There’s no need to introduce what WeChat, or Weixin in Chinese, is or explain how it became one of the biggest things in 2013 in China’s tech scene, or China in general.
WeChat now has more than 600 million registered accounts, with more than 100 million overseas and 271.9 million monthly active users in Q3 2013.
WeChat is Everything, on Mobile.
Two major updates, WeChat 5.0 and 5.1, were released in the past year. Here are what users or businesses couldn’t do with WeChat before 2013 — many are only available with the Chinese version though.
- Make payments, with your bank accounts bundled to WeChat Payment, for phone bills, digital lottery tickets, shopping on Tencent’s online retailer Yixun, or purchases at a Ubox vending machine or Haidilao, the most famous hotpot chain restaurant in China.
- Build sophisticated features with APIs and speech recognition SDK for Official WeChat Accounts — just like building webapps. Thus businesses can use WeChat as a CRM tool or do businesses directly within WeChat, such as taking food orders.
- Play mobile games. There have been nine titles.
- Scan the code on a good or the cover of a book/CD/movie poster and make purchases on Yixun, Amazon or other partner online retailers.
- Locate where you are and see the street view around you.
- Download free or paid emoticons from the sticker shop.
- Speech-to-text conversion (only Mandarin is available).
- Scan an English word and get the translation in Chinese.
- If you buy a custom SIM card, jointly launched by telco China Unicom, a 10-yuan (less than $2) monthly subscription covers all data consumed by WeChat.
Monetizing A Mobile Messaging App Seems not so Hard.
In 2013 China market found it much easier to make money from mobile gaming than expected. WeChat must agree. Apart from gaming, WeChat, like LINE, makes revenues from sticker sales.
At the same time of making money for itself, WeChat is figuring ways to have third parties on the platform generate revenues — revenue-sharing is just a matter of time.
Mobile gaming is, of course, included. Two of the nine games on WeChat are from third parties — one is Plants vs. Zombie 2 and the other is by a local game developer.
WeChat opened up the sticker shop to outside designers, promising to share revenues with them.
A Chinese actor and an online literature writer rolled out paid subscriptions to their audiences. Paying fans of the actor will receive voice messages, pictures, or songs by him, or chances of one-on-one interaction with him; paying readers of the writer can access his works or participant in online forums for subscribers only. It is reported the both were supported by WeChat, for the latter wanted to see whether such a model works — one thing to prove it is that WeChat Payment wasn’t available to everyone when the two could accept payments with it. Both cases were massively successful.
Smart third-party agents, who always know how to leverage traffic and attention, are running their own businesses on WeChat, too. There are app development companies for developing Official Account webapps for customers like the aforementioned writer, digital marketing agencies, and so on.
Tencent’s own online-to-offline service division Micro-life is also leveraging WeChat. It has moved a large number of offline merchants on its own platform to WeChat, offering membership cards or gift cards through Official WeChat accounts. Micro-life has managed to have a department store chain get its merchants on board.
Competitor to Everyone
Unfortunately, Taobao/Tmall retailers didn’t benefit from WeChat for long, as links from Alibaba properties have been disabled and webpages of items cannot be loaded within WeChat — Alibaba feels under threat.
Not only did Alibaba feel threat in e-commerce but also in mobile payments and else where — since WeChat now is everything. That the company relaunched Laiwang, a mobile messaging app, shows its feelings.
Alibaba isn’t alone when it comes to feeling pressured or eyeing the potential in mobile messaging. Veteran tech company Netease joined the competition with EasyChat, partnering with carrier China Telecom, and offer services other players otherwise cannot do without backing from a carrier. Sina is also equipped with one, WeMeet, by investing in a local developer.
Those services may distract WeChat, but currently no one believes anyone can grow to become a real threat in mobile messaging to it.
But WeChat, on the other hand, has become a competitor to everyone. Look Alibaba.
For WeChat, the best way must be having all the businesses, competitors or not, on its platform, helping them make money and then taking revenue splits. There never was such an all-in-one platform in China’s Internet world before. We’ll see whether WeChat can make this far.
Tencent is Saved?
Sometimes I cannot help thinking whether WeChat could be so powerful if it wasn’t backed by Tencent who has a huge user base and years of experience in developing online communication service, or look so promising if there wasn’t LINE who has been pioneering in monetizing a mobile messaging app. Or, it is WeChat that saved Tencent.
Tencent turned 15 in November 2013. Before WeChat took off, its virtual item subscription business decelerated as almost every potential subscriber in China had signed up to it. A majority of its total revenues was still from a few licensed online games. WeChat was launched in January 2011. Tencent’s stock price saw a big decline in the second half of the year.
Mobile was the concern with almost every Chinese Internet company then. Users were moving to mobile, but monetizing traffic or users on mobile and mobile payments were what to be figured out.
At the same time, as Tencent had had almost every Chinese using its QQ IM, international expansion was the natural next goal. Apart from promoting WeChat in Southeast countries, the company has been investing in gaming and social -related companies outside China.
Now Tencent’s stock price is more than three times of the lowest in 2011. Although WeChat hasn’t generated meaningful revenues, investors believe that making money from mobile gaming and virtual sales, like what Tencent has been doing on desktop, is just a matter of time. They believe there are more monetization channels, such as mobile payment and m-commerce, where WeChat will possibly stand out from the crowd.
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