At a glance
By Mathew Scott
Society sometimes bends to the collective will enforced by a sheer weight of numbers.
It’s a phenomenon China has been experiencing over the past seven years, as the WeChat mobile social media platform has overhauled the way an estimated one billion users run their professional and private lives. Shanghai-based Cissy Long says the only way she could keep up with her friends – all of them – was to join WeChat. It’s a story you hear time and time again in these parts.
“By 2012, everyone I knew had started using WeChat,” says Long. She’s not exaggerating. The penetration of this super app is that deep.
When WeChat, or Weixin as it’s known locally in China, was launched in 2011 by the Tencent conglomerate, based in the southern Chinese city of Shenzhen, Long was curious, like many in the country. Working in professional communications, she was still sizing up how the rapid growth of digital and mobile technology might affect her business dealings.
However, Long abandoned any further research when she realised how quickly WeChat’s reach had grown.
The most commonly used description for the platform – in the West, at least – is that it is China’s version of Facebook and/or Twitter, but that tells less than half the story. While its focus was initially on Twitter-style instant messaging, WeChat is now a fully-fledged ecosystem that offers users a range of functions.
WeChat is a digital wallet, and you can make in-store payments for goods and services, or top up a mobile phone account; some companies also let you order via WeChat. WeChat then lets you track those deliveries. WeChat lets you scan a bar code in-store and find out if something is cheaper online.
Or, if you’re dining with friends, WeChat’s Go Dutch bill-splitter function lets you work out your share, then transfer it to the bill payer. WeChat even lets you reserve the table or order food. You can use WeChat’s fitness tracker to count your steps and see how you compare with friends. Then, there are the games. Lots of games.
Tencent began life in 1998 looking to expand China’s interests in the internet and communications market, through the online messaging service QQ. It developed smartphone services, web portals, payment services, online games and film. Today, it’s one of Asia’s most valuable companies, worth an estimated US$580 billion in January 2018, and WeChat is its star attraction.
As Tencent has grown over the past few years, WeChat has been able to reach into and expand all aspects of the parent business.
“The most common function used is Payment,” Long explains. “You can easily scan your QR code to pay, instantly. Literally every single store in China accepts WeChat Pay.
“Another common function is Transfer. When we have a team lunch together, someone pays the whole bill, then sends a bill request to Group Chat and collects the money through transfers from the others, instantly. There’s no need for cash.”
Long is the communications officer at One Championship, a Singapore-based sports media company. Her role requires her to distribute news and business announcements daily across China. WeChat has revolutionised the way she works.
“I used to call the media directly to pitch to them, but now I will add the person on WeChat and say hello first to avoid embarrassing situations,” says Long.
“Chinese are still not used to email, they prefer to use the WeChat Group Chat to discuss work, to video-conference call and transfer files. Actually, I use the WeChat message function more for business. I usually interact with my friends or family on the WeChat Moments function. It has changed the way I do everything.”
The new normal
Much of China feels the same way. WeChat’s reach has expanded into all walks of life. The effect has been that while you certainly can do business and socialise in China without WeChat, using the platform gives you direct and instant access to everyone.
“It would now be very difficult to live in China and be a normal functioning member of society without having a WeChat account,” says analyst and WeChat specialist Matthew Brennan.
“The a-ha moment for me was about four years ago when I used WeChat Pay in a convenience store for the very first time. I realised then that it was really cool, it was really convenient, and it was going to change the whole of China – and it has. I realised it was not just messaging, it had a much, much greater ambition, and that’s the way it has played out.”
Brennan’s Beijing-based China Channel company charts trends and developments on the platform, while also offering training sessions for businesses that want to learn what WeChat is all about. There is one thing he always tells people during a training session.
“The first thing I say is ‘don’t think of WeChat as social media. Think of it as an operating system for your life in China’,” says Brennan.
“In China, we went from nothing to mobile payment. There have been credit cards but they have never been used in the same manner as they have in Europe or America. That habit of reaching for plastic whenever you have to pay for something, like the Americans do, was never ingrained in the Chinese.”
These days, the Chinese daily press comes full of tales of small isolated villages where people are quickly dispensing with their traditional means of doing business – and WeChat is the leading alternative.
By the end of 2017, 47.1 per cent of China’s rural community was using mobile payment services such as WeChat Pay or its rival, Alipay. Close to eight million people in this community had signed up for such services across the past year alone, according to data from the government-run China Internet Network Information Center.
“People across China, especially outside of Beijing and Shanghai, do not use email that much,” says Brennan. “The further you go into inland China, the less likely it is someone will use email or respond to email, even in a business context. People use messaging for business purposes and the speed of communication, the speed of business, is that much faster. On WeChat you expect someone to reply within an hour or even half an hour.”
Visitors to China can often be seen raising an eyebrow when passing someone on the street dictating into their mobile device – and it’s a common sight across the country, thanks to super-convenient voice functions.
“The voice messaging was a big break. You don’t need to type, you can use it as a walkie-talkie, and mainland Chinese are very comfortable doing that,” says Brennan. “There’s no stigma to doing that and it opens up a whole market of less educated people, or people less comfortable with using the smaller keypad on a mobile phone.”
It’s the way people like to do things
Peter Guy is a financial writer and former banker based in Hong Kong. He has gone from a career in investment banking to become one of the city’s leading China watchers. Guy has written extensively about the rise of both Tencent and WeChat – and about what these developments all mean.
“WeChat has enabled Tencent to have this incredible reach and connection with the Chinese market,” says Guy. “WeChat has simply tapped in to the way the Chinese market likes to do things, in a business sense and socially.”
An example of how WeChat is quickly able to reach into traditional ways of life in China was evident this past Chinese New Year, which fell on Friday 16 February. Traditionally, lucky red lai see packets of cash are passed around at this time – historically to children or younger unmarried relatives, but more so these days to everyone who might have helped you over the past 12 months as an offer of good wishes for the year ahead.
It’s a massive movement of cash, given China’s population has passed the 1.4 billion mark, and countless cash-teller machines run out of the smaller bills usually stuffed inside the packets.
However, since 2014, WeChat has offered a Red Packet function, removing the need for paper and cash. A January 2018 survey by Lightspeed Research found that 80 per cent of survey respondents in mainland China would use WeChat’s digital Red Packet service, compared with 69 per cent who would use traditional physical red packets (obviously a number of people are happy to do both).
“There’s even a function that teaches Chinese people how to create a CV for applications for Western companies,” says Guy. “[WeChat is] developing functions that take away the need to go into the classroom. Basically, your education experience, as well as your entertainment, can revolve around WeChat.”
A big part of that entertainment is WeChat’s games. Online video gaming, or eSports, is predicted by research group Newzoo to be worth US$906 million globally by the end of 2018.
WeChat offers an online gaming option that leads to the likes of Honor of Kings – one of the world’s most popular mobile games. It also feeds a Chinese eSport online video gaming population estimated at 560 million people, or almost 70 per cent of China’s online community of more than 770 million. Being able to access that market directly has helped Tencent become one of the world’s leading developers of online games.
“Most people in China can’t afford a PC; they use mobile phones as their computers,” says Guy, “so you have access to these games and to business opportunities. WeChat also provides a huge entrepreneurial platform.
“Instead of worrying about bandwidth and servers, you’ve already got an entire platform provided. It’s very advanced. In terms of hardware, you have this proliferation of mobile phones in China, and the markets that come with that. People in China now look to their phones for everything.”
Given the extensive use of WeChat in business, how secure is it? Both Brennan and Guy share the view that WeChat has its security issues, just like any other service.
“Sending any kind of message on any platform on any mobile phone, whether it has encryption or not, will have an inherent risk,” says Brennan. “If you are sending sensitive financial information or HR information, I would not suggest using a messaging app to do that, no matter what app it is.”
Until now, WeChat has only made a slight impact in international markets. Long says when she travels outside China, she can only really use WeChat’s messaging function. However, with China’s One Belt, One Road Initiative spreading the nation’s interests, and the growing number of outbound Chinese tourists wanting to use WeChat overseas, WeChat is increasingly seen as the avenue through which the world can connect with China.
“It’s the classic example of a super app,” says Brennan. “You can use WeChat to do almost anything you want. Almost every business has some kind of presence on WeChat.”
WeChat by the numbers
- 902 million users daily
- 806 million monthly users for WeChat Pay
- 25 countries with WeChat Pay participating merchants
- 205 million connected calls every day
- 68 million videos posted every day
- 50 million active senior users
- 38 billion messages sent every day
- 6.1 billion voice messages sent every day
Sources: 2017 WeChat Data Report; https://financefeeds.com; https://technode.com