDGET COMMITMENT, 300 DOLLAR ANNUAL RENEWAL, 6 WEEKS PROCESS. OPEN TO ALL EUROPEAN BUSINESSES (EXCLUDING ‘SENSITIVE CATEGORIES’ MEDIA, POLITICAL ORGANIZATIONS)
THIS ACCOUNT IS VISIBLE IN CHINA!
AND OWNERSHIP OF OFFICIAL ACCOUNTS CAN NOW BE TRANSFERRED. YOU ARE NO LONGER MARRIED TO YOUR CHINA AGENCY! EXPECT ANOTHER IMPORTANT CHANGE SOON…
WECHAT PAY SIGNS STARTING TO POP UP GLOBALLY WHEREVER THERE ARE CHINESE TOURISTS
TENPAY (WECHAT PAY + QQ WALLET) TEAM IN TALKS WITH STRIPE JANUARY 2017
OPTIONS AND TARGETING FOR NON-CHINESE BUSINESSES WILL GET MUCH BETTER. EXPECT PLENTY OF WECHAT PAY DEALS WITH OTHER GLOBBAL PAYMENT SERVICES
COMPETITION: MORE NOISE?
“WECHAT USED TO BE AN EASY WAY TO ACQUIRE USERS. IT’S NOW MUCH HARDER. THEY ARE OVERLOADED WITH GREAT CONTENT AND SPAM. WECHAT IS MATURING.”
NUMBER OF WECHAT OFFICIAL ACCOUNTS 2013 THRU 2017 (FORECAST)
AVERAGE VIEWS ON WECHATSUBSCRIPTION ACCOUNTS FELL FROM 12% IN EARLY 2016 TO ROUGHLY 5% IN JAN 2017
KEEPING FOLLOWERS ENGAGED IS TOUGH ONLY 10% OF OFFICIAL ACCOUNTS THAT FOLLOWERS CONTINUE TO PAY ATTENTION TO
REASONS FOR UNFOLLOWING WECHAT OFFICIAL ACCOUNTS
REASONS FOR UNFOLLOWING WECHAT OFFICIAL ACCOUNTS
“A NEW FOLLOWER ON WECHAT IS 100X MORE VALUABLE THAN ON WEIBO. FOOTBALL CLUBS SHOULD USE WECHAT AS THEIR CRM PLATFORM FOR CHINA.”
WECHAT OFFICIAL ACCOUNTS POSTING TIMES: 9AM & 5PM PEAKS
WECHAT MOST ACTIVE TIMES FOR FORWARDING & SHARING
COMPETITION FOR PAGE VIEWS WILL CONTINUE TO INCREASE AS WECHAT MATURES
A CORE VALUE OF WECHAT FOR BRANDS IS CRM & PERSONALIZED COMMUNICATION CHANNEL
MINI PROGRAMS: THE TROUGH OF DISILLUSIONMENT
MOST MARKETERS CURRENTLY ARE UNABLE TO SEE VALUE IN MINI PROGRAMS
“THE ELEPHANT IN THE ROOM IS THAT OFFICIAL ACCOUNT’S BIGGEST VALUE ARE AS A BROADCAST CHANNEL.”
MARKETERS IN CHINA TREAT WECHAT LIKE EMAIL. YOUR WECHAT TIMELINE IS YOUR EMAIL INBOX FOR CHINA.
“ACTUALLY WECHAT IS EMAIL. IT’S A SHORT FAST EMAIL, BUT BECAUSE IT’S SO FAST YOU DON’T THINK IT’S EMAIL.”
BUT MINI PROGRAMS CAN’T BE USED THIS WAY
MOBIKE POINTS TO THE FUTURE OF HOW MINI PROGRAMS CAN ADD VALUE TO OFFLINE BUSINESSES
WECHAT QR CODE SCANNER + MINI PROGRAM SIGNIFICANTLY REDUCES FRICTION FOR FIRST TIME USE
WHAT WAS THE BIGGEST EVENT OF 2016 IN MOBILE?
POKEMON GO
POKEMON GO, IS PROBABLY THE BIGGEST THING THAT HAS HAPPENED TO THE APP ECONOMY, IF NOT JUST IN 2016, THEN IN THE ENTIRE LIFECYCLE OF THE APP ECONOMY. THE IMPACT OF IT WAS HUGE! SAMEER SINGH QUOTE
BAIDU MAPS AUGMENTED REALITY CAMPAIGN. ALIPAY AUGMENTED REALITY LUCKY MONEY FEATURE. QQ AUGMENTED REALITY LUCKY MONEY FEATURE.
USUALLY MOBILE IS A ZERO SUM GAME POKEMON GO WAS DIFFERENT
AVERAGE HRS CHINESE SPEND PER MONTH USING MOBILE APPS
WECHAT IS USED TO SCAN QR CODES MORE THAN 80 MILLION TIMES PER DAY
“THE ENTRY POINT FOR DESKTOP INTERNET IS THE SEARCH BAR, THE ENTRY POINT FOR THE MOBILE INTERNET IS THE QR CODE.” QUOTE ALLEN ZHANG QR CODES
WECHAT CONNECTING EVERYTHING & EVERYONE
OFFLINE SCENARIOS, FEW CASES OF PROVIDING A TRUE VALUE ADD TO BRANDS YET, WATCH FOR NEW FEATURES AND APIS TO OPEN UP
WECHAT NEW FEATURES. VIDEO + LIVESTREAM!?
“WECHAT TEAM MAINTAIN A VERY RESTRAINED ATTITUDE WHEN DOING THINGS.” TONY ZHANG QUOTE WECHAT
WECHAT OFFICIAL PARTNERS ECOSYSTEM
RECENT NEW FEATURES EXAMPLE 1: VIDEO NOW PLAYS DIRECT WITHIN WECHAT. (AS OF LATE 2016). EXAMPLE 2: MP3 MUSIC PLAYS DIRECT WITHIN WECHAT.
EXAMPLE 3: PICTURE EDITING DIRECT WITHIN WECHAT. (AS OF DEC 2016). EXAMPLE 4: VIDEO EDITING DIRECT WITHIN WECHAT. (AS OF DEC 2016)
“THE MOBILE SHORT VIDEO SECTOR SAW EXPLOSIVE GROWTH IN 2016.” QUOTE TRACEY XIANG
WEIBO ECOSYSTEM. LIVE STREAM, SHORT VIDEO, E-COMMERCE
WEIBO, THE CHINESE TWITTER, IS BIGGER THAN TWITTER?!
“SOONER OR LATER WE’LL SEE CHANGES THAT WILL MAKE IT EASIER FOR PUBLISHERS TO POST VIDEO DIRECT TO A PERSON’S (NEWS) FEED. THIS WILL BE A GAME CHANGER FOR BRANDS IN TERMS OF THE CREATIVE OPPORTUNITY.” QUOTE – JEREMY WEBB
RUMORS: WECHAT LIVE STREAM? ARGUMENT FOR: THE BUSINESS MODEL IS FANTASTIC. ARGUMENT AGAINST: MISMATCH WITH WECHAT PRODUCT VALUES.
IMPROVEMENTS TO WECHAT SEARCH IN 2016. CORE SEARCH, FRIEND’S NEWS FEED SEARCH, GROUP CHAT SEARCH BY DATE, SOCIALLY RANKED ARTICLE SEARCH
SEARCH RESULTS FROM OUTSIDE WECHAT NOW APPEARING
SHORT VIDEO – PROBABLY YES. LIVESTREAM – PROBABLY NO. BETTER SEARCH – YES
THE 2ND UNIMAGINABLE TREND: CHINA’S PAYING FOR KNOWLEDGE?!
“THE MOBILE MARKET IS SATURATED. WHEN ALL THE PRODUCTS ARE MATURE AND ALL SIMILAR, CONTENT IS THE WAY TO DIFFERENTIATE. THE VALUE OF KNOWLEDGE, THE VALUE OF CONTENT IS NOW INCREASING RAPIDLY IN THE INDUSTRY.” RHEA LIU – ANALYST AT TENCENT
ATTITUDES TO PAYING FOR ONLINE LEARNING
“WAIT FOR WECHAT PAY TO READ FEATURE (TO ARRIVE).” – QUOTE PONY MA
DRIVING FACTORS: CHINESE CONSUMERS NOW HAVE HIGHER INCOME (TIME > MONEY) UBIQUITOUS MOBILE PAYMENTS & MICRO-PAYMENTS. HUGE POPULATION: THINGS SCALE EASIER / NICHE COMMUNITIES BECOME INTERESTING. CULTURE THAT PLACES VERY HIGH VALUE IN EDUCATION
CASE STUDIES: DIFFERENT REVENUE MODELS
VOLUTARY DONATIONS (TIP JAR FEATURE) USERS REWARD HIGH QUALITY CONTENT CREATORS INDIVIDUAL PAYMENTS FROM 1 TO 200 RMB USUALLY ONLY SUBSTANTIAL FOR LARGE KEY OPINION LEADERS
PAID Q&A: FENDA (ONE MINUTE ANSWER) QUORA WITH AUDIO MOBILE MICROPAYMENTS
BUSINESS MODEL: MAKE MONEY ASKING QUESTIONS TO CELEBRITIES. 5,000 PEOPLE PAY 1 RMB TO LISTEN PLATFORM TAKES 10% CUT. CELEBRITY ANSWERING RECEIVES 45%. QUESTION ASKER RECEIVES 45%. INITIAL COST TO ASK THE QUESTION. QUESTION ASKER’S PROFIT
SUBSCRIPTION: OPEN LANGUAGE. PODCAST AUDIO CONTENT EXERCISES, VOCABULARY, GRAMMAR EXPLANATIONS TO MATCH
MATCHING SERVICE: YOLI. UBER FOR LEARNING ENGLISH. SHORT 15 MIN CLASSES. LEVERAGE WECHAT GROUPS
GATED COMMUNITY: JASON NG 阿禅. PRIVATE GROUP APP 小密圈 200 RMB ENTRY (28 EUROS) LIFETIME MEMBERSHIP.
CHINA IS CHANGING…
TENCENT PROTECTION OF INTELLECTUAL PROPERTY PLATFORM
THIS PRESENTATION IS ADAPTED FROM A KEYNOTE SPEECH DELIVERED AT CHINA CONNECT CONFERENCE IN PARIS ON MARCH 2ND 2017
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...
