The world of WeChat marketing is changing. For years, the super app was the alpha and omega of digital marketing in China, with more than a billion monthly active users and a whole industry’s worth of supporting services. But as user growth plateaus and other social media challenge WeChat’s lock on eyeballs, a report finds that WeChat is morphing from ad platform to a marketing Swiss Army Knife for luxury brands.
In a report issued April 9, the Digital Luxury Group (DLG) and marketing automation specialists JINGdigital wrote that WeChat is evolving from a broadcasting platform into a broader customer relationship system, even as competing apps eat into its ad share.
Along with a user growth and engagement time slowdown, WeChat saw decelerating WeChat community growth in 2019. The growth rate of luxury brands that have over 100,000 followers on their WeChat official accounts slid to 18% in the first half of 2019 from 38% for the same period last year, according to the DLG and JINGDigital report. Those with less than 100,000 followers saw an even steeper slide to 6% in the reporting period from 31% a year ago.
Meanwhile, users are spending more time on short video and livestreaming, helping apps that lead in these formats emerge as the profitable new forms of marketing. Top luxury brands are trying to leverage the new models, marked by Louis Vuitton’s launch of livestreaming sessions on Xiaohongshu. Livestreaming is gaining popularity with the rise of content-driven e-commerce trends, although the format typically features a less premium shopping experience, akin to a traditional TV infomercial.
The shift in user attention to short video and livestreaming is reflected in the migration of ad budgets from brands, a major source of revenue for tech firms. ByteDance, the creator of Douyin, TikTok and news aggregation app Toutiao, has eroded ad revenue share from older tech peers Tencent, Baidu, and Alibaba.
Back on WeChat, brands are adjusting marketing strategies to focus on what the platform is best at. In addition to moving to a full-service model, they’re also shifting to a more focused, closer relationship with customers through WeChat.
Breadth to depth
“I don’t think WeChat official accounts are losing their attraction for users,” said Kai, chairman and partner of JINGdigital at a marketing webinar held on April 9. “There’s over 10 million official accounts as of last year, a slower growth is expected simply because the base is already very large,” he said.
At the same time, brand marketers are developing a more nuanced view of what WeChat official accounts are good for, Kai said. Until two to three years ago, the number of followers was the most important metric for measuring the success of WeChat accounts. The indicators later evolved to include unfollow rates, and the most recent center of focus has become material business impact—sales boost or conversion rates, he said.
“WeChat has slowly moved from being merely an information outlet towards a full service platform. It’s a pool the brands are trying to channel all their customers into,” said Kai.
Pablo Mauron, Partner & Managing Director China at DLG said that customers are moving from broad to deep brand engagement. “If my expectation towards WeChat is to have daily content that entertains me then I may pay attention to a broad number of brands. As my expectation for WeChat evolves to be a platform to speak with customer services, to buy your products, to make an appointment, my list of fifty brands that I found interesting probably shrinks to five. That does not mean they are less interesting—just that my expectations have changed,” he said.
Luxury or not, brands are embracing e-commerce to maintain business during the global epidemic.
Even though the situation is getting better in China, traffic and sales at offline shops haven’t totally recovered. Mauron said that brands are trying to reawaken dormant customers as much as reach new ones. “Most of the brands that expect revenue to pick up in China focused on CRM and re-engaging with clients, rather than just picking up where they have left before and focusing on acquisition,” he said.
Kai shared one interesting observation from a high-end fashion brand during the outbreak. Among the rising online transaction volume, those that come through tractional centralized channels like Tmall came down, but transaction volume being triggered by those client advisers through WeChat, the mini programs for example, are a lot higher as the private traffic on WeChat. “The brands still need to recruit new followers to enrich the funnel of potential customers… and monetizing through WeChat services is the close loop effort,” Kai said.
As growth slows down, luxury brands are posting content more often to public accounts. WeChat service accounts, favored by marketers, are allowed to push articles into followers’ inbox four times a month. More brands have hit this limit in recent months.
DLG and JINGdigital report shows that 67.52% of luxury brands on WeChat are using all four pushes per month, up from merely 17% in last year.
Brands surveyed are changing how they use their pushes, with single-article pushes taking the lead over multiple. Over 78.32% of the brands surveyed choose to release a single article with each push, up from 42% last year. While cumulative engagement of multiple-article pushes is usually higher than single-article pushes, it comes at a cost in content production.
Thursday and Friday evening saw the most pushes but Mauron warns that A/B Testing is still the most reliable method to determine appropriate timelot for WeChat pushes.