What is WeChat Pay?
WeChat, China’s biggest social media platform, owes much of its success to its payment feature. WeChat Pay is now so popular and widely used in China (over 200 million bank cards are linked to a WeChat Wallet) that cash is virtually redundant in most cities. Almost all vendors, even local fruit sellers, now accept these methods. At the end of 2016, over 300,000 offline retail companies accommodated WeChat payments.
In comparison, ApplePay, the most popular mobile wallet in the West, has ‘tens of millions’ of users (Apple haven’t released exact figures), and is reported to have grown around 500% in 2016. By this metric, it is a long way behind WeChat, however, it can be used at any retail outlet with a contactless card machine and is becoming increasingly supported online so its rapid growth is likely to continue.
In addition to wallet-less payments, a host of other features are offered through the app, including booking and paying for taxis, hiring bicycles, buying cinema, travel or event tickets. You can even order Starbucks directly through the app.
This is only in China, though. Tencent’s efforts to expand into other markets have thus far not had anything like their domestic success. This has seen them adopt a different approach, focussing on their core Chinese market. They have begun to roll out WeChat Pay across the Europe. Italy was first in 2015 and next, it is the UK, launching in May with France and Germany next on the list.
Who will it benefit?
1. Sports Organisations and Retailers
Possibly the sector with the most to gain, most obviously through both on- and offline merchandise sales. Integrating WeChat pay will give fans a more familiar and far easier method of payment which will encourage them to buy and even visit stores when travelling.
eCommerce: It will also bring organisations without China-specific online stores closer to the Chinese consumer, putting the products where the fans prefer to look. In 2016, users regularly shopping online through WeChat doubled to reach 31% and users that have purchased goods through the app 89% of the 846 million monthly users.
Additionally, for companies without a China presence, launching only on WeChat negates the need for a Chinese business license, opening the door for smaller companies to being selling in the world’s most populous market.
More Than Just Payments: Adoption of WeChat’s additional features, such as the vastly popular Red Packet function, which allows voucher sharing will also prove extremely popular. Over the 2017 Chinese New Year, more than 46 billion ‘Hongbao’ were sent via WeChat.
WeChat’s ticketing platform could also prove a massive development. Being able to find and buy tickets on WeChat, particularly in a different country, adds yet further familiarity and will absolutely see more fans attend games and events.
2. Chinese Consumers
This release is not aimed at gaining new Western users, it is entirely focussed on the existing, Chinese users, particularly those travelling or studying abroad. Given WeChat’s relatively short lifespan, it was launched in 2011, many Chinese expats will not have adopted WeChat into their everyday life in the same way that those in China have.
The major battle for Tencent is likely to be getting stores to accommodate the technology so that it becomes a worthwhile and usable feature across Europe.
Although aimed at Chinese users, there can be little doubt that Tencent has an eye on European expansion. WeChat’s advantage over its potential competitors, primarily WhatsApp and Facebook Messenger, is its massive array of features. Of these, WeChat Pay is the most important and, as such, its functionality in Europe is paramount if Tencent and WeChat are to crack this market.
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