Warc Blog

Chinese apps look to monetise

19 June 2013
BEIJING: WeChat, the free smartphone application from Tencent Holdings, the Chinese internet company, is moving into the ecommerce arena and analysts expect significant amounts of advertising on the app will follow.

WeChat has enabled several of its corporate accounts to open online shopping channels, with transactions being made via credit cards, online banking or TenPay, the holding company's third-party payment platform.

So, for example, followers of the public account of McDonald's, the restaurant chain, are able to pay three yuan ($0.49) for an afternoon tea discount coupon, with transactions completed under the WeChat framework.

Tencent founder Pony Ma told China Daily that he also planned to introduce micro-payments for services like taxis and to launch mobile social games as ways to monetise the application.

Tencent already encourages WeChat users to scan codes at stores to purchase products and enjoy discounts.

Dong Xu, an analyst at IT consultancy Analysys International, warned that WeChat should learn from the mistakes of its rivals.

"[Sina] Weibo is faced with a setback as the micro-blog service adopts rampant intrusive advertisements and wears out users' patience," he said. "This is the one pitfall WeChat should skirt."

The point was echoed by academic Doug Young, blogging in the South China Morning Post recently, when he noted that Sina needed to be careful in its "zealous campaign" to commercialise Weibo with ecommerce and video services or it would risk alienating millions of users.

He suggested then that disgruntled Weibo users could instead choose products like WeChat that focused exclusively on communication, but with that no longer an option, services like Kaixin, Renren and Line could enter the picture.

Yi Fanghan, an independent internet industry blogger, said WeChat's step "provides momentum for the change taking place within the whole industry – future payments will take place on mobile devices".

Data sourced from China Daily, South China Morning Post; additional content by Warc staff

 
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