WECHAT FOR MARKETERS

WeChat – China’s Largest Social Network

Yesterday, the operator of the WeChat messaging app, Tencent overtook its rival Alibaba to become China’s most valuable tech firm. WeChat is worth $249bn compared with $246bn for Alibaba. The internet giant’s profits rose by 47% to 10.9bn yuan ($1.6bn; £1.2bn) in Q2 2016. Out of China’s three internet giants (Alibaba, Tencent and Baidu), the online gaming and social media company Tencent is now the biggest, but still least known in the West. Many marketers outside of China view WeChat as nothing more than China’s answer to WhatsApp or Facebook. Another costly misperception marketers often make is that WeChat is a platform only companies operating in China need worry about. This article aims to provide a better understanding of WeChat, and how marketers can enhance their global branding and mobile commerce efforts both in China and overseas using WeChat.

Tencent Holdings launched China WeChat in 2011. At the time, Tencent already owned the country’s leading PC-based messaging service, QQ. WeChat was launched rather strategically to cater to China’s explosive growth in mobile usage and infrastructure. Just five years later, WeChat has an enormous, committed audience. In March 2016, Tencent reported that WeChat had surpassed 760 million monthly active users (MAUs) worldwide, an increase of 39% year over year.

Understanding WeChat’s Ecosystem

I first discovered WeChat in 2015, when I was traveling in China as part of the NUS MBA’s Global Immersion Program. WeChat’s popularity in China was evident, everyone used the app and its multitudes of features. WeChat is an ecosystem of apps that provides wide-ranging utility to its users. Typically most smartphone users have separate apps for social media, messaging, banking, travel, ride-sharing etc. However, WeChat users in China use just one app for ALL of those functions. WeChat gives access to a whopping 12 million light apps to its users. Companies can set up different types of apps—known as subscription accounts, service accounts or enterprise accounts—to communicate with WeChat users, sell products, manage customer relationships, offer promotions and discounts and more. Additionally, WeChat has a built-in mobile payment platform, WePay, that links a user’s bank or credit card to all 12 million apps in WeChat’s ecosystem, so users can seamlessly purchase services and products through the app with one click. More than 200 million people were using WeChat for payments at the beginning of this year, according to Demystify Asia, and more than 300,000 offline stores accepted WeChat payments as of February 2016.

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How can your brand leverage WeChat’s power?

While the WeChat ecosystem presents unlimited possibilities, its complexity and nuances can also be daunting for marketers. Like most social media platforms, the first step to succeeding on WeChat is to develop a group of followers. Brands can begin with advertising on WeChat’s Moments, a newsfeed similar to Facebook’s. Brands can also go an extra step to connect with WeChat users by placing WeChat’s iconic QR codes on products, posters, in print and out-of-home ads. Incentivizing users through promotions and discounts is also possible to attract followers.  For instance, international clothing retailer Uniqlo created an augmented reality app that allowed customers who tried on outfits in front of store mirrors to place photos of themselves against various backgrounds, such as downtown Tokyo or London. The photos were uploaded to WeChat where they could be shared with friends. The campaign created a 150% increase in WeChat followers over six months and boosted sales via WeChat by 30%, according to Jalin Wu, Uniqlo’s CMO for Greater China.

Building Connections on WeChat

My recommendation to marketers would be to approach WeChat as a content marketing and CRM platform. While the first step is to build a healthy follower base, the most crucial next step would be to engage the audience through innovative and engaging stories. Local brands may have an edge when it comes to nuancing in storytelling and maximizing on current topics in the Chinese pop culture, even international brands create interesting experiences for their WeChat audiences. Let’s look at the case study of beauty brand L’Oréal, one of the most active brands on the platform. L’Oréal successfully identified an influencer on the platform, actress Fan Bingbing to create engaging content for their followers on WeChat. Consumers who followed L’Oréal’s account last year found updates from the red carpet at the Cannes Film Festival delivered to their Moments feed as if the star were their own friend. L’Oréal doubled its WeChat fan base and engagement in 15 days, according to business intelligence firm L2. Another relevant case study has been from KLM Royal Dutch Airlines. It developed specialized CRM tools on its WeChat account early on to engage customers with 24-hour customer service, mainly to position itself as the gateway to Europe for travelers from China. Once connected, these users can interact with KLM directly and expect a response within an hour, according to the airline’s website. Another interesting case study is Burberry, the only truly successful luxury brand in China. Burberry combined their international appeal with local sensibilities to create an evoking content marketing strategy for WeChat (see video for more).

The Power of WeChat Beyond China

The influence of WeChat is not limited to China. While the vast majority of WeChat users reside in China, there are growing user bases in India, Southeast Asia, Latin America and a smattering of other places. The key to using WeChat around the world, however, is focusing on international travelers and expatriates from China—an attractive target for businesses like luxury brands, shopping centers, hotels, restaurants and private transport services abroad. After all, tourists from China ranked first in the world for overseas spending in 2015, shelling out $292 billion, a 25% year-over-year increase, according to the United Nations’ World Tourism Organization (UNWTO), and the number of those travelers grew 10% to 128 million. However, the challenge for global companies is getting different departments—such as public relations, digital, marketing and fulfillment—to work together at the global and regional level, and both inside and outside of China, to create a coherent strategy that is both global and local and reflects the needs of consumers from China.

Sources:

  1. Tencent overtakes Alibaba as China’s biggest tech company, BBC News, August 18, 2016 http://www.bbc.com/news/business-37114284
  1. WeChat is China’s Most Popular Chat App, eMarketer, June 9, 2016 http://www.emarketer.com/Article/WeChat-Chinas-Most-Popular-Chat-App/1014057
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