CIW Dossier China Digital Insights (DCDI) is compiled to provide statistical information about China digital insights on the internet economy, digital trends, online users, mobile apps, and e-commerce. Click here to download.

Archive

E-commerce Market

Jul 2021

CIW Dossier “China E-Commerce” is compiled to provide statistical information about China’s e-commerce market including online retail, cross-border e-commerce, e-commerce users, and mobile shopping apps. If you need an overall insight into China’s e-commerce market, this is what you should read.

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China 618 Shopping Festival

Jun 2021

CIW Dossier “China 618 Shopping Festival” provides a perspective of the merchants regarding the performance, advertising budget, and sales expectations from the top e-commerce platforms for 618 shopping festival.

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China Social E-Commerce

Apr 2021

CIW Dossier “China Social E-Commerce” is compiled to provide four business models and statistical information about China’s social e-commerce market. Four social e-commerce models: group buying, membership, community-based, content-driven.

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China Pets Retail Market

Jan 2021

CIW Dossier on China Pets Market provides an overview of China’s pet retail market as long as the characteristics of internet users in the corresponding segment.

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Double 11 (Singles Day)

Nov 2020

CIW Dossier Double 11 is compiled to provide statistical information about China’s largest shopping festival led by Alibaba Tmall platform including pre-sale data, top retailers’ performance by GMV, and top brands on Double 11 by categories, etc.

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Payment

Oct 2020

CIW Dossier Payment is compiled to provide statistical information about China’s payment market on online payment, mobile payment, third-party mobile payment, and users’ preference for payment method in different usage scenarios. If you need an overall insight on China’s payment market, this is what you should read.

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Top Mobile Apps

Jun 2020

China’s mobile apps market, including mobile internet overview, mobile apps market, top mobile apps, select mobile apps, and mini programs.

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Taobao Live

Apr 2020

CIW Dossier Taobao Live – is compiled to provide statistical information about Alibaba’s live streaming platform.

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China Outbound Tourism

Nov 2019

Statistical information about China’s outbound travel market.

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China Online Travel Market

Nov 2019

CIW Dossier China Online Travel Market is compiled to provide statistical information about China’s online travel market including market overview, online air ticket booking, online accommodation booking, online vacation booking, outbound travel, and high-end travel.

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China Media Ad Spending

Feb 2019

China’s overall media advertising market growth and the top advertisers in China in 2018.

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Luckin

June 2019

Luckin is China’s second largest and fastest-growing coffee network, in terms of the number of stores and cups of coffee sold, according to the Frost & Sullivan Report. While operating three types of stores, Luckin strategically focus on pick-up stores, which accounted for 91.3% of their total stores as of March 31, 2019.

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China Internet Users in Tier-3 to Tier-5 Cities

Jun 2019

Quick view of China’s internet users’ time usage and expenditure in lower-tier cities (tier-3, 4, 5).

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WeChat Official Account

July 2019

CIW Dossier “WeChat Official Account” is compiled to provide a quick view of Tencent’s WeChat content ecosystem Official Account.

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Cross-border E-Commerce Female Shoppers

Jan 2019

Statistical overview of China’s female shoppers purchasing overseas consumers goods.

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China Advertising Market

Dec 2018

Statistical information about China’s advertising market on traditional advertising market, online advertising market, invalid traffic of digital ads, and mobile e-commerce ads. If you need an overall insight on China’s advertising market, this is what you should read.

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China Smartphone

Dec 2018

CIW Dossier China Smartphones is compiled to provide statistical information about China’s smartphone market including smartphone shipments, sales, and market share information as well as top smartphone brands and user profiles.

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Weibo Online Shoppers

Nov 2018

CIW Dossier Weibo Online Shoppers is compiled to provide statistical information about Weibo users who are interested in online shopping. If you need an overall insight on the demographics, purchasing behavior, and engagement, etc. of Weibo online shoppers, this is what you should read.

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China’s High-end Travelers

Aug 2018

CIW Dossier “China’s High-end Travelers” is compiled to provide an overview of China’s high-end travelers, including their travel choices, demographics, and travel habits.

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WeChat Intro

July 2018

CIW Dossier on WeChat is compiled to provide an introduction of this digital ecosystem and statistical information about China’s top mobile social application. It provides insights on WeChat Official Accounts, WeChat Pay, Mini-Programs, and advertising channels.

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Online video market

Sep 2018

CIW Dossier China Online Videos is compiled to provide statistical information about China’s online video market including online video apps, mobile video users, paid video users, short video apps, and live streaming apps. If you need an overall insight on China’s online video market, this is what you should read.

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Pinduoduo (PDD)

Sep 2018

CIW Dossier Pinduoduo is compiled to provide statistical information about Pinduoduo on group purchase model, app ranking, financial performances, user profile, IPO, and counterfeit problems.

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Golden Week Tourism

Oct 2018

CIW Dossier Golden Week (National Day) Tourism is compiled to provide statistical information about China’s tourism market for the peak travel period – Golden Week / China’s National Day holidays.

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Sports & Fitness Mobile Apps

Nov 2018

CIW Dossier China Mobile Fitness & Sports Apps is compiled to provide statistical information about China’s sports & fitness mobile app market.

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What’s this “520 day” that intrigues many in China? The term 520, an abbreviation for May 20, denotes an unofficial Valentine’s Day in China. The number “520” phonetically resembles “Wo Ai Ni” or “I Love You” in Chinese.

While February 14 remains the globally recognized Valentine’s Day, the Chinese honor their affection on several other occasions as well, including May 20 (520 Day) and the Qixi Festival. These days are regarded as Chinese versions of Valentine’s Day, with the 520-day holding special significance as it symbolizes “I Love You.”

Despite not being an official holiday, 520 Day has garnered popularity among couples and singles as an opportunity to express romantic love.

Due to the ongoing pandemic in 2020, the “520 Day” celebration witnessed changes with fewer public gatherings. Nonetheless, businesses capitalized on the festival by initiating online engagement campaigns.

For instance, luxury brand Prada, created a campaign using the hashtag #prada520# on Weibo, one of China’s top social platforms. The campaign featured brand spokesperson Cai Xukun and garnered 180 million views as of May 5.

The “520 Day” traces its roots to Taiwanese singer Fan Xiaolan’s song “Digital Love,” where “520” symbolized “I love you.” Over time, “521” was also interpreted as “I am willing,” and “I love you” in China, earning various epithets like “Marriage Day,” “Love Expression Day,” and “Love Festival.”

These two dates, May 20 & 21, serve as annual internet Valentine’s Days in China, echoing the phrases “I (5) love (2) you (0/1)” in Chinese. While they lack historical roots, they are products of commercial promotions in the 21st century.

Despite not being official holidays, the evenings of these days see restaurants and cinemas bustling and prices surging due to Valentine’s Day celebrations.

May 20 is particularly crucial as men utilize this opportunity to express their romantic love for women, often presenting gifts or ‘hongbao.’ Some couples even choose this date for their wedding ceremony.

The difference between 520 and 521 is that the former is largely a day for women, while the latter caters to men. On May 20, men express “520” (I love you) to their significant other. The subsequent day, women reply with “521” to indicate their reciprocation of love.

For marketers in China, these days present lucrative opportunities for promotions. The rising orders of roses, surging sales of chocolates, and full-house hotels underscore the business potential of the “520-day festival.”

A few notable examples of this trend include the most retweeted photo on Sina Weibo on May 20, 2014, and a post by The Economist in 2017 asking “how do economists say ‘I love you’?” The topic #Sweet 520# witnessed almost 4 million discussions and over 1 billion views as of noon on May 20, 2017.

The characteristics of 520 Valentine’s Day include:

1. Fashionable: “520” resonates with the younger generation who find creative ways to celebrate the day, even choosing this date for their wedding. It’s also a popular topic on WeChat Moments and QQ group chats.
2. Younger: Those under 30 years old, who are quick to embrace new trends and spend much of their free time on the internet, are the primary followers of 520 day.
3. Spiritual: Gifts exchanged on May 20 and 21 lean more towards the “spiritual.” It could be a coded message of love sent over the internet or mobile phone.
4. Implicit: Unlike the globally recognized Valentine’s Day, which is for established couples, the 520 Internet Valentine’s Day is preferred by men and women to subtly express their love using digital codes.

5 key trends shaping the Chinese economy, accelerated by COVID-19

Total paying users of Momo live video service and value-added service, without double counting the overlap and including 3.9 million paying users of a Tinder-like app Tantan, were 12.8 million for the second quarter of 2020, compared to 11.8 million for Q2 2019, which included 3.2 million paying users of Tantan.

Tantan has been accelerating the testing of its live video service since the middle of April, and live video service revenues from Tantan were 191.7 million (US$27.1 million) in Q2 2020.

Fake fans and manipulations on China social media

Momo Financial Results

Net revenues decreased by 6.8% year over year to RMB3,868.3 million (US$547.5 million) in Q2 of 2020.

Net income attributable to Momo Inc. decreased to RMB456.4 million (US$64.6 million) in Q2 of 2020 from RMB731.8 million in the same period of 2019.

Non-GAAP net income attributable to Momo Inc. (note 1) decreased to RMB669.8 million (US$94.8 million) in Q2 of 2020, from RMB1,242.5 million in the same period of 2019.

Diluted net income per American Depositary Share (“ADS”) was RMB2.11 (US$0.30) in Q2 of 2020, compared to RMB3.33 in the same period of 2019. Non-GAAP diluted net income per ADS was RMB3.05 (US$0.43) in Q2 of 2020, compared to RMB5.60 in Q2 2019.

For the third quarter of 2020, Momo expects total net revenues to be between RMB3.7 billion to RMB3.8 billion, representing a decrease of 16.9% to 14.6% year over year.

Burberry launched its first luxury social retail store, empowered by WeChat

US President Donald Trump issued an executive order last week prohibiting US companies from any transaction that is related to WeChat.

Chinese consumers believe that without WeChat, the iPhone will become “expensive e-waste”. Following Trump’s executive order last week, iPhone fans across China are now rethinking their dependence on the iPhone.

More than 1.2 million users on China’s leading social platform Weibo have responded in the poll conducted by Sina Technology, a news media in China, asking users to choose between replacing the smartphone and uninstalling WeChat if WeChat can no longer be used on iPhone.

About 95% of the participants said they would rather change their smartphones than uninstallingWeChat. Trump’s ban will force many Chinese users to switch from iPhones to other brands because WeChat is so important to Chinese users.

With more than 1.2 billion monthly active users, WeChat is one of the most important applications in China. If WeChat is no longer supported, the iPhone will become useless for most Chinese users.

The scope of application of the Trump’s order is unclear. The most important thing is whether it will apply only to the U.S. territory or to the global business transactions of U.S. companies. If it is the latter, Chinese consumers will no longer buy iPhones in the future, resulting in Apple losing 30% of its global sales.

Apple has also warned the White House that Trump’s order will put the company at great risk. Disney, Ford, Intel, Morgan Stanley, UPS and Wal Mart have also informed the White House that U.S. companies may face serious consequences.

WeChat statistical highlights 2020

Weibo’s average daily active users were 241 million in March 2020, a net addition of approximately 38 million users on year over year basis. WeChat MAU up 8% to 1.2 billion.

Weibo Financial Results in Q1 2020

For Q1 2020, Weibo’s total net revenues were $323.4 million, a decrease of 19% compared to $399.2 million for Q1 2019.

• Advertising and marketing revenues for Q1 2020 were $275.4 million, a decrease of 19% compared to $341.1 million for Q1 2019.
  • Advertising and marketing revenues from key accounts (“KAs”) and small & medium-sized enterprises (“SMEs”) were $247.9 million, a decrease of 24% compared to $324.5 million for Q1 2019.
• VAS revenues for Q1 2020 were $48.0 million, a decrease of 17% year-over-year compared to $58.0 million for Q1 2019, primarily due to the decrease of revenues from live streaming business and was partially offset by the increase of membership revenues

Costs and expenses for Q1 2020 totaled $265.4 million, compared to $276.1 million for Q1 2019. Non-GAAP costs and expenses were $249.3 million, compared to $262.4 million for Q1 2019.

Income from operations for Q1 2020 was $58.0 million, compared to $123.1 million for Q1 2019. Non-GAAP income from operations was $74.1 million, compared to $136.8 million for Q1 2019.

Non-operating income for Q1 2020 was $10.0 million, compared to $48.6 million for Q1 2019. Non-operating income for Q1 2020 mainly included

• a $12.9 million net interest and other income;
• a $2.9 million net loss on the sale of investments and fair value changes on investments, which is excluded under non-GAAP measures.

Income tax expenses were $15.9 million, compared to $21.1 million for Q1 2019. The decrease was primarily resulted from reduced earnings and was partially offset by the estimated increase of effective tax rate for China operations primarily due to the expiration of the preferential tax treatment of one of the Weibo’s PRC subsidiaries in 2020.

Net income attributable to Weibo for Q1 2020 was $52.1 million, compared to $150.4 million for Q1 2019. Diluted net income per share attributable to Weibo for Q1 2020 was $0.23, compared to $0.66 for Q1 2019.

Non-GAAP net income attributable to Weibo for Q1 2020 was $67.4 million, compared to $128.5 million for Q1 2019. Non-GAAP diluted net income per share attributable to Weibo for Q1 2020 was $0.30, compared to $0.56 for Q1 2019.

As of March 31, 2020, Weibo’s cash, cash equivalents, and short-term investments totaled $2.35 billion. for Q1 2020, cash provided by operating activities was $63.6 million, capital expenditures totaled $7.3 million, and depreciation and amortization expenses amounted to $6.8 million.

For the second quarter of 2020, Weibo estimates its net revenues to decrease by 7% to 12% year-over-year on a constant currency basis. This forecast reflects Weibo’s current and preliminary view, which is subject to change.

Xiaohongshu community trends 2020

In 2019, mobile continues to lead China internet. The top mobile apps in China by total MAUs are still led by WeChat, Alipay, QQ, Taobao, iQiyi, and Tencent Video while TikTok continues fast growth and ranks the 7th. Tencent has the highest internet user penetration of 97.3% in China in September 2019, followed by Alibaba, Baidu, and ByteDance. Find a comparison of the four here.

Leading Chinese internet companies are building their own mini-program ecosystem; Tencent’s WeChat, Alibaba’s Alipay, and Baidu’s smart program in the leading positions. ByteDance’s also building on its own ecosystem on TikTok and Toutiao.

China has issued new regulations banning online video and audio providers from using artificial intelligence (AI) and virtual reality technologies to create fake news and content.

The shipment of China’s smartphone market was about 98.9 million units in Q3 2019, down 3.6% year-on-year. Huawei leads China’s smartphone market in Q3 2019 with 41.5 million units in shipment, an increase of 64.6% YoY. Vivo, Oppo, Xiaomi and Apple rank the second to the fifth.

Awareness of Chinese brands in international markets has declined over the past three years. The “Brand Power” of leading Chinese brands is up 15% year-on-year, compared with 5% growth last year. “Brand Power” is rising fastest in Japan, France, and Spain, representing emerging hubs of growth, according to the BrandZ™ Top 50 Chinese Brand Builders 2019 report.

Alibaba has been crowned the most valuable brand in China for the first time in the annual BrandZ™ Top 100 Most Valuable Chinese Brands ranking, having grown its brand value by 59% year-on-year to US$141 billion.

The total value of the Top 100 Most Valuable Chinese Brands increased by 30% to US$889.7 billion, the highest annual rise since the ranking launched in the year 2011.

By 2030, 58% of Chinese households are expected to be in or above the mass-affluent class, exceeding today’s 55% South Korean share according to McKinsey. Urban Chinese consumers’ spending profile converges with their counterparts’ spending profile in cities around the world.

Top articles on Chinese consumers include:

• Men’s beauty market in China looks to be more promising
• Chinese post-95s spent 80% more buying overseas
• Consumption habits of China’s post-90s generation
• 22 FMCG companies reaching over 100 million urban Chinese households in 2019
• China Generation Z overview 2019

Digital Media

Vlog has become the new theme of user growth competition on several video platforms in China. Vlog can be regarded as a kind of “video log” with popular themes of travel, food, pets and etc. Its production is relatively simple, the creator uses the camera to record what he sees and thinks in his daily life, and then through later editing, with music, text or stickers, can produce a Vlog.

China’s search engine companies’ revenue is estimated to reach 158.08 billion yuan (US$22.98 bn) in 2019 and 183.17 billion yuan (US$26.63 bn) next year. But Baidu fell to the third by digital advertising revenues following Alibaba and ByteDance.

Tencent launched several different social ads formats including the Nearby Ads for SME retailers on WeChat Moments.

China Social Media

As of Q3 2019, WeChat’s monthly active users reached 1.15 billion and Weibo’s were 497 million.

In 2019, the top rising social media is no doubt ByteDance’s short video leader TikTok. Short video penetration exceeded 70% in 2019 with 810 million active users in Sep.

WeChat launched its own version of “Facebook Stories”. WeChat launched two new sections -“Time Capsule” and “Top Stories”- and several news features for WeChat iOS 7.0 on December 21, 2018. That’s the biggest upgrade since version 6 four years ago and one big move into the short video market.

Xiaohongshu received most attention in 2018 but faced a rough year in 2019 with its app removed from every major app store” in July. It will launch live broadcasting feature next year. Read our latest insights on how Xiaohongshu successfully pivoted its growth and product strategies.

The most popular articles on social media:

1. Stories behind China’s super app WeChat, told by its founder
2. ByteDance: A Chinese Mobile App Factory
3. Audi used competitor Infiniti’s creative in a video ad on WeChat Moments
4. Top short video apps compared: Tik Tok vs. Kwai – Part 1 Platforms
5. China social media users compared: Weibo vs WeChat vs Momo

China E-commerce & Retail

Taobao, Tmall, and JD have the broadest user reach than other e-commerce platforms in China. Nevertheless, Pinduoduo is the only platform with more low education background users. Both Amazon and Dangdang are much less popular among users with middle school education or lower. Read our online shopper trends for 2019 here.

In 2019, Pinduoduo has beat JD and become the second-largest e-commerce platform in China. Meituan also did very well.

This year’s Tmall 618, there were hundreds of domestic and foreign brands whose sales exceeded last year’s Double 11, with the highest growth rate exceeding 40 times.

Alibaba set a new record of Double 11 in 2019 again with full-day sales on Tmall of 268.4 billion yuan (US$38 billion), the largest annual shopping festival in China. There were 299 brands who reached RMB 100 million in GMV, including Apple, Nike, Estee Lauder and Giorgio Armani. Find out the best-selling brands here.

The number of mobile payment users has reached a saturation point in 2019, and the growth is drawing to a close. The penetration rate is 95.1%. The annual transaction volume of third-party mobile payments reached 183.79 trillion Yuan, an increase of about 20.3% over the previous period. The annual number of transactions reached 1.17 trillion, an increase of about 12.8%.

Following the adoption and popularity of mobile payment, China supermarkets are growingly more intelligent with technologies such as face recognition, IA, AR, O2O, etc. WeChat recently shared a vision of its technology integration with supermarkets in the future.

Live Broadcast for E-Commerce

Live broadcasting has become an important channel for e-commerce sales in 2019 and will continue to grow. A total number of 81 live rooms on Taobao Live reached 100 million yuan sales; a total of 5 organizations broke 1 billion yuan sales. Taobao Live aims to deliver 500 billion yuan sales in the next three years.

Tencent launched a live broadcasting tool for WeChat Official Account (OA) in March 2019, currently supporting audio and video broadcast. Influencing WeChat OA can utilize their fanbase on WeChat, in combination with quality live broadcasts, to drive e-commerce sales.

Though still in the testing phase, Tencent Live integrates live streaming with its mini program. Brands can embed HTML5 based products on its mini program as an entry to its live streaming. Followers and fans can click to open Tencent Live to watch live streaming.

Kuaishou, also known as Kwai, announced its daily active live broadcasting users exceeded 100 million. 56% of Kuaishou anchors are post-90s.

Social E-commerce & Mini Programs

Social e-commerce GMV reached 626.85 billion yuan in 2018 with an increase of 255.8%. It’s expected to continue the fast growth and exceed 1.3 trillion yuan in 2019 and 2.86 trillion in 2021.

Social e-commerce in China has much higher conversion rates than traditional ones. Social e-commerce providers recharge their trust through social currency, which means that product recommendations from WeChat friends naturally have a social trust foundation.

The number of e-commerce transactions on WeChat mini-programs increased by 27 times year-on-year in the first half of 2019,

In Becky’s initial WeChat e-commerce mini-program launch in December 2017, the transactions exceeded one million yuan in 7 minutes and nearly 3 million yuan sales in 113 minutes according to WeChat Advertising. Since then, it has been able to maintain a million transactions in the first minute of new product launches. Read her story here.

Short Video for E-Commerce

TikTok signed a 7-billion yuan agreement with Taobao including 6 billion yuan ads and 1 billion yuan commission according to leaked news online. TikTok denied the accuracy of those numbers but the news got the attention of many in the e-commerce market.

During China’s mid-year shopping festival 618, active TikTok shopping cart user ratio exceeded 68%. The top 30 users referred over 400 million yuan worth of products sales.

Top articles in e-commerce and retail:

1. How Tmall played a vital role in China’slargest wool and textile enterprise
2. Taobao to enable farmers to find new markets and customers
3. Introduction to Xiaomi’s e-commerce platform Youpin
4. Alibaba’s Hema penetrating low-tier cities with Hema Mini supermarket
5. Huawei turning its smartphones to POS machines
6. China’s cross-border e-commerce users overview 2019

Chinese travelers

The total number of online travel agency (OTA) users in China reached 145.6 million. Tier-2 cities in total saw the most number of OTA users (56.68 million), followed by tier-3 group and tier-1.

On average an outbound Chinese tourist plans to spend US$6,706 traveling overseas in 2019, up 15% from 2018. Product quality became the second most important factor to consider when shopping abroad. 69% of outbound Chinese tourists made purchases on their mobile phones in 2018.

China’s emerging Gen-Y’s complete travel experience journey has five stages: dream, plan, book, experience, and share. Get an overview of emerging Gen-Ys’ power, how they re-shape China’s travel market, stages of their travel journey, and how to get ready here.

Sightseeing (around 50%) and vacation (over 40%) were the two main driving force for traveling. Self-guided travelers spend less compared with travelers with guided tours. Self-guided (free and easy trips) travelers spend more on transportation and accommodation than those with guided tours.

Top articles in tourism:

1. China Golden Week Tourism Trends & Insights 2019
2. The emerging Gen-Y for China’s travel market
3. Outbound Chinese tourists mobile payment usage 2019; average spend US$6,706
4. Rising outbound travelers from lower tier cities in China
5. China outbound tourism insights 2019

Annual subscribers can download McKinsey Consumer Trends Report 2020 here.

In the recent “Double 11 2019” shopping festival in China, Apple’s official flagship store on Tmall “Singles Day” transaction exceeded 7 times of last year’s full day sales in just 10 minutes. iPhone 11 broke 100 million yuan in sales in 1 minute.

Related: Double 11 Festival statistics 2019

This year is Apple’s first participation in the Tmall “Double 11” promotion. The official Weibo of the Tmall spokesman said that during this year’s “Double 11”, Apple’s official flagship store participated in the Tmall “Double 11” 2019 platform subsidy, the highest straight off 1,111 yuan (about US$158).

On November 9, Tmall announced an additional budget of 100 million yuan to subsidize Apple’s official products.

On the “Double 11” day, Apple’s official flagship store, including iPhone, iPad, Mac, Airpods and other in-store products, participated in the 24-month interest-free installment payment, iPhone 11 buyers could save 300 yuan after the receipt of the coupon and Airpods Pro 60 yuan off. In this way, Airpods cost less than 3 yuan a day; and, iPhone 11 less than 8 dollars a day.

JD (Jingdong) also introduced a super-billion subsidy (10 billion yuan).

After entering the corresponding interface of JD platform, users could receive corresponding coupons. Among them, iPhone XS and iPhone XS Max offered 3,000 for over 8,000 yuan spend, or 1,800 yuan off 3,000 yuan spend.

iPhone 11 Pro / Pro Max offered 500 yuan discount for over 8,000 yuan spend , iPhone 11 300 yuan off 5,000 yuan spend. At the same time, the purchase of some iPhones could enjoy 12-month interest-free installment plan applying JD Credit Coupons.

According to the “Double 11” report data released by Jingdong, Apple’s sales ranked first on November 11th. At the same time, Apple was also the cumulative best-selling brand from November 1st to 11th, followed by Huawei, Honor (Huawei), Xiaomi, Vivo and Oppo.

The fast rising social e-commerce platform Pinduoduo also provided heavy subsidies for iPhone buyers.

iPhone demand is strong in China. From a note to clients by UBS:

Monthly government data suggests overall iPhone demand in China was strong in the month of September, up ~230% vs. ~110% monthly growth last September. This is wholly consistent with recent procurement data/estimates from the UBS Asia Hardware team.

In the week ahead of this year’s Double 11 (4 Nov – 10 Nov), iPhone was ranked first by search volume on Baidu in the smartphone category, followed by Huawei and Xiaomi. iPhone’s media coverage was ranked second after Huawei in the same period according to data from Baidu.

In preparation for the “Double 11”, Changshuo Technology, an Apple foundry in Pudong, Shanghai, worked overtime to ensure the “Double 11” supply of the iPhone 11.

The level of marketing and advertisement put into new products by Apple is probably the largest.

In my visits to several tier-2 to tier-3 cities in China, iPhone 11, 11 Pro, and iWatch video ads were all over Chinese digital media across both desktop and mobile. Review articles on WeChat content network (Official Accounts) and Weibo were hard to miss.

Top Mini-Programs in Oct 2019; China’s mini-apps war led by online shopping

QQ (Tencent) introduced the “One-click Comment” function and managed to explored new sources of traffic. Alipay introduced the “Comment after Payment” function. WeChat (Tencent) introduced the Notification Subscription and Industry Assistant functions to support its mini-apps. TikTok launched a dedicated page for mini-apps, and at the same time introduced its Karaoke mini-app, further complementing ByteDance mini-program ecosystem.

Meituan, as a late-comer, also launched its own mini-program platform in October this year, further heating up the competition.

According to anlaytics company Aladdin’s October ranking of mini-apps, distribution of top mini-programs by category witnessed a significant change.

Online shopping mini-programs have reclaimed the top places on the list. Life services mini-programs showed outstanding performance while mini-apps in the video and travel categories dropped significantly in terms of ranking.

In the vertical markets, the Golden Week long holiday boosted the demand for portable power bank, leading to a significant climb on the list of phone charging related mini-apps.

The distribution by category of the newcomers on the list showed an apparent trend of pre-heating of the Double Eleven Festival 2019: the number of new or updated online shopping mini-apps increased significantly.

Audi launched its video ad campaign on WeChat Moments earlier today. What’s interesting is that the video played is an Infiniti ad.

Based on discussion from a WeChat Group of advertising professionals, Audi’s spending 30 million yuan working with Tencent Social Ads.

Tencent Ads has issued an apology and shared that the wrong ad creative launched at 9 am today was taken offline at 10:30 am. It was caused by an automobile service company’s careless mistake.

The ad generated 3,959 impressions with a total spend of 202 yuan according to Tencent. But the media coverage about this incident is growing; good news for both Audi and Infiniti.

Based on the provided figure, the CPM is roughly 51 yuan (US$7.2) and Audi’s campaign most likely targets lower-tier cities. As Beijing and Shanghai targeted video ads on WeChat Moments cost about 100-300 yuan on CPM.

And, some influencers are making fun of Audi on China’s social media, which drives more free coverage.

Shuangye, a Weibo influencer with over 1 million followers, published a post, “Audi is indeed a generous company, spending money in WeChat Moments for Infiniti China…”

Some companies are taking advantage of this incident, like Volvo:

#Audi Infiniti# has become a hot topic on Weibo with over 3.4 million views as of writing this post. But neither Audi nor Infiniti has responded yet. It’s a good opportunity for Audi to generate good awareness for its Q8 though the value from from the incident far exceeds Audi’s 200 yuan spent.

Fake fans and manipulations on China social media

Update: Infiniti responded in the evening via its Weibo account:

Close to one third (29%) of China outbound travelers are post-80s; They spent an average of 5,566 yuan on travel booking. Online travel websites and mobile apps are the top sources of China’s outbound tourists to obtain travel information in 2019. China’s outbound travelers spent most on shopping (37%) and transport & accommodation (32%).

The number of international flight routes in China grew to 849 in 2018 from 381 in 2012. China saw passenger traffic on international routes growing at about 15% in 2018 to 63.7 million person-trips.

Related Dossier: China Outbound Tourism

China’s outbound tourism OTA market is expected to reach 91.5 billion yuan in 2019 and 110 billion yuan in 2020.

Close to one third (29%) of China outbound travelers are post-80s, those born during 1980 and 1989. They spent an average of 5,566 yuan on travel booking in 2018.

More outbound Chinese travelers went on free-and-easy (self-guided) tours, growing from 37.2% in 2015 to 42.5% in 2018.

Southeast Asia is the top outbound destinations (54.8%) among Chinese travelers in 2019, followed by East Asia (46.9%), and Hong Kong/Macau/Taiwan region (42.6%). Europe is also a population destination (27.9%).

Characteristics of China outbound travelers in 4 segments

Momo, one of China’s top mobile social networking platform, announced total net revenues of RMB4,152.6 million (US$604.9 million) in the second quarter of 2019, an increase of 32% from RMB3,152.5 million in Q2 2018.

Monthly Active Users (“MAU”) on Momo application were 113.5 million in June 2019, compared to 108.0 million in June 2018.

Compare: Weibo MAU – 486 mm, WeChat – 1.13 bn, QQ – 808 mm

Total paying users of its live video service and value-added service, without double counting the overlap, including 3.2 million paying users of Tantan, were 11.8 million for Q2 2019, compared to 11.6 million for Q2 2018, which included 3.1 million paying users of Tantan in June 2018.

As of August 25, 2019, the number of paying users of Tantan was 4.1 million.

Its live video service revenues were RMB3,099.9 million (US$451.5 million) in Q2 2019, an increase of 18% from RMB2,620.9 million during Q2 2018. The growth in live video revenues was contributed by the increase in quarterly paying users, as well as the increase in average revenues per paying user per quarter.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. The total value-added service revenues were RMB948.4 million (US$138.1 million) in Q2 2019, an increase of 169% from RMB352.6 million during the same period of 2018.

The year-over-year increase was primarily attributable to the continued growth of the virtual gift business on the Momo application driven by more paying scenarios introduced to enhance the social experience of Momo users, and the consolidation of Tantan’s membership subscription revenues for the whole second quarter of 2019, compared to the single month of June 2018 in Q2 2018.

Mobile marketing revenues were RMB76.2 million (US$11.1 million) in Q2 2019, a decrease of 46% from RMB142.0 million during the same period of 2018. The decrease in mobile marketing revenues was due to the decrease in advertisement properties on Momo’s platform resulting from the suspension of certain user posting functions.

Mobile games revenues were RMB23.2 million (US$3.4 million) in Q2 2019, a decrease of 33% from RMB34.8 million in Q2 2018. The decrease in mobile game revenues was mainly due to the continued decrease in quarterly paying users of mobile games.

Net income attributable to Momo Inc. decreased to RMB731.8 million (US$106.6 million) in Q2 2019 from RMB750.2 million in the same period of 2018. Momo recognized a total share-based compensation expense of RMB482.5 million (US$70.3 million) in Q2 2019 including a share-based compensation expense of RMB323.7 million (US$47.1 million) regarding certain share options granted to the founders of Tantan Limited (“Tantan”), while the total share-based compensation expense recognized in the same period of 2018 was only RMB134.2 million.

In August 2018, Tantan Limited granted 3,578,205 share options to its founders. The share options included a performance condition in which the founders have the right to receive fully vested options immediately upon achieving certain performance condition. During Q2 2019, the performance condition was met and accordingly, Momo recognized a share-based compensation expense of RMB323.7 million (US$47.1 million) related to those options.

Non-GAAP net income attributable to Momo Inc. (note 1) increased to RMB1,242.5 million (US$181.0 million) in Q2 2019, from RMB893.2 million in the same period of 2018. Diluted net income per American Depositary Share (“ADS”) was RMB3.33 (US$0.49) in Q2 2019, compared to RMB3.55 in the same period of 2018.

Non-GAAP diluted net income per ADS (note 1) was RMB5.60 (US$0.82) in Q2 2019, compared to RMB4.22 in the same period of 2018.

For the third quarter of 2019, Momo expects total net revenues to be between RMB4.25 billion to RMB4.35 billion, representing an increase of 17% to 19% year over year.

China social e-commerce market to reach 1.3 tn yuan in 2019 and 2.86 tn in 2021

Weibo’s monthly active users (“MAUs”) reached 486 million in June 2019, a net addition of approximately 55 million users year-over-year. Mobile MAUs represented approximately 94% of MAUs.
Weibo average daily active users (“DAUs”) were 211 million in June 2019, a net addition of about 21 million users year-over-year according to Weibo’s official finance results.

Weibo net revenues increased 1% year-over-year to $431.8 million, representing an increase of 7% on a constant currency basis.

• Advertising and marketing revenues were $370.7 million, flattish year-over-year.
• Value-added service (“VAS”) revenues increased 8% year-over-year to $61.2 million.

Net income attributable to Weibo was $103.0 million, compared to $140.9 for the same period last year, and diluted net income per share was $0.46, compared to $0.62 for the same period last year. Non-GAAP net income attributable to Weibo was $156.4 million, and non-GAAP diluted net income per share was $0.68, both flat year-over-year.

Weibo Financial Results in Q2 2019

For Q2 2019, Weibo’s total net revenues were $431.8 million, an increase of 1% compared to $426.6 million for the same period last year.

Advertising and marketing revenues for the second quarter of 2019 were $370.7 million, compared to $369.9 million for the same period last year. Advertising and marketing revenues from small & medium-sized enterprises (“SMEs”) and key accounts (“KAs”) were $346.5 million, representing an increase of 2% compared to $338.7 million for Q2 2018.

VAS revenues for Q2 2019 were $61.2 million, an increase of 8% year-over-year compared to $56.6 million for the same period last year. The increase was mainly attributable to the revenues derived from the live streaming business acquired in Q4 2018, and was partially offset by the decrease in gaming revenues.

Costs and expenses totaled $280.6 million in Q2 2019, compared to $271.7 million for the same period last year. Non-GAAP costs and expenses were $265.6 million, compared to $259.3 million for the same period last year.

Income from operations for Q2 2019 was $151.3 million, compared to $154.9 million for Q2 2018. Non-GAAP income from operations was $166.2 million, compared to $167.3 million in Q2 2018.

Non-operating loss for Q2 2019 was $24.0 million, compared to an income of $10.9 million for the same period last year. The non-operating loss included investment-related impairment of $31.7 million, which is excluded under non-GAAP measures.

Income tax expenses for Q2 were $26.1million, compared to $25.1 million for the same period last year.

Net income attributable to Weibo for Q2 2019 was $103.0 million, compared to $140.9 million for the same period last year.

Diluted net income per share attributable to Weibo for the second quarter of 2019 was $0.46, compared to $0.62 for the same period last year. Non-GAAP net income attributable to Weibo for the second quarter of 2019 was $156.4 million, compared to $156.1 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo for Q2 2019 was $0.68, compared to $0.68 for Q2 2018.

As of June 30, 2019, Weibo’s cash, cash equivalents, and short-term investments totaled $1.56 billion. For the second quarter of 2019, cash provided by operating activities was $132.8 million, capital expenditures totaled $3.2 million, and depreciation and amortization expenses amounted to $6.7 million.

For the third quarter of 2019, Weibo estimates its net revenues to increase 6% year-over-year to 9% year over year on a constant currency basis. This forecast reflects Weibo’s current and preliminary view, which is subject to change.

WeChat MAU up 7% to 1.13 million in Q2 2019; QQ MAU 808 mn

TikTok signed a 7-billion yuan agreement with Taobao including 6 billion yuan ads and 1 billion yuan commission according to leaked news online. TikTok denied the accuracy of those numbers but the news got the attention of many in the e-commerce market.

As of 25 June 2019, the number of users who activated shopping cart functions has exceeded one million, 10 times more than last December.

During China’s mid-year shopping festival 618, active TikTok shopping cart user ratio exceeded 68%. The top 30 users referred over 400 million yuan worth of products sales.

TikTok e-commerce is originally based on short videos as the main carrier. TikTok influencers’ e-commerce sales capability is correlated to the number of fans, content categories, etc. But, live streaming is more about real-time sharing with sales techniques, with a relatively lower requirement on the number of fans.

Since the beginning of commercialization, the main way to monetize TikTok is advertising while Kwai relies on live broadcasting.

Top short video apps compared: Tik Tok vs. Kwai – Part 1 Platforms

Kwai recently hired executives from Tencent and Weibo to take up important positions. After setting a target of 300 million DAU (TikTok’s current DAU) by Chinese New Year 2020 and starting a battle mode, Kwai is no longer low-key and fully exerted its strength.

When viewing videos on Kwai app, the sharing button automatically becomes a WeChat Moments share icon, prompting users to share. Tencent opens this function only to Kwai in addition to its own short video platform Weishi.

7 Lessons for marketers on top short-video platforms: Tik Tok vs. Kwai

Live video broadcasting has proven to be a fun, engaging way to connect with followers and grow the audience. 78% of online viewers are watching video on Facebook Live as of 2018. In China, live streaming has stepped up the game and become a useful tool to drive e-commerce traffic and sales.

Audiences are quite active in live streaming in China, which makes it a good channel for marketing. 50.5% of them would make comments, over 40% of them would like it, reward hosts (free-to-play), and share videos to others, according to a study by iResearch.

86% of users thought positively about live streaming marketing. Among them, those younger than 24 years are more likely to be attracted by new products release and buyer’s sharing.

In 2018, Taobao’s live broadcasting platform Taobao Live delivered more than 100 billion yuan sales of products, a year-on-year growth rate of nearly 400% according to Alibaba.

A total number of 81 live rooms on Taobao Live reached 100 million yuan sales; a total of 5 organizations broke 1 billion yuan sales. Taobao Live aims to deliver 500 billion yuan sales in the next three years.

80% of the broadcasters are female. The number of Taobao Live broadcasters with a monthly income of over one million yuan has exceeded 100 people.

Meet Viya, a top broadcaster on Taobao Live

Viya used to be a small star in the entertainment industry. She, born in the “fashion family”, circled back to the apparel industry while working as a model and operating offline apparel stores. In 2011, she saw the business opportunity and closed all offline stores and moved to the Taobao platform.

Her fifth year on Taobao, 2015, had a total sales of over 10 million yuan on Double 11 but suffered a net loss of three million yuan.

In May 2016, Viya started the first live broadcast on Taobao. She managed to close 20 thousand sales orders by one live broadcast in the second month.

And, her live broadcast on October 10, 2017, made her a top sales girl.

This very broadcast helped drive 70 million yuan (US$10.6 million) sales to a Taobao store who has zero followers. It started at 7 pm until 40 minutes past midnight and attracted over 1.53 million viewers with 12.3 million likes.

She broke her record in last year’s Tmall Double 11 with over 300 million yuan in sales.

Live video broadcasting is now a critical part of a successful e-commerce operation on Alibaba’s e-commerce ecosystem. Many stores have hired a team of broadcasters with many simultaneous broadcasts of different products.

There is now a group of online shoppers who don’t check out the product details pages. They just watch live video broadcast and place orders.

Said Mr. Zheng during my interview with him, an e-commerce business owner in south China.

Related: Top 20 Chinese video mobile apps in overseas market

E-Commerce Live Broadcasting in WeChat Ecosystem

Tencent launched a live broadcasting tool for WeChat Official Account (OA) in March 2019, currently supporting audio and video broadcast. Influencing WeChat OA can utilize their fanbase on WeChat, in combination with quality live broadcasts, to drive e-commerce sales.

A fashion digital media Ta Du (She Reads) did a live broadcast e-commerce show in April for two hours. It attracted 11,951 viewers and received 1,228 orders with a conversion rate of 18.32% according to 36Kr.

This broadcast utilized both a mobile app and a WeChat mini-program. It started from the mobile app to generate a mini-program card or embeddable code for an official account article. Users can click on that to book, watch, and interact.

Tencent Live serves WeChat’s Official Account. The mobile app can be used to create and operate live broadcasting while the mini-program client serves users for booking, watching, and interacting with the live video broadcasts.

It’s in testing and not available yet in the App Store. WeChat Official Account (OA) owners can get the app download link from Tencent Live Assistant WeChat OA and apply for an account before being able to test it. With about 1.1 billion monthly active users, WeChat could be potentially a massive platform for e-commerce sellers.

Related: How to use live streaming for successful marketing in China in 2018

Other e-commerce live video broadcasting platforms

Some other leading e-commerce platforms in China run their own live video broadcasting channels as well, including Jingdong, Vipshop, Mogujie, etc.

Seeing over 500 million live broadcasting users in China, businesses can also utilize independent popular live video broadcasting platforms and social media to drive brand awareness and product promotions.

Tik Tok has been testing e-commerce integration for over a year, starting from a Taobao e-commerce traffic driver to building its e-commerce ecosystem.

Kuaishou, another top short video platform in China, has integrated with multiple e-commerce platforms including Taobao, Tmall, Youzan, etc. Sellers can drive the traffic directly to the online store and complete the purchase.

Others you could consider include Weibo Live, Momo, Douyu, YY, etc.

If you haven’t started, you should focus on one platform, build your success, and expand from there. Different platforms could have very different demographic users; so, make sure you conduct your research and identify the channels with users meeting your audience profiles.

E-Commerce Live Broadcasting

Live video broadcasting for e-commerce is now a game for professional operations. Broadcasters are carefully tested, selected and trained with a mix of celebrities, Taobao owners, and the professionally trained.

Alibaba recently launched a tool to enable broadcasters to select products from 12 pools of 5 industry categories and about 130 thousand products. Broadcasters can either broadcast anywhere after receiving a product sample or visit the Taobao with additional services.

It appears easier than it actually is when it comes to driving e-commerce sales with live video broadcasting. Merchants must figure out the whole process including personas analysis, products selection, post-sales service, delivery, logistics, etc.

Delivering quality products with a relatively lower price is the key. You need to develop demographic and psychographic profiles of your fans to select the right product. Another critical factor for a successful live broadcast is the content.

Live video broadcasting is a valuable channel that consumer brands should tap on. Working with one of the influencer broadcasters whose fans match the same profile of your audience is a quick way to get started. Alternatively, you can outsource to companies who specialize in this area.

5 consumption trends of post-90s on Tmall Global

WeChat founder Allen Zhang (Zhang Xiaolong) gave a speech at WeChat’s Open Class Pro event early this year, he asserted that the value that mobile apps can deliver via improved services is limitless. And, WeChat is expanding to revolve around different standalone apps, such as the mobile app for reading books WeRead, and will try different services that are independent of but related to WeChat.

If you’d like to get into the head of Allen Zhang, you can read the official translation by WeChat team of his speech below. He shared design principles and changes, WeChat history, driving forces, mini-programs, social interactions, numbers of users, and the future.

Caution: this article is over 7,000-words long. For CIW Standard (annual) and CIW Premium subscribers, you can download the pdf and send it to your iBook or Kindle.

• WeChat Story by Allen Zhang

Good evening everyone! I’m Allen Zhang.

We just looked at some complaints (on-screen). Very good, because every day I hear complaints, I’m already used to it. I feel that in China, every day there are 500 million people saying we are not doing well and 100 million people wanting to teach me how to make products. I think this is very normal. But I’m not here to teach everyone how to make products.

I feel this year was special, WeChat’s eighth year. In August, WeChat’s daily login rate surpassed one billion. This is a momentous milestone, possibly the first Chinese app to reach one billion daily active users. We never released such information before. Maybe to us it was just a matter of time, but to a mobile product developer, it is still an achievement worth celebrating.

Design Principles and Changes

My friend once told me: “In the internet industry, WeChat is a different breed.” What he meant was that WeChat is different from other products. I was shocked, and at the same time very proud.

I was proud because “a different breed” meant WeChat is one of a kind, and even outstanding. But I was shocked because WeChat is only dedicated to making a good product — and because of that we are one of a kind? It is because many products do not see themselves as “products”, and don’t see users as “users”. At WeChat, we have merely done these basic two things.

WeChat is different from many products, as exhibited in many aspects. For example, when it comes to Chinese New Year, many apps will change their logo and interface to red and yellow for the holiday, making it look like stir-fried eggs and tomatoes. However, WeChat doesn’t do that. Many people ask us why we insist on not doing it.

Currently, WeChat has reached one billion DAU (daily active users). Because of this, I’m actually more willing to spend some time talking in-depth about WeChat’s origin and core ideas to help explain our thought process behind WeChat.

Honestly, sometimes I just want to ask everyone: What kind of product is considered a good product? One with lots of users? One that is addictive? Or what?

I remember a few years back, we were playing with Apple’s iPhone and analyzing how such a good product was designed. I remember there was a German product designer, Dieter Rams, who came up with ten principles of good design; he was also highly regarded by Apple.

I will list these ten principles for everyone. Think about these in the context of WeChat, it’s very interesting:

• The first is a good product is innovative; it must have creativity.
• The second is it is useful.
• The third is it is beautiful.
• The fourth is it is easy to use.
• The fifth is it is unobtrusive, modest.
• The sixth is it is honest.
• The seventh is it is timeless; it won’t become outdated.
• The eighth is it doesn’t skip over any small details.
• The ninth is it is environmentally friendly and does not waste any resources.
• The tenth is it is not overly designed, meaning ‘less is more’.

Many would think that these principles are only suitable for Apple because they design and produce physical products, but users’ interactions with software products are much more frequent.

If you give users instruction, they will follow it. Users do what you prompt them to do. Both hardware and software products are essentially tools, so principles for tool design are applicable.

The reason why I highlighted these principles is that I believe that many products in the industry do not emphasize product design, or rather that product design is not their objective – design is just used to pad out a feature or squeeze profits from users.

WeChat never changes their logo or icon for holidays, many people will say that WeChat is practicing “self-restraint”. However, this decision doesn’t at all come from “self-restraint”, but rather it stems from our conviction towards good design principles. We will not make any changes that will damage the aesthetics of our product.

I noticed that in various industries when a product manager graduates and starts working, the company will misguide them. Because the company’s objective is to increase traffic and make money, hence everyone’s KPI is also to increase traffic and make money. This means the product manager’s work objective is not to create the best product, but to use whatever means necessary to obtain traffic.

We don’t support this way. What we advocate more is to use WeChat to create good products for our users.

I’m grateful for my past experience – from the PC era creating Foxmail, and later QQMail, to the smartphone era creating WeChat – because I’ve experienced many, many products. It’s to the point that my gut can tell what is a good product and what isn’t, which helps guide me in creating products.

Once I asked my colleagues a question: “In the PC era, what page has the most views?” The answer is Internet Explorer’s 404 error page. Then I asked, “Why didn’t Microsoft put an ad on the page?” My colleagues couldn’t answer. This question is very meaningful, right? Why didn’t Microsoft place an ad on a page with such high traffic? Why doesn’t WeChat place an ad on its startup page? Everyone can think about this.

WeChat is eight years old. Think for a second, how much time do you spend on WeChat every day? Do you spend more time with your closest family and friends, or with WeChat? If WeChat was a person, certainly it would be your best friend, that’s why you’re willing to spend so much time on it. Then, how could I stick an ad on your best friend’s face? Every time you saw him, you would have to watch an ad before you could talk to him.

Interestingly, because we stick to our principles, we must change many things… The important thing is that we make sure our products adapt to the era we are in, rather than failing to adapt it out of fear that users will complain.

Interestingly, because we stick to our principles, we must change many things.

This reminds me of the major change we made in WeChat version 7.0’s user interface. Many users complained, saying that they weren’t used to it.

Actually, any major updates will always cause user dissatisfaction because people are used to whatever they are familiar with, and whatever they are familiar with is the best. We can’t poll one billion users to decide what is good. So, how do we improve our design through such changes, making sure that the change is for the better? These decisions must follow good principles.

Just like WeChat version 7.0, we spent a very long time on it; I kept switching my own WeChat back and forth between the old and new versions. After a while, I wasn’t willing to switch back to the old version.

Maybe users can’t accept the new version right away, but I believe that after they become familiar with it, they will accept it. The important thing is that we make sure our products adapt to the era we are in, rather than failing to adapt it out of fear that users will complain.

Especially regarding UI, we can never please everyone. But we can make the product more beautiful, adapting it to or even shaping our users’ aesthetic preferences, instead of lagging behind.

WeChat’s History

Many people have probably heard this story before, but back then, I wrote an email to Pony [Ma Huateng] about creating WeChat. This is a true story, though there are also some made-up stories out there, like that we went to some temple…

Anyway, thinking back to that email, from time to time I experienced a kind of post-event fear – if I didn’t send that email that night, and I went to shoot some pool instead, then there probably would be no WeChat or another team in the company might have made a different WeChat.

I find that many ideas come suddenly as if God has programmed code and puts it in your mind at the right time.

But that doesn’t mean traces of the idea for WeChat can’t be found before that moment. A year before WeChat was released, we had made QQMail into China’s most popular email provider. We tried many new things with it, such as Message in a Bottle, and I also spent a year designing Reading Corner in the email inbox.

Subsequently, a lot of our later WeChat products have borne some traces of QQMail, such as Subscription Accounts and Moments. We experimented with different methods of social interaction in QQMail’s Reading Corner; based on a social form of reading, friends could share and discuss articles with friends.

But Reading Corner was only a small part of the email inbox, so not many people used it. It got to the point where we felt we had reached the limits of the product and that it was time to change direction.

When Kik came out, I realized there was an opportunity –  this opportunity did not necessarily just stem from Kik as a product, but it came from me starting to use a smartphone, and from the lack of good communication tools in many PC products and messaging software.

My thought was very simple at that time – I wanted to make a communication tool for myself and others to use. Coincidentally we had a team developing a mobile version of QQMail, so we assembled a team of ten to start work on WeChat. Including back-end developers, three mobile front-end developers, UI, myself, and a recent graduate on my team, ten people in total. In two months, we had created the first version.

This is how WeChat got started, and this past year has been WeChat’s eighth year, a meaningful milestone. It marks the maturation of our product since its birth.

At that time, we had one principle: if a new product can’t grow naturally, we shouldn’t market it. So in the first five months, we didn’t promote it ourselves; we were waiting to see if users would be attracted to WeChat, if they would promote it themselves. If users weren’t willing to do this, whatever marketing we did would be meaningless.

I remember when WeChat version 2.0 was introduced, we saw user growth, not very rapid growth, but it was increasing naturally. At that moment, we knew we could start marketing it. We were grateful we had made a couple of good decisions.

First, we didn’t import users and automatically add them as friends within WeChat, instead of letting users choose who to invite or send a friend request to one-by-one. Second, when the product wasn’t yet widely recognized, we let it grow naturally rather than market it. These two things were the right way to do it. Although it took more time, it meant that the product was healthy when it really started to grow.

I’d like to mention a statistic: in August this year, WeChat daily active users surpassed one billion.

This is probably the first product in China to exceed one billion DAU.

When it exceeded one billion DAU, our team didn’t celebrate. Everyone felt reaching one billion was just a matter of time. But when I saw the data, I was touched.

I’m very happy that I can accompany a product for eight years. Moreover, I’ve always seen myself as a product manager, not a business manager. I believe this is necessary, because a good product requires a certain degree of ‘dictatorship’, otherwise it will embody all sorts of different, conflicting opinions and its personality will become fragmented.

Hence this year’s Open Class is different from that of previous years. I’m more willing to explain our thinking behind different aspects of WeChat.

I believe it’ll be useful for everyone to understand WeChat.

Driving Forces

WeChat’s driving force can be summarized into two points… First, create a good tool that can keep up with the times… The second driving force is “let creators cultivate value”.

Driving force stems from a deep understanding and expectation of ourselves. It is powerful. It can last very long, overcoming many obstacles.

WeChat’s driving force can be summarized into two points.

First, create a good tool that can keep up with the times.

It’s because I’m passionate about tool-like products, that I even coded and created a product like Foxmail to fulfill my desire for creation. In order to create an excellent product, I think it is good to be obsessed about it. WeChat’s foundation is to be an excellent tool.

I’m very clear that in the current business environment, many users are actually very tolerant of forced experiences, even though they are sometimes terrible.

Many people think that it is normal, for example, opening their apps and seeing ads, or receiving system push notifications with marketing messages, being lured into clicking on links – this is all normal now.

There are many examples like this. If we go back to the SMS era, everyone’s spam messages exceeded their actual messages. What’s scary is not this huge amount of spam messages, what’s scary is users thinking this is normal.

Once you know what’s a good product and what’s a bad product, you won’t accept a lousy feature being forced upon users.

Hence WeChat makes it a point to create a good tool, a tool that can accompany users for many years. To users, the tool is like an old friend.

Whether or not it’s keeping up with the times depends on the user, not us. WeChat is a tool and thus needs to earn the recognition of our users.

Everyone knows WeChat has a slogan: “WeChat is a lifestyle”.

“Why is it ‘a’ lifestyle and not ‘a kind of’ lifestyle?” At that time when my colleague asked me, I couldn’t explain it clearly. But I know if it is “a kind of” lifestyle, it is just a typical motto, not suitable to be used as a slogan, and people won’t remember it.

It must be a lifestyle that belongs to WeChat only, a unique statement. At that time, WeChat didn’t cover so many aspects of life; WeChat Pay didn’t even exist. But in hindsight, it really represented a lifestyle.

This is a lifestyle. Actually, I have a nagging thought, WeChat will penetrate every person’s daily life. It should change as trends change, or even lead those trends. However, I’m not sure how WeChat will penetrate users’ daily lives.

Which aspect of life? If we don’t set it as a lifestyle, and we label it as a communication tool, it will be too superficial and will limit our potential. Thinking about it now, suggesting at that time to call it a “lifestyle” was very bold.

Now we can see that WeChat has entered different aspects of people’s lives: group chats, Moments, Red Packets, Official Accounts, Mini Programs, and so on. I feel that WeChat has achieved the dream of being “a lifestyle”.

The second driving force is “let creators cultivate value”.

We released Official Accounts in a very early version of WeChat. This was an innovation by WeChat. At that time our thought was, “If WeChat replaces SMS, then what are the market’s needs in the SMS era?” Many services had to use SMS to communicate with their users. Since we replaced SMS, we needed to provide something of similar capabilities to serve the market’s needs.

But I know that since SMS and email can be sent en-mass to many users with no way to control it, this produced some well-known negative side effects. So, we thought, if WeChat chooses to provide a subscriptions model, it’d help protect users from being harassed or cheated.

It also would allow services to control who to target with what message. This would help bridge the gap between customers and businesses. I still remember at that time we were so excited when we came up with the idea, that we messaged Pony saying this mechanism will be immensely powerful. Pony asked, “What about the spam messages?” And I said that by nature there would be no spam because users are the ones subscribing to the services they want to receive messages from.

So, after the Official Accounts Platform got started, and we expanded from connecting people to connecting services, WeChat began to reflect the advantages of being a platform, later including Mini Programs.

Making a platform requires a driving force. Without that, we may have just been reduced into being a service provider platform. Many wouldn’t have heard of the platform.

When a platform only focuses on pursuing its own benefits, I believe it’s short-sighted, it won’t last. When a platform can benefit the people, then it’ll take on a life of its own.

When we were creating Official Accounts, we would think: “What problems do we want to help people solve?” Of course, it was the problem and disadvantages of information asymmetry.

Let’s use an example: traditional business all depends on renting a store located in an area with high foot traffic; but with the internet, location is no longer your advantage, your service is your advantage. Then, we wanted to help those people and businesses that truly offer good service to find and reach out to potential customers.

At that time, the most popularly used case study was about helping a blind person with no technical ability to find customers. They should have an Official Account, which their customers can share with their friends. So, we decided to make the slogan for Official Accounts “Everyone, no matter how small, can have their own brand”. Their Official Account is their brand. Moreover, the brand is based on attention and recognition.

Our driving force at this time was to let people who create value cultivate value for other users. Because WeChat breaks down the barrier brought by information asymmetry, users can get better quality services. Then, people will think of more solutions to provide services that can match user demand and expectations for quality – therein lies the key driving force of Official Accounts.

The same applied later when we created Mini Programs. If we cannot allow outstanding Mini Program developers to reap more benefits in return, this ecosystem would only grow a little – what would the point be?

This year, I actually saw a real-life example of that case study. A friend posted on WeChat Moments that he discovered many blind massage therapists using Mini Programs to find customers. Seeing this filled me with joy. This was the exact situation that we had originally brought up as what we wanted to achieve.

Much of WeChat’s innovation stems from these two driving forces. From a professional standpoint, everyone may think that this was a prediction of the future.

But I believe all predictions in the business stem, most importantly, from driving forces. Or we can say, a good product has its own mission.

I’m grateful that all these years, WeChat’s driving force has never changed.

Making the Best Tool vs Capturing Users’ Time

These two years, the goal of apps across the industry has been to try their best to keep users in their app as long as possible. This goes against my beliefs…. The primary goal for technology should be helping humankind increase efficiency.

In relation to the two driving forces, I will go a bit in-depth about “making the best tool”.

Keeping to this principle, when I’ve observed many products in our industry, I’ve often felt that there are many things that go against my beliefs.

For example, these two years, the goal of apps across the industry has been to try their best to keep users in their app as long as possible. This goes against my beliefs.

A user only has limited time in a day, so this goal of maximizing user time in-app is secondary. The primary goal for technology should be helping humankind increase efficiency.

For example, a good communication tool must be highly efficient. That’s why WeChat does not have a message status, the reason being that the most efficient method is to just send and go. You don’t have to worry whether the message was sent or not, whether if it was successfully sent or successfully received, and even worry about whether or not there is a network issue.

If it’s an information search tool, it should help users obtain the most useful information in the shortest time. If it’s a kind of entertainment product, users staying a bit longer is not an issue. Like when I watch a TV series, I’ll spend a lot of my time watching it. Of course, though, it shouldn’t endlessly add episodes to the series just to capture more of my time.

Here’s an interesting phenomenon: video software now allows users to change the speed of the video, with many users choosing to watch the entire series at 2x speed. I guess this is a way for users to vote with their feet when they encounter TV series that drags on too long.

Speaking of user visit duration, it reminds me around the year 2000, when the internet had just come around, there was a popular term called ‘attention economics’.

Every websites’ goal was to grab as much attention as possible. Hence, we saw articles being divided into many pages — you read a little and clicked to the next page. This let websites add an advertisement on each page and increase their page views. This still happens now. There are also sites where users must click to expand the full text. This can get more clicks in the short term, but I don’t think this is a good product.

There’s another interesting example about user visit duration. From the day Moments was released until now, users’ friends have increased more and more.

Logically, content on Moments continues to increase as well. However, everyone fails to realize that even as users’ friends and content increase, everyone is still spending the same amount of time on Moments, about 30 minutes. When you have fewer friends, you read slowly and with more focus. When you have more friends, you browse faster.

Actually, users won’t divide their time based on the amount of content you have, but I believe this is reasonable. If we insist on extending their visit duration, we have many ways to do it.

However, this would only frustrate users, because their social interaction efficiency would decrease. If we insist on increasing the 30 minutes to an hour, it will only mean that efficiency will go down.

So, using the visit duration to evaluate an app strays away from my aspirations and understanding of the internet. Everyone only has 24 hours in a day. The mission of developers shouldn’t be to make users spend all their time on their phones aside from when they eat and sleep.

A few years ago, we had a version of WeChat with a statement encouraging users to put down their phones and meet their friends more in-person. This view has never changed.

WeChat will never make user in-app time our objective. Instead, we are more concerned with when our users communicate, post a picture, read an article, make a payment, or find a Mini Program, that they can do it as quickly and efficiently as possible – this is what makes the best tool.

We are willing to brainstorm thousands of ideas to increase this kind of efficiency. For example, I want to send a message to a specific person, but I can’t remember their name.

If we have a more intelligent solution to this, like an associative capability that helps you remember that specific person through people associated with them. That is, when your brain goes blank, we can help you find the information you want. This is something very important that we must work on.

WeChat Mini-Programs

Things that benefit oneself but not others do not last. Mini Programs’ mission is to allow creators to cultivate value and also benefit from it. Just because we have a lot of user traffic doesn’t mean we should occupy it ourselves…

If we didn’t decentralize it, Tencent could monopolize the platform with its own Mini Programs, but there would be no external developers. Sure, Tencent would benefit in the short term, but the platform ecosystem would not.

There are many companies making Mini Programs now. I think this is a good thing. Some of their APIs are like ours, but I’m not worried this will pose a threat to us. We may be doing the same thing, but besides our platform and team is different, the most important difference is: what is your driving force?

If you just want to borrow Mini Programs as a medium to profit from traffic, I’m not optimistic about it. Things that benefit oneself but not others do not last.

Let’s recap: Mini Programs’ mission is to allow creators to cultivate value and also benefit from it. Everything we do revolves around this mission. Just because we have a lot of user traffic doesn’t mean we should occupy it ourselves. We should let Mini Programs produce and reflect this value from user traffic.

A lot of people do not understand why Mini Programs are decentralized. If we didn’t decentralize it, Tencent could monopolize the platform with its own Mini Programs, but there would be no external developers. Sure, Tencent would benefit in the short term, but the platform ecosystem would not.

Even the companies that Tencent invests in should follow the platform rules like everyone else, otherwise, it wouldn’t be fair. I know everyone thinks that WeChat has been biased towards these companies. I have to say, maybe we haven’t done it well enough, but I believe from now on our team will dedicate more resources and manpower to ensure that we treat all companies equally.

Looking back at Mini Programs, from the very beginning to now it has been three years. It seems quite slow. I feel that Mini Programs has been our biggest challenge at WeChat, and also the biggest challenge in my own professional career because we never before tried announcing something that we hadn’t created yet.

The reason why we announced it before it was made is that we wanted to give everyone pressure such that we had no choice but to do it and absolutely had to complete it.

I remember clearly the night I announced that we were creating Mini Programs, I sat down with my team to discuss a topic: How many ways could our Mini Programs fail? I remember very clearly because we were talking about how difficult it would be instead of how bright its future would be.

Why did we insist on doing this [creating Mini Programs]? Because I believe this is an inevitable trend for the future. Because mobile apps need to all be downloaded and installed, and websites’ user experience is terrible. I spoke about this in a previous Open Class.

A lot of people don’t understand why websites’ user experience is terrible, just like they fail to understand why Official Accounts’ user experience is better than that of websites. WeChat used some methods to pre-define the experience, such as pre-defined layouts. This allows even amateurs to create an experience that is reasonably good to users.

Our conviction in making Mini Programs has been very strong. We haven’t been in a rush to finish it. It is an ecosystem, not a B2C function, hence we have been patient, nurturing it slowly. After our experience creating Official Accounts, we don’t want businesses to misuse Mini Programs as just a source of traffic to recklessly reap profits.

Even today, we can’t say that Mini Programs have been a complete success. I believe it still needs improving. To us, when we see that Mini Programs is getting closer and closer to our original aspirations, it means we are making progress.

We are seeing more traditional businesses using Mini Programs as a tool to connect to their customers, which has increased their business performance. These are excellent examples.

Mini Programs is not perfect yet, there are some things we have to work on.

We will continue to think of ways to make Mini Programs more accessible to users. But don’t expect us to do something that is aggressive and frustrating to users.

Social Interaction

Now, every day 750 million people go into Moments, with each person going in an average of over 10 times, so that’s a total of 10 billion times each day… But there are some negative side effects to this… If I could turn back time and had the chance to do Moments again, I would make the album private.

I’m going to talk about something I never have before. I have never talked about WeChat’s origins and its foundation, so I will be spending some time talking about WeChat’s social aspect.

What’s the origin of socialization? Of course, this doesn’t have a definite answer, everyone has their own ideas.

My idea is this:

Maybe in prehistoric times, socialization was born when humans started forming groups. The most important need for a person in a group is to not be excluded, hence people must talk with one another.

What do they talk about? Really they just boast about themselves to demonstrate their value to the group. This is my imagination about prehistoric interaction, everyone does not have to take it too seriously.

On Moments, everyone must post over-exaggerated pictures of themselves on vacation and stuff, this is really just a continuation of our habits from prehistoric times as users attempt to avoid being excluded.

Many years ago, I asked a question on Zhihu, “What is the essence of communication?” Actually, this is a question with no answer.

I later thought of an answer myself, but it’s by no means the correct, standard answer. It is “communication is the process of inculcating one’s self-image into another person’s mind.”

What does this mean? Everyone has an image of themselves they want people to accept. Every sentence we say, intentional or not, is said with the hope that others will accept this image of ourselves.

On the surface, we may be discussing something, but in actuality we want others to perceive and accept the image we try to portray ourselves as. Of course, this is just a convenient way for me to understand why we socialize, it’s not a scientific explanation.

Posting on Moments is just the process of portraying our desired image and placing it in our friends’ minds.

For example, everything you post is in hopes of convincing your friends to see you as a certain kind of person. It is an image you designed yourself. Hence, all your Moments posts are carefully selected to help craft this image.

So WeChat Moments is a place to portray your image.

Why does Moments encourage posting pictures instead of text? Writing text is a bit more complicated; writing a paragraph to post can be a difficult and frustrating process to many people. It’s especially difficult if it’s meant to portray our image. Posting a picture is much easier.

So, to help users portray their image, we created this tool to make it as easy as taking a photo. But for those people who are more conscious, they will ask themselves: What kind of image of myself do I want to portray?

Many years ago, whenever I posted on Weibo, I would ask myself: “What do you want to portray?” Most of the time when I asked myself this question, I’d give up and delete what I had already begun to draft. Of course, most people aren’t like this. The bigger one’s weakness, the more one wants to post on Moments to strengthen that weakness. This is normally the thought process.

But there are some negative side effects to this.

If you post a few more pictures of yourself on vacation, everyone will think you are always on vacation. If you post some pictures of yourself working overtime, everyone will think you are always working overtime. This tool may be useful to portray your image, but it can go overboard. It’s difficult for you to portray your reality.

Just like how we aren’t always happy or unhappy at every moment. But if your post says you are happy, everyone tends to think you are always happy. A lot of what we see on Moments are the best images portrayed by people, whereas the bad parts are not included.

We don’t have a tool that records our day truthfully.

This is why we decided to create the short-video status feature called “Time Capsule”.

Actually, I want to say a bit more about Moments. Many people say they want to escape Moments or say they don’t really use Moments anymore. But in fact this is an illusion that everyone in the internet world sees.

Everyone often takes the situation of people around them and makes it the situation of people all over the world. But it’s not like that. Because Moments is socialization, how can one escape from socialization? Even if you post less, you will still check it, like posts, and comment. It’s an act of socialization.

There is a statistic I want to announce here. Since launch, the daily number of people going into Moments has always been increasing, and it doesn’t show signs of slowing down. Now, every day 750 million people go into Moments, with each person going in an average of over 10 times, so that is a total of 10 billion times each day.

I feel that Moments is the backbone of online socialization for Chinese people. It’s possible that it is China’s most effective social tool. It currently has so many users and visits every day. It feels like checking Moments is a routine task to complete one’s daily requirement for socialization.

Maybe a user didn’t leave their house all day, but this didn’t prevent them from socializing. Even if you don’t post on Moments, you’ll still check it; you are socializing by liking and commenting.

All the product managers here, let’s analyze: Why does Moments have so many users? Even though these users have grown up and maybe their environments have changed, they still use Moments. Many users’ methods of social interaction haven’t changed for many years.

Just like my idea about prehistoric people, socialization hasn’t changed, or we should say that the need for socialization hasn’t changed. Online socialization is just a reflection of offline socialization.

If there was no internet, whenever we wanted social interaction we would get together for a big lunch or attend some party, where we would then say ‘hi’ to familiar friends, but it wouldn’t  be very efficient because the requirements of time and location create restrictions.

What’s the basic essence of Moments? Really, Moments created a new location for socialization. I’d compare it to a town square.

You spend half an hour every day walking through the town square. While walking, you see groups of people chatting and discussing different things as you pass. You know these people, and you can stop and join their discussion. You also realize that you know every single person in the group.

You can go over to say ‘hi’ or join them for a while. You can then turn around and leave, walk to another group to join or not join any at all; or you can simply say ‘hi’, like what they say, and leave. This way, when you’ve finished browsing Moments, you’ve finished walking around the town square.

I want to emphasize this design – in Moments, you can only see the activity of mutual friends. This means that the discussions you engage in involve friends who all know each other. This makes socialization more fulfilling as there are more friends engaging in meaningful interactions.

Within half an hour, you’ve seen many friends, seen many topics they are discussing and joined them in some discussions. You’ve already completed your online socialization need for the day. Such an efficient socialization tool like this, of course, you’d find it hard to leave it.

However, Moments has a weakness. It’s caused users to want to leave Moments. Because it is like a town square when you like or comment on something it’s akin to shouting in the town square. Everyone can hear you. This creates more stress for users. Moreover, as your friend list increases, the stress becomes greater.

When Moments was launched, I posted over ten photos every day. Now, I post once every few months. Many people feel this kind of stress when posting on Moments.

Hence, this is a problem that we have been constantly thinking about. Although Moments is an efficient socialization tool, it can be stressful when it comes to expressing oneself.

So we need to think of a new way to help users be braver about expressing themselves.

But here is a dilemma. If we want users to communicate freely at the lowest stress level possible, the only situation is talking to oneself.

But when you talk to yourself there are no responses from your friends, meaning there is no social benefit. The more people the user talks to, the greater the social benefit, but the stress is also greater. That’s why many people set their Moments posts to only be visible to friends for 3 days so that they feel less stress.

A lot of people ask me, why would one set their Moments visibility to three days? Won’t their friends be upset? Let me briefly explain.

Normally, as a toggle in privacy settings, not many people would use it. Product developers all know, the majority of users are rather lazy. But actually this Moments privacy setting is used by many users – over 100 million users have set their Moments visibility to three days.

If I could turn back time and had the chance to do Moments again, I’d make the album private. From a product standpoint, Moments and its album can be entirely separated. A photo could be stored in your album as a memento to look back at later, or it could also be posted and displayed on Moments. It was a mistake made during development to combine them.

So we encourage users to set their Moments visibility to three days. Hopefully, this will alleviate some stress and allow them to bravely post on Moments. Users don’t have to worry about friends digging into their history later.

If a user insists on displaying their history, they should have something else to display it, like for carefully selected and prepared photos, instead of using their status posts on the Moments timeline as a way to display their history.

Number of User

WeChat has never said that its objective is to increase the number of users. If we wanted to, we could have done it a few years ago and reached the one billion DAU milestone even earlier… The number of users is always limited, service is unlimited…  In times like this, innovation is the only solution for the future… So, finding what kind of needs users will have in the future is our objective as we sit at one billion users.

WeChat has reached one billion daily active users. We’ve always felt that the number of users we have is not very important. But people always bring up user numbers to determine their position and the gap they must improve on. But I don’t feel this is right.

WeChat has never said that its objective is to increase the number of users. If we wanted to, we could have done it a few years ago and reached the one billion DAU milestone even earlier. But that’s not how it is. Our number of users grows organically. In my view, what we should consider is what kind of services we want to provide to our users – this is a more important question.

The number of users is always limited, service is unlimited. Previously, an ‘era’ was basically ten years long, but since the coming of the internet era and the mobile internet era, I feel that an era is now only three to five years. This means that the change of eras is happening faster than ever, new demands are coming faster. In times like this, innovation is the only solution for the future.

With these constant and rapid changes, we don’t really need to be concerned about how many more users we can get. We are focused on how to meet future needs. So, finding what kind of needs users will have in the future is our objective as we sit at one billion users.

We realize that WeChat as an app contains many, many features, making it look simple. But there’s a limit to how much it can hold, so our next step will revolve around different apps, trying different services that are related to WeChat. Just like the app WeRead, if we really needed to insert books into WeChat, it seems like we could do it. But making it a standalone app with its own development and growth, this seems more appropriate.

The Future

At this momentous juncture of eight years and one billion users, our team is thinking of how WeChat is going to take on the next eight years of challenges. These challenges will not come from competitors, but rather will stem from users. Users will continue to change every year. We’ll face new users and new needs.

No matter what we do to respond to these new needs, if we follow our key driving forces “making the best tool” and “letting value creators cultivate value”, I don’t think we’ll deviate too much.

Sometimes when we look back on the changes brought about by WeChat over the years, we feel a sense of accomplishment. A lot of time, people will ask me, how are we different from others? I think that one difference is this: when we’re thinking of a problem or what to do, we often ask ourselves, what’s the meaning of doing this?

Of course, I know many teams won’t ask about meaning when they do things, they only ask, “What is our KPI?” Honestly, since the beginning, the WeChat team has never worked towards KPI before. This doesn’t impede us from constantly improving. Just like Mini Programs, if we had used KPI, we wouldn’t know what KPI to set because there was no such thing. If we had set a KPI, everyone wouldn’t know what to do.

Everyone in our team has developed a habit of ensuring every feature and every service has a meaning or a dream behind it. If a feature is made for just gaining traffic, and it doesn’t provide value to users, then it’ll have problems, it won’t last. We think about the meaning behind every detail of everything we do. This is a reason we’ve been able to make it to this day, and it helped us make many right decisions.

What is WeChat’s dream? I said it before. From a user standpoint, it’s to become the best tool for users. From a platform standpoint, it’s to create a marketplace that allows value creators to produce value for other users.

Between a high, solid wall and an egg that breaks against it, it seems like we always stand by the egg. If you make something so big that you interfere with users and provide no value, WeChat will limit you; if you’ve just started and aspire to provide value to users, WeChat will support you.

So, we don’t really think about our competitors. WeChat also doesn’t have competition, no need to pair us with competitors. If there is a competitor, it will be ourselves, it will be whether our organization can keep up as time changes.

WeChat is not anxious. No need to say that we are anxious whenever we do something. You don’t have to impose your anxiety on WeChat.

For me, I’m very grateful, and I feel I’m very lucky. As a product manager, I can lead this team that has created a product used by one billion users. It gives me a sense of accomplishment. But, I feel even luckier that over this process, I’ve been able to imbue my perspective of the world into the product, making it a part of the product’s value. This is even rarer.

There’s a phrase I like, a line from a movie. I want to use it to conclude today’s speech.

“Hope is a good thing, maybe the best of things.” Many people know this phrase. I often think if WeChat can’t give our users even a little bit of hope, then we can’t judge whether what we’re doing is right or wrong. So, this is also how we measure ourselves.

Thank you, everyone!

Alipay announced yesterday it will start charging for its service of credit card repayment from 26 March. Alipay users can still enjoy the service for free for up to 2,000 yuan credit card repayment every month.

Alipay will charge 0.1% service fee for credit card repayments service for the monthly amount over 2,000 yuan with a minimum of 10 cents per transaction. Its members can increase the 2,000 free quota with their rebate points.

The decision is due to the increasing comprehensive operating costs of credit card repayment services according to Alipay. WeChat Pay made a similar announcement last July. A common understanding regarding the cost is the fee charged by banks in China for using the repayment channels.

Quick case study: SPD Bank’s credit card WeChat mini-program

Wang Pengbo, a senior analyst of Analysys, said that “the behavior of third-party payment institutions charging users for the increase in comprehensive costs is related to the direct deposit and the centralized deposit of reserves. Because the regulators implement strong supervision, after sorting out the third-party payment industry, and adding to the central bank’s rectification of the custody channels, the channel fees for the three-party payment will increase. “

The reserve fund is centrally deposited. In the past, the reserve fund was a bargaining chip between the third-party payment institution and the bank. But now it is gone, and the cost of the bank’s own capital is also increasing, so the bank will pass the cost to the third-parties by increasing the channel cost.

It won’t affect most users who don’t spend on huge credits every month. For those who care about the cost can use some online banking free services for credit card repayments. Some are utilizing Alipay’s announcement as an opportunity to offer free services too such as UnionPay’s Flashpay, U51, Suning Finance, etc. You can get an overview of China’s digital payment ecosystems here.

Huawei turning its smartphones to POS machines

Chinese consumers were expected to contribute 40% sales to the global luxury goods market and hence drive 75% of this market’s growth.

58% of luxury goods consumers were the youthful population. 58% of them located at tier-2, tier-3, and lower-tier cities. Mobile occupied 54% of luxury goods consumers’ attention. 58% of consumers prefer collecting information online and buy luxury goods through offline channels.

China’s personal luxury goods market is going to grow at a compound annual growth rate of 6%. Retail sales of luxury goods in China reached €105 billion (US$120.41 bn) in 2017, which was estimated to hit €162 billion (US$185.77 bn) by 2024, accounting for roughly 40% of the global luxury goods market, according to a joint report by BCG and Tencent.

58% of luxury goods consumers were the youthful population who ages between 18 and 30 years. 71% of them at least held bachelor degrees. 71% of them were female.

58% of them located at tier-2, tier-3, and lower-tier cities.

They were deeply influenced by digitalization and obtained a variety of news from smartphones. On average, they spent 87 minutes on WeChat or QQ, 45 minutes on mobile games, 75 minutes on video, news, and music.

The consumption path of luxury goods was highly digital and fragmented. They would collect relative information from various social media and online platforms once they find favorite luxury goods.

After that, they tend to buy the products via a set of channels not just limited to brick-and-mortar, if that works, such as Daigou (a freelance cross-border shopping agent), online mall, overseas e-commerce platforms, brand’s official accounts, and social media.

Mobile occupied 54% of luxury goods consumers’ attention. To break it down, KOL (WeChat and Weibo) for 12%, brands’ social accounts for 12%, brands’ official website/app/mini-programs for 11%, brands’ digital ads for 8%, third-party e-commerce platforms for 7%, and online word-of-mouth for 4%.

Tencent-affiliated mobile apps took 50% of users’ mobile usage time. By comparison, Facebook accounted for just 22% of  American internet users’ mobile usage time.

KOL (Key Opinion Leader) played an essential role in reaching users. On average, every account of the top 30 online celebrities attracted 3.2% of consumers’ attention. Brands’ official accounts or mini-programs had its way to interact with consumers.

The average page view of articles could reach 20,000. Furthermore, the page views of some good content could occasionally exceed 100,000.

Speaking of purchasing method, 58% of consumers prefer collecting information online and buy it through offline channels.

16% of consumers in tier-3 & lower-tier cities bought luxury goods online while that was 8% in tier-1 cities and 9% in tier-2 cities. On the other hand, 51% of consumers would make some comparisons online and go to nearby higher-tier cities to buy it.

Though platform shopping is still the mainstream, social shopping has been rising quickly in the luxury goods market. 11% of Chinese consumers bought luxury goods through social shopping channels like WeChat while that was just 2% in Germany, America, and Europe.

Continue to read China’s luxury consumption trends in the new retail era

Momo, one of the top mobile social networking platform in China, announced total net revenues of $494.3 million in Q2 2018 with an increase of 58% YoY, according to its unaudited financial results.

Net income attributable to Momo increased to $117.8 million in the second quarter of 2018 from $60.8 million in the same period last year. Non-GAAP net income attributable to Momo increased 90% to $140.2 million from $73.8 million in Q2 2017.

Live video service revenues continued its growth momentum and the total live video service revenues were $411.0 million in Q2 2018 (83% of total), an increase of 58% from $259.4 million during Q2 2017. The rapid growth in live video revenues was contributed by the increase in the quarterly paying users, which was 4.6 million for Q2 2018, as well as, the increase in the average revenues per paying user per quarter.

Momo’s Monthly Active Users (“MAU”) were 108.0 million in June 2018, compared to 91.3 million in June 2017. Total paying users of its live video service and value-added service, including 3.1 million paying users of Tantan in June 2018, were 11.6 million for Q2 2018, compared to 7.1 million in Q2 2017.

China social media users compared: Weibo vs WeChat vs Momo

Not long after Facebook’s Hangzhou subsidiary launch, Google was reported to be planning a launch of a censored search engine in China. A poll was created on Weibo asking “if Google returns to China, which will you choose between Google and Baidu?”. 72.8% voted for Google.

Google released its first WeChat Mini-Programs “Guess My Sketch” in July 2018, which went viral on WeChat Moments for a while.

Later on August 6, the state-run People’s Daily posted an article on its Twitter and Facebook accounts that Google is welcome to return to the mainland China but it must comply with local laws.

Robin Li Yanhong, chairman and CEO of Baidu, commented on his WeChat Moments that Baidu has the confidence to defeat Google again if it returns.

China has seen the internet being developed at an unprecedented speed, with the number of mobile internet users more than doubled, from 303 million in 2010 to over 800 million in 2018. Baidu has kept the leading position in the search engines market for years.

While Google kept taking over 90% shares of global search market for years running, with Baidu only took less than 2%.

It’s a big challenge and question mark whether Google makes its search engine available in China again. Its workers are already protesting its censored search engine plans for China. And, Google is not close to launching a search product in China according to its CEO.

A survey might not tell what will really happen if Google did return to China with a search product. But the poll on Weibo by Sina Jiangsu account has been deleted.

Find out Mobile Search Engine Market in China