WeChat has become the Swiss Army knife of the socio-digital world in China, says James Hayle, MEC Social Insight Executive
The Great Firewall of China, the Chinese government's censorship project, blocks many popular western sites and services such as Facebook, Google, Twitter and Instagram. In effect, this closes off and isolates an enormous part of the Chinese market from the socio-digital western world. This has enabled a number of hugely popular home-grown state-driven services to emerge, the most prominent of which is WeChat.
Since its release in 2011, WeChat has generated a strong and steady following. As of December 2015 it recorded 650 million active accounts, 15% outside of China (WhatsApp has 900 million). Although largely recognised as an instant messaging/social media hybrid, users are able to do so much more. Services include, but are not limited to: booking taxis, flights, a table at a restaurant and cinema tickets, as well as paying utility bills, storing savings in a monetary fund, borrowing money (up to RMB 200,000), shopping in app and tracking fitness. This multi-functionality has seen the average number of apps used in China go from six in 2013 to just two by 2016, primarily WeChat and Weibo.
The app is built on the premise that shopping is social, and certain brands have long been taking full advantage of this. The luxury fashion retailer Burberry has had a longstanding partnership with the platform and has been using it as one of its key customer loyalty drivers in China for a number of years. A successful campaign at the ‘London to Shanghai' event allowed people to engage with a fashion show like never before. People who followed the brand were able to create personalised pieces on the catwalk, gain unique insights into the outfits, and view the show in 360 degrees. Burberry effectively leveraged WeChat's vast functionalities, built on an entirely social foundation. Therefore, brands like these have increasingly relied on their WeChat account rather than a standalone website – the functionality and the friendship is already in place, allowing a more convenient and streamlined experience, bypassing the ‘extra-click' barrier.
The most significant impact of social commerce comes from WeChat's own campaign, Red Envelopes. To welcome in the Year of the Monkey, users were able to send friends and family virtual envelopes with money sealed inside. The campaign has been running since January 2014 but this year especially it was a huge success. 2016 has seen an eight-fold increase on last year's transactions, and they now stand at over 8 billion. That is over 2 billion more red envelopes sent than the total number of transactions completed on PayPal in 2015. The most popular amount given was a lucky number: RMB 8.88, equivalent to about £0.97.
The average amount sent was lower than what is normally sent in the physical form and also a lot lower than the average PayPal transaction, but it is the volume, velocity and more importantly intrinsic personal value that made these envelopes truly meaningful. Users were not just sending a prosaic, meaningless donation; these held a sense of significance and virtue that users were unable to obtain from any other digital medium. The ability to send small amounts enabled individuals to prolong the fun, reciprocating actions to more than just a few important relationships such as family members and close friends. It was possible to spread the generosity amongst a wider community. The impact of this is that not only did it encourage many more people to link up their debit and credit cards to the service, allowing them to make future transactions on the platform with greater ease, it also tapped into a strong heritage and traditions that have been celebrated in China for thousands of years.
WeChat's success will no doubt be difficult to replicate outside of China, but plans are in place to tap into the growing demand in sub-Saharan Africa. Crucially, they have bypassed the desktop, PC and laptop stage in Africa, migrating straight onto mobile devices. SMS messaging is still relatively high, making it a prime location for WeChat's native internet service.
So what does this all mean for UK and US markets?
It is highly unlikely that WeChat could seriously rival social giants such as Facebook, WhatsApp and Twitter, especially here in the socially saturated West where these platforms are already well established. However, these platforms have taken notice. WhatsApp recently scrapped its 99p subscription, instead making businesses pay to connect with users. Twitter has made it possible for individuals to communicate directly with brands and vice versa, while Snapchat has invested heavily in shopping. Facebook Messenger is now being used by businesses as a customer service tool. These changes have made it possible for brands not just to present themselves in the social space but to be conversationalists within current social parameters.
These platforms have already begun to look towards Asian markets to identify trends in their own industry. Our Asian social media counterparts are well ahead of the curve, and in the middle kingdom social media is still king.