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New Channel, New Customers: Why U.S. Brands Should Care About WeChat

Mark Enochs
Mark Enochs , Marketing Copywriter

Although relatively unknown in the U.S., China’s WeChat platform has exploded in popularity in the Asia-Pacific region. Created in 2011 as an equivalent of Facebook’s WhatsApp, WeChat quickly caught on. In its first year, the messaging platform drew in 4 million users, quickly making WeChat synonymous with the smartphone in China.

Today, the user base has expanded 10% YoY to 1 billion who send 38 billion messages every day through the platform. WeChat has evolved into something much more than a messaging app though. Known as the “app for everything,” WeChat is an integral part of everyday life in China. Worldwide, WeChat is the fifth most-used network, but throughout the Asian Pacific Rim, users spend more time on WeChat than Facebook, Twitter, Instagram, and Snapchat put together.

Like elsewhere in the world, mobile keeps growing in China. This year, it’s expected that 84.5% of all mobile messaging app users will be on the WeChat platform. An estimated 494 million customers will use WeChat’s Mobile app at least once a month in 2019. Accordingly, daily user growth is expected to increase 24% YoY, and time spent on the app will rise 39%.

Here we’ll cover how customers use this powerful platform and how U.S. brands can make WeChat a part of their daily operations to interact directly with customers.

An Accounting of Accounts

Similar to Facebook, WeChat users can choose to follow a particular account, and when they follow a brand’s account, this becomes an effective marketing tool and a great way for brands to engage with new customers.

However, unlike U.S. social media platforms, WeChat accounts are governed more strictly and come in a few flavors. Most accounts are official accounts with both domestic and international versions. A brand who opens their own WeChat account has two options for communicating with potential customers.

Subscription Account

WeChat subscription accounts allow brands to send one push message per day to followers. These push messages are then grouped together in a dedicated folder that appears alongside a user’s friends in the chat section of WeChat. Here are more subscription account details:

  • Good for content-centric consumer engagement
  • Limited features but widest reach for content
  • Best when publishing more than four push messages a month
  • Daily push notifications
  • Original content can be certified and shared with other accounts citing the original publisher.
  • Revenue from display ads in articles
  • Revenue from reader tips where users can send a monetary donation, like a tip, to the publisher of content they like. It’s like connecting a bank account to a Like button.
  • Content is searchable on the Chinese search engine Sogou.

Service Account

WeChat service account messages also appear in the chat pane, but these accounts only allow four push messages a month. Service account details:

  • Full customer experience, best for post-sale engagement
  • Limited to four push messages a month
  • Segmentation of followers
  • QR code-tracking
  • Native e-commerce and payments
  • Coupons and loyalty programs
  • Connection to customer service chat
  • Ads within WeChat
  • Content is not searchable on Sogou

WeChat User Fast Facts

Over 85% of WeChat users are 18-35 years old, a far more digitally oriented generation than previous ones.

  • Under 18: 2%
  • 18-25: 45.4%
  • 26-35: 40.8%
  • 36-50: 9.5%

This younger generation has flocked to WeChat, making the app an integral part of daily life:

  • 60% of users open the app 10 times a day.
  • 21% open the app more than 50 times a day.
  • 17% spend 4+ hours a day in the app.

What Users Can Do with WeChat

Being a robust all-in-one platform, WeChat offers something to users on every level, from instant messaging and mobile payment to making doctor appointments and filing police reports. When the parent company, Tencent, opened up WeChat to external developers, they created a booming market for applications (commonly referred to as mini programs), which customers have responded to in very big ways.

Here are the most common things that WeChat users can do from their phones.

Instant Messaging

The initial role of WeChat was to provide the Chinese with something like Facebook’s free WhatsApp Messenger, a very popular service that offers cross-platform text messaging and VoIP. Chinese consumers responded, quickly making WeChat the #1 messaging app in China. Users can send text messages and video, and there is even a translation feature for non-Chinese speakers. This makes WeChat’s messaging service an easy way for brands to engage with customers and just the beginning of what the platform can offer users.

Mobile Payment

Perhaps the biggest breakthrough WeChat made is establishing the seamless payment system that runs through everything the platform does. Much like U.S. customers can with PayPal or Venmo, WeChat users can securely make payments from a smartphone or tablet. With WeChat Pay (also known as WeChat Wallet), users can pay bills online with a tap of the phone or a snap of the camera much as they would with a credit card app.

And customers don’t just pay their rent or the electric bill through WeChat; they can send and receive gifts, donate to a range of charities, and carry out any other common e-commerce transaction, including scanning QR codes. In fact, WeChat Pay’s grown in popularity so quickly that it’s directly competing against MasterCard, Visa, and American Express in the Asia-Pacific region — it’s even beaten their rival Alipay (from the e-commerce giant Alibaba) by about 150 million users, because it’s so easy to use and baked right into the platform.

Online banking is another logical application of the WeChat platform. Now that online payment is no longer an unreliable method, more and more users are paying bills, transferring funds, and carrying out other banking tasks right there in the WeChat platform.

Social Media

By granting users the ability to share videos, music, photos, and posts just like the established social networks Facebook and China’s Weibo, WeChat easily morphed into a full-blown social media platform where users can like and comment on posts and load up to nine images per post.

When the platform added the Moments feature to the interface — this is basically WeChat’s brand name for its social feed and updates from friends, family, and other WeChat contacts — growth increased, and there are no signs it will slow down.

Not only can you send text messages to your followers (and you have many privacy options for grouping contacts together and controlling who gets which Moment feed), Moments is also integrated with many other social platforms, allowing users to link to and post to Facebook and Twitter.

Mini Programs

Part of WeChat’s power is that users have no reason to seek out other platforms. You don’t have companies competing against each other to get their apps in the Apple or Android app stores as you do in the U.S. The reason is that WeChat keeps users within their platform with something called the mini program.

Launched in 2017 and named for the 4MB maximum file size, mini programs are basically WeChat-specific apps, removing the need to use apps outside of WeChat. This is incredibly effective at engaging users, but it also provides businesses with a new channel for reaching out to customers. Brands can create their own mini programs and deploy them across the WeChat platform.

By January 2018, 580,000 mini programs were available to users, many of which were transactional, giving consumers the ability to scan a Quick Response (QR) code with their mobile phone at a store counter and then pay the bill through the user’s WeChat mobile wallet.

But it’s the WeChat mini program games that have really taken off. The “Jump Jump” (“Tiao Yi Tiao”) game alone drew in 400 million players in less than three days and 100 million daily active users in just two weeks after its launch. Some brands have created their own versions of the game too.

A clothing and makeup brand’s mini program (left) and a MacDonald’s-branded Jump Jump game (right).

But the games aren’t all just play. Many offer their own chat rooms for players to connect with each other. Most games also provide recommendations for other games. According to a Tencent Q2 report comparing value-added services revenue (in billions of yuans) from 2017 to 2018, WeChat’s revenue from just the games and social networking was up 24%.

Q1-Q2 Total Value-Added Services Revenue Social Games
2017 71.9B 25.2B 46.7B
2018 88.9B 35B 53.9B
Growth +24% +39% +16%

Obviously, this is an enormous opportunity for game developers to expand their audience, but it’s also an additional revenue source for the brands positioned to advertise through the platform. A couple big ones like McDonald’s and Nike are among the first brands to advertise through WeChat, and they have created their own branded versions of “Jump Jump.” But the user gets more options as well for the apps and brands they want to interact with either by searching WeChat or by browsing other mini programs.

Search and Newsfeed

WeChat recently launched its own search engine, with the bluntly accurate name Search. When people use the engine, they will be able to see newsworthy and relevant articles from companies’ official accounts, from Moments posted by friends and family, and from other sources. The interface also displays the top 5 topics searched for.

Accommodations and Travel Booking

Whether it’s booking a hotel or a flight, users turn to WeChat when it’s time to travel. The platform is even used for bike-sharing programs and arranging local transportation much like Uber and Lyft.

It’s not just for vacations and business trips. WeChat can also help users make their daily commutes to work. Public transportation will become more efficient in processing high volumes of data, which reduces cost as well as gathers customer behavior data to better assist transportation planning. Already public transportation companies across 80 cities in China have adopted Smart Transit QR Code; others have developed their own mini programs to serve commuters.

Dining and Entertainment

WeChat has impacted every part of daily life in China, and many users order food for pickup or delivery, make dinner reservations, search for local sights and restaurants, and buy movie tickets from brands with official accounts and mini programs.

In fact, some of the big reasons that fast food chains and cafes throughout China are widely adopting WeChat is that the platform reduces labor cost, increases operational efficiency, and makes it easy to reward customers through e-coupons and loyalty programs.

What U.S. Brands Get Out of the WeChat Platform

So why should you give a fig about WeChat?

Simple. You get access to and the opportunity to engage with an enormous audience.

Remember, Facebook and Google are banned in China. However, U.S. brands can pursue an international official account to connect with potential customers.

At the very least, you get the ability to market to 1 billion customers you’d have no other way to engage. Like Facebook ads, you could easily retarget because most everything is inside the WeChat environment and you don’t have to switch channels or platforms.

The WeChat Customer Journey

When using WeChat as a marketing channel, think of its in-app capabilities and what you as a marketer can do with them. The more you know about your followers the better you can build a customer-centric experience and a closer, more intuitive relationship with customers. For example, the journey might go like this:

  • A customer decides to follow a brand’s WeChat account based on interest.
  • The customer receives personalized and relevant content, perhaps social feeds and promotions.
  • The customer makes the first purchase and receives invoice information and shipping status within the WeChat platform.
  • The brand can then keep the customer updated on his latest membership status, as well as provide special incentives.
  • The brand is able to more accurately integrate online and offline activities for a better view of the customer and higher conversion rates.
  • Based on customer data, the brand can better gauge the customer’s lifecycle status and deploy automated campaigns to address each stage. For defecting customers, a brand can set up a win-back campaign that’s triggered by a customer’s behavior.

A New Advertising and Revenue Channel

While Facebook only released a business platform version of WhatsApp in 2017, WeChat was ahead of the game with thousands of businesses throughout the Asia-Pacific region already adopting the app for a range of e-commerce operations. The brands who adopted early are already using the WeChat platform for paid promotion and have seen conversion rates go up.

Here are just a few more of the advertising advantages with WeChat:

  • WeChat ads can use text, images, video, and links, and they appear in a user’s timeline right along with updates from friends.
  • New banner ads are being used that allow brands to tailor their messaging to individual customers in specific locations, right down to the local weather.
  • CRM advertising has enormous retargeting potential. With the most popular integrations available, brands can market directly to customers and track performance through the WeChat platform.

As shown in the Tencent 2018 Q2 report, advertising is booming in WeChat (in billions of yuans):

Q1-Q2 Total Online Advertising Revenue Social Media
2017 17.0B 10.4B 6.6B
2018 24.8B 16.8B 8.0B
Growth +46% +60% +22%

However, the possibilities are endless with such a massive user base. Ad revenue (for games) has grown 5X from 2018 Q1 to 2018 Q2. Ads make up 15%-20% of WeChat’s parent company’s revenue, compared to Facebook’s ads accounting for 70% of revenue. Many are already predicting that WeChat’s annual ad revenue will go up in 2018 to $11 billion.

The Emarsys–WeChat Integration

Emarsys recognizes WeChat as an entirely new channel with great marketing potential. We have been hard at work building the necessary integrations so that our clients can send WeChat messages directly from the Emarsys marketing platform to customers with official accounts.

Just a few of the things that brands can do with the Emarsys–WeChat integration include:

  • Contact identification by matching WeChat OpenIDs with identified customer profiles.
  • Omnichannel integration where the WeChat platform is one of several channels for better targeting and customer engagement.
  • Customer data analysis, automation, and campaign management are done within a single platform.
  • Simpler segmentation and tactics that help you know what customers want and when.
  • Content personalization for WeChat individual users as well as groups of users.

Final Thoughts

The world has changed. Brands no longer dictate where or when a sale will happen. The power now lies with the customer, and in this case, customers have made WeChat one of the most widely used channels in China and the greater Asia-Pacific region today.

Chinese users overwhelmingly prefer WeChat messages over email. Any brand that wants to connect with these customers cannot ignore this critical change in the two channels. As email loses ground in China, WeChat may quickly become the best channel for reaching a lot of customers.

WeChat will no doubt continue to evolve, developing more ways for customers to interact with the brands they love and for brands to respect their audience with messages and incentives that apply to the individual. Here at Emarsys, we will continue to evolve right along with the needs of our clients and find new ways to make your data work for you. To learn more about how we can help you achieve your marketing goals, check out our newest product offering.

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