A recent unveiling at the “2024 WeChat Open Class PRO” has shone a light on its video account e-commerce business, demonstrating a nearly threefold increase in Gross Merchandise Value (GMV) in 2023. This growth is complemented by a more than 244% rise in order volume and an approximately 300% increase in product offerings.

Industry insiders estimate that live commerce via WeChat’s video accounts generated a GMV between 40 to 50 billion yuan in 2022. Following the reported threefold growth, the 2023 figures are projected to hit between 120 and 150 billion yuan.

Li Chengdong, an e-commerce analyst and founder of Dolphin Think Tank, acknowledges the impressive growth rates of video account e-commerce in 2023. However, he notes the sector’s scale remains modest compared to giants like Alibaba, JD.com, and Pinduoduo, whose GMVs have breached the trillion yuan mark, alongside emerging live commerce platforms like Douyin and Kuaishou.

A significant development is Tencent’s integration of video account e-commerce with its WeChat advertising system, allowing for video account livestreams to be promoted within Moments. This new feature opens up fresh avenues for traffic acquisition, potentially boosting conversion rates by shortening the consumer journey from ad click to purchase.

The integration extends beyond advertising, as various e-commerce formats within the WeChat ecosystem, such as social commerce and mini-program commerce, are linking up with video account e-commerce. This strategic move positions video accounts as a foundational infrastructure within WeChat e-commerce, facilitating a seamless flow of both public and private domain traffic within the social network.

WeChat’s new social e-commerce platform integrates Shopping Accounts

Launched in 2020 as a counter to Douyin and Kuaishou, WeChat’s video accounts rapidly developed a comprehensive suite of short video functionalities. By integrating with other WeChat services like Official Accounts, Search, and Mini Programs, video accounts have become a crucial part of the ecosystem.

The platform’s commercial exploration, especially in live commerce, started in earnest around the first half of 2021. According to Yu Haijun, founder and general manager of Guangzhou Zhi Ling Network Science and Technology Co., Ltd., early adopters included notable brands drawn by the platform’s promise of a refined operational framework focusing on user experience.

Tencent’s Q3 2023 earnings report highlighted a more than 50% year-on-year increase in total video account views, with WeChat’s video account content ecosystem and creator base continuing to expand. Partnering platforms like Weimob reported a 47.6% increase in video account merchants and a 50.5% increase in their GMV in the first half of 2023, further underscoring the growing importance of video accounts in the e-commerce landscape.

Despite these advances, some insiders express dissatisfaction with the growth rate, pointing to a relatively low ad load rate in video content compared to other platforms. This limitation suggests a need for increased user engagement and refined recommendation algorithms to boost traffic and conversion rates.

The integration of WeChat Moments ads with video account commerce represents a deepening of video accounts’ role within Tencent’s ecosystem, offering merchants enhanced promotional opportunities and streamlined customer purchase pathways. However, achieving a significant uplift in conversion rates through this integration will require meticulous data alignment and robust cross-departmental collaboration.

As Tencent doubles down on its investment in video account and live commerce, the future of WeChat e-commerce hinges on the harmonious fusion of advertising and transactional capabilities, underscoring the platform’s commitment to enriching its commercial ecosystem.

WeChat expanding e-commerce reach with mini program integration on JD, Xiaohongshu

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

In 2022, the total views of the original content on WeChat Channel (video account) increased by 350% year on year, and the scale of live broadcast increased by 300%, according to WeChat’s data released on 10 January 2023.

The commercial potential of live video broadcasting continues to be released, and the corresponding e-commerce sales increased by more than eight times year on year.

In 2022, the number of daily active creators and the average number of videos uploaded by the video account increased by more than 100% year on year, the number of creators with at least 10,000 fans increased by 308%.

The number of video account earners increased by 101%, and the total income of live video anchors increased by 447%.

Live video GMV increased by more than 8 times year on year in 2022, and the average selling price exceeded 200 yuan. Among them, the top three categories of consumption are covered by clothing, food, and beauty.

The monthly active users of WeChat Search have increased to 800 million, and the total search volume increased by 54%. Mini Programs are widely used in scenic spots, hotels, airports, and other fields, and the number of WeChat Mini Programs has increased by 183%.

WeChat Search contributed to 27% of Official Account follower growth and 20% of Mini Program’s new daily active users. Its contribution to WeChat Channel follower growth has increased by 120%.

WeChat MAU

Over 330 million of WeChat’s (known as Weixin in China) 1.2883 billion monthly active users use video calling. 780 million users are on the social networking section WeChat Moments and 120 million publish updates. The content network WeChat Official Account has 360 million users.

WeChat has evolved from an instant messaging app to a service meeting the digital needs of over 1.27 billion MAU in Q4 2021. Each day, more than 120 million active users post in social networking Moments, 360 million users read Official Accounts articles, and 500 million users access Mini Programs (Q1 2022) daily.

For Q4 2021, WeChat daily active advertisers expanded by over 30% year-on-year. Over one-third of Moments’ advertising revenue was generated from advertisements using Mini Programs as landing pages and advertisements connecting users to customer service representatives via WeCom.

WeChat Video Accounts’ time spent per user and total video views more than doubled year-on-year as Tencent enriched content diversity and enhanced the product experience.

WeChat Mini Programs

The daily active users on WeChat Mini Programs reached 450 million according to WeChat official data in January 2022. The transaction volume of catering, tourism, and retail increased by 100% year-on-year. Mini Program DAU reached 500 million (Q1 2022).

The number of Mini Program developers has exceeded 3 million.

In 2020, the daily active users of WeChat Mini Programs exceeded 400 million, according to its official data shared at its annual event WeChat Public Lecture.

The number of mini programs used per user increased by 25%, the average transaction value per user grew by 67%, the number of programs with transactions increased by 68%, and the annual transaction volume of more than doubled in 2020.

In 2020, more than 100 million people purchased in shopping malls and department stores on WeChat Mini Programs. With the help of mini program pre-sale + offline self pick-up mode, more than 300 million users purchased fresh fruits and vegetables.

WeChat Mini Programs overview

WeChat Games

In 2020, the commercial realization of WeChat mini games increased by 20%.

Last year, the proportion of male and female users in the distribution of mini games accounted for 50% respectively. 40% of the users in the first and second-tier cities, and 65% of the users aged 30 and above.

Compared with 2019, the per capita game duration of mini games increased by 50%, and the average number of games played increased by 20% in 2020.

China game live streaming revenues to double by 2021

WeChat Search

The number of monthly active users of WeChat search has reached 700 million according to WeChat official data released in January 2022.

WeChat search staff said that in the mobile Internet era, search should not be limited by the search box, but need to be accessible by the touch. Users can search while chatting.

WeChat search will screen out the high-quality content of WeChat and produce a more accurate connection with users.

In the future, it can expand the search scope to the whole internet-based the needs of users. The search results are currently mostly provided by WeChat Official Account and Sogou.

Top search trends in China

WeChat Pay

In January 2022, WeChat shared the latest progress on WeChat Pay:

• 23 thousand monthly service providers
• Over 10 million merchants
• More than 1800 banks and Payment institutions
• 23 thousand monthly merchants
• In the next three years, WeChat Pay will continue to carry out digital upgrading of WeStore, with a planned investment of more than 10 billion yuan

In 2020, Zhifufen, a credit score on WeChat Pay, saw more than 240 million users. It boosted the conversion rate of e-commerce orders by 14% and the repurchase rate of retail merchants by 73%.

In 2021, WeChat mini stores and Zhuanzhuan (a secondhand-goods marketplace) will integrate Zhifufen.

In the e-commerce industry, WeChat Pay’s Zhifufen enables post-payment after receiving the delivery and faster refund. Users can quickly receive a refund after submitting return logistics information.

As of January 2022, more than 50% of users have activated Zhifufen, whose solutions cover more than 3000 industries. WeChat Pay unit cooperates with the e-commerce industry on “buy first and pay later”, which has been used by more than 100 million users.

Zhifufen also announced the launch of audio and video members’ services such as “watch first and pay later”, which helped solve the problems that bothered audio/music and video users to deduct fees in advance and forget to terminate their contracts.

China’s online payment users penetration reaching 86%

Enterprise version of WeChat: WeCom

In 2020, there were 80,000 enterprise WeChat partners, with a year-on-year growth of 400%. 

Acquire, convert, and retain customers through WeChat Ads + WeChat Work (WeCom)

According to WeChat, search ads will support six promotion goals, including WeChat Official Account promotion, sales lead collection, products promotion, branding events promotion, app promotion, and WeChat Mini Games promotion.

It supports three landing page types, namely, native promotion page, WeChat Mini Program, and custom link. And, based on the search ability of WeChat, WeChat search advertising can support the sale of brand keywords, keywords words, generic keywords, and generic keywords.

At present, Tencent’s mobile search advertising scenarios mainly include WeChat Search and QQ Browser search. In these scenarios, advertisers can do brand and performance marketing.

Since the launch of search feature on WeChat in 2017, it has been at the top of the main interface.

However, after five years of iteration, it has now become a “global search” that includes WeChat Moments, Official Account, and Mini Programs from the early days when it could only search local chat records and contacts.

At the same time, the search scope has also expanded to all content and services related to search queries in WeChat.

WeChat Mini Programs Insights

60% of Generation Z said that “the way brands communicate with me” plays a major role in their purchase decisions, according to a survey conducted by Tencent.

“Reliable” & “honest” are the basic requirements for brand communication, Gen-Zs focus more on young lifestyles and surprises while older generations value more “professionalism”.

69% of Gen-Zs are willing to pay for products from brands that they identify themselves with and those who can help them “decorate” their personalities. Brands have become a way for young generations to identify themselves.

Compared with previous generations, Gen-Zs tend to buy more products with specific brand images to help build their own personal image.

Building characteristic communities

Private domain channels have become the main transaction scenario, quality services are highly valued.

61% of Generation Z have joined various types of shopping groups (14% brand membership group, 24% merchant membership group). These shopping groups have a major influence over their purchase decisions. Over 86% of those who joined these groups had purchasing intentions.

Apart from discounts, Gen-Zs also expect more soft experiences, in particular acquiring knowledge (44%), having readily available help (38%), and experiencing privileged treatments, more compared with older generations.

The effectiveness of discount promotions is fading; social media content has become the new major form of influence.

Compared with older generations, promotions through discounts are having less effect on the willingness to buy of the younger generation (Generation Z 44%; group born in 90-95 51%; group born in the 80s 53%).

Private domain channels are effectively capturing Generation Z’s attention. They often see the same brand repeatedly (28%), while social interaction can effectively encourage purchases.

Gen-Zs mainly get influenced by their friends (31%), acquaintances (25%), WeChat Moments (21%), KOLs (21%) through social media.

Creating quality content

Generation Z is spending their attention across multiple fields.

Gen-Zs love to indulge themselves and also love to explore possibilities. Hobbies are their major focus point (88%). In addition, they also pay attention to acquiring new knowledge (41%), enriching real-life experiences (37%).

Compared with previous generations, they pay more attention to product/service reviews (26%) and motivational content (22%).

Celebrities are effective in promoting brand awareness. 35% of Generation Z said that collaborations between brands and celebrities have great influence over their purchase decisions.

Brands collaborating with IPs can also effectively capture Gen-Z’s attention. 42% of them said that this type of collaboration has significant influence over their purchasing decisions.

Chinese Gen-Zs attention insights 2021

The launch of Mini-Game “Jump” (Tiaoyitiao)  made WeChat Mini-Programs (or WeChat Apps) an instant hit in early 2018. On average, 230 million users used WeChat Mini-Programs daily, 60 million more than 2017. It is estimated to exceed 350 million by the end of 2019.

Read the latest insights on WeChat apps and mini programs here.

WeChat’s Mini-Programs has covered over more than 200 industries and provided over 100 billion times of requests. The sector of public services has been available among 362 prefecture-level cities and created over 500 billion commercial value. The total transactions were 600% more than a year ago.

At the end of 2018, over 2.3 million WeChat Mini-Programs has gone online since its launch in January 2017, which increased by nearly 300% from early 580 thousand.

In terms of the total number of applications, WeChat took less than two years to surpass Apple’s App Store, which held 2.1 million apps with ten years. Aldwx.com’s Mini-Programs data statistics platform forecasts the total mini-apps on WeChat will surpass 5 million by the end of 2019.

It is becoming more and more difficult for a mini-programs to get enlisted in the top 100 ranking on WeChat.

Tongcheng-eLong and Pinduoduo took the first two spots in December 2018. 34% of the top 100 mini-programs turned out to be newcomers. On average, 30% of the top 100 would be replaced by new ones every month in 2018.

All WeChat mini-programs attracted more than 8 billion yuan (US$1.19 billion) from 110 funding rounds led by 120 investment agencies. The figure was eight times higher than it was in 2017.

Offline retail and online shopping mini-programs were the two most popular areas, which together accounted for nearly 70% of total funding.

9 Brands see great results from WeChat Mini Program live streaming campaigns

The advertising market of WeChat Mini-Programs is projected to grow from 5 billion yuan in 2018 to 20 billion yuan by 2019. The retail transactions made with WeChat ecosystem is to exceed 3 trillion yuan by 2019.

Following the launch of Nearby Mini-Programs feature, some leading retailers have successfully connected online marketing scenarios with offline. For example, IKEA WeChat Mini-Program saw 2.26 million visits in 24 hours on the day it went online.

On average, each user accesses WeChat Mini-Programs 4.25 times a day and spends 8.7 minutes on it. WeChat Mini-Programs has seen 600 million users as of the end of 2018. 72% of WeChat users have used WeChat Mini-Programs; 34% of whom used it frequently.

Business guide to WeChat Mini Program live streaming

WeChat Apps Usage Scenarios

53% of users use WeChat Mini-Programs mainly for temporary usage, 40% didn’t want to download mobile apps, 33% are automatically redirected to it after scanning QR code or clicking, and 31% just want to give a try.

User profile & usage preference

Among WeChat Mini-Programs users, 58% were men, 70% under 40 years old, 76% college educated or above, and 52% lived in tier-3 or lower tier cities.

42% of users played Mini-Games on WeChat, 39% used lifestyle services mini-programs, and 28% viewed news.

Specifically, those aged 17 years or younger mainly used WeChat Mini-Games. Users between 18 and 49 years old like to use Mini-Games and lifestyle service mini-programs. And, older users over 50 years old prefer news mini-programs, such as People’s Daily, and lifestyle service mini-programs.

Out of the 69 entry paths to access WeChat Mini-Programs, chatting, sharing, search, QR code, and shortcuts are most frequently used.

44% of users chose shortcuts from My Mini-Program in the main chat interface, 40% accessed from friends’ sharing (especially preferred by older users), and 35% entered through Official Account redirection.

Usage scenarios

53% of users use WeChat Mini-Programs mainly for temporary usage, 40% didn’t want to download mobile apps, 33% are automatically redirected to it after scanning QR code or clicking, and 31% just want to give a try.

Mini Program platforms in China: WeChat vs. Alibaba vs. Baidu

In the eyes of users, what makes WeChat Mini-Programs attractive is its ease to use (60%), no need to download apps (57%), no RAM usage (31%), and convenience to share with friends (28%).

71% of users have shared Mini-Programs to others because they deem it valuable (57%), they were asked by friends (22%), or attracted by rewards (15%).

56% shared practical tools for office collaboration, 48% shared interesting contents to create topics and enhance interactions, and 32% shared Mini-Games to show gaming advancement, earn red envelops, or invite someone to compete against themselves, etc.

30% of WeChat users have used Mini-Programs to shop. 43% of them are willing to download apps, 40% found the product offer was cheaper, and 34% were redirected from posts on WeChat Moments.

However, some program designs affect users’ experience while shopping, such as profit-provoking shares and useless vouchers.

Users’ impressions on WeChat Mini-Programs

For those not using WeChat Mini-Programs, 30% found it not easy to find the one they want as many users mainly get access from friends’ sharing. 25% found the interface choppy especially when they played Mini-Games. And, 23% are worried about a specific function because it seems only useful for temporary usage.

Overall, users hold positive impressions toward WeChat Mini-Programs. 44% of users thought Mini-Programs could replace apps for occasional usage, 36% believed it could help save the smartphone storage, and 32% only viewed it as a tool.

40% of users expect WeChat Mini-Programs to improve the interface switching fluency between chat and mini-programs. 37% expect more useful mini-programs. And, 37% wish it more active in interactions.

One-third of users are willing to download the app after they have a try with a mini-programs. However, most of the users are primarily provoked by profits to download the app.

WeChat’s new social e-commerce platform integrates Shopping Accounts

It connects the advertisers’ accounts with their WeChat Work (enterprise version of WeChat) accounts in order to better reach out to target groups and to increase customer management efficiency. This, in turn, can help improve customer services and conversion rates.

Making the connecting more efficient

The customer acquisition solution combining WeChat Advertising with WeChat Work can provide advertisers with tools for building landing pages, automatic deployment of multiple customer services and smart optimization.

These tools allow advertisers to acquire customers in a new way and significantly simplify the process of customer reach-out and acquisition. With these tools, advertisers can manage their traffic volume at a more granular level and maximize customer value.

Tools for Building Landing Pages

In order to help advertisers achieve high efficiency in reaching out and acquiring customers, new follow-widgets and pages for WeChat Work are added to the native promotion pages and landing pages.

In this way, WeChat users can quickly and easily follow the advertisers’ WeChat Work account. Advertisers can quickly achieve conversion and track their landing pages on WeChat Work based on the characteristics of the sector they are in.

Advertisers can monitor the number of their followers on their Tencent Ads back-end dashboard or WeChat Work in the process of advertising campaigns.

Automatic Deployment of Multiple Customer Service Staffs

This solution provides advertisers with the ability to automatically deploy customer service staff in order to make their services more efficient.

Advertisers can authorize WeChat Work via the Tool Box in the back-end. After authorization, they can add departments or employees within their organization to create customer service groups.

In the process of advertisement deployment, unique QR codes will be generated automatically for each customer service group. When the user scans the QR code, the system will automatically deploy a customer service staff within the group. The user can then enjoy 1-1 service after adding the operator as a friend on their WeChat.

Smart Optimization

With the new solution and oCPM bidding, it can help to optimize the “Follow WeChat Work customer service account” process, and in turn, can improve the conversion rates for customer acquisition.

Advertisers can rate the process and identify target groups that are more likely to follow, then optimize their advertisements with better conversions.

The new solution makes the process of customer acquisition significantly shorter and improves the conversion rate, allowing them to effectively lower the costs of customer acquisition.

In the meanwhile, the new process fully leverages on the connection between advertisers and users to build a direct communication channel between users and customer service operators. This can allow advertisers to offer users efficient, high-quality, and real-time services.

In addition, advertisers can achieve high-conversion and retain target users in their WeChat Work. These users can be reached and engaged again through WeChat Moments (WeChat’s social networking section) and community management (WeChat Group) in order to maximize their user value.

Currently, this solution supports an omnichannel deployment through WeChat Moments Ads, Official Account Ad, and Mini Program Ads.

Thanks to the 1.15 billion users, the highly efficient smart deployment technology, and the targeted reach ability, advertisers can retain users in their WeChat Work in a highly efficient way. They can then provide these users with more personalized professional service, increase the user value, and achieve business growth.

Helping eCommerce to Capture Long-term Value

With the increasing cost of traffic, the marketing-to-sales eCommerce business model starts to encounter its bottleneck. The difficulty to retain users, together with the long sales cycle for high premium products makes it very difficult to guide users with high-quality products and services in the long term.

Therefore, the operational advantage of being able to constantly increase user value proves to be of great value.

With the new process, users can follow the advertisers’ WeChat Work account and interact directly with customer service staff after seeing the ad, allowing higher effective and real-time services.

At the same time, advertisers can also introduce their products and content directly to users and keep them engaged. Combining with e-commerce promotions such as Double Eleven, advertisers can keep the push marketing content effective.

In addition, thanks to WeChat Work accounts’ ability to post on WeChat Moments, advertisers can timely update users on their products, professional knowledge, and maintain customer relationships in a non-intrusive way.

Targeting users with a certain level of knowledge on the products, advertisers can manage the community through groups in WeChat Work too.

In this way they can efficiently reach out to their customers afterward and provide them with more professional and customized services, therefore improving user engagement and increase their re-purchasing frequency.

Combining with the ability to connect to WeChat mini-programs, advertisers can integrate the online shopping function of the mini-programs into their WeChat Work, providing multiple service windows to customers.

A fashion brand ALFA has successfully reduced the time from acquisition to conversion and its user acquisition cost by 50% with the help of the new WeChat Advertising + WeChat Work solution.

At the same time, their operation efficiency increases significantly thanks to the integration of WeChat Moments and various promotional campaigns in WeChat community. Users in the WeChat groups are highly engaged and frequently re-purchase.

Helping the Travel Sector by Converting Target customers Online

Travel related products usually feature high price and long decision process. Its target customers have high conversion barriers and diverse needs. In order to boost conversion, advertisers from the travel sectors usually need 1-on-1 real-time communication to fulfill the customer’s different needs.

In the future, by converting offline customers online and integrating operation and management online, the travel sector can effectively benefit from this new solution.

In the new process, advertisers from the travel sector can exhibit their brands and promote their products on their native promotion page, in order to attract target customers and retain them on their WeChat Work accounts.

At the same time, with the personalized welcome display, advertisers can send useful content such as product information to their new users in a faster manner, encouraging better user engagement.

WeChat Work provides advertisers with a more convenient online communication tool, enabling real-time communication, and facilitating the delivery of personalized services.

Corporate images are clearer on the WeChat official account, effectively building trust and awareness of the brand. At the same time, advertisers can manage users based on various tags such as destination, travel time and wiliness, and provide users with more customized services.

They can also roll out different promotional information in the WeChat groups and constantly reach out and convert users, allowing a more granular service.

Yunnan Kunming Travel Agency, focusing on Leisure Family Trip, has significantly shortened leads engagement time and reduced their costs with the help of the new process and oCPM model.

Within the trial period, the cost of acquiring a new follower for WeChat Work is near the cost of their mature conversion funnels. In addition, it has profiled their users using tags and promoted limited time offers, group purchase offers in their WeChat groups in order to guide users and achieve better conversions.

With the help of WeChat group promotions, the deposit conversion rate increase by 60%.

The integration between WeChat Advertising and WeChat Work effectively could meet various advertisers’ needs, helping them shorten the acquisition path, reach out, and convert targeted audiences.

WeChat Work allows advertisers to get closer to their users and lower the conversion barrier. At the same time, WeChat Advertising helps advertisers to reach out, convert, and retain target users in multiple ways.

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.

WeChat recently launched the “Nearby Ads” marketing solution to solve marketing problems of small and medium-sized merchants. Nearby Ads can accurately display the advertisements in WeChat Moments to reach customers within the 3km distance.

As one of the most frequent social scenes for consumers, WeChat Moments has become an important way for everyone to receive and share information, and the influence of acquaintances on consumers has become more apparent.

Related: Top Mini-Programs in Oct 2019

Through “Nearby Ads”, merchants can place advertisements in WeChat Moments and get social scene exposure.

Through “Nearby Ads”, merchants can place advertisements to users near the store, which can accurately cover potential visitors to the store within 3 kilometers away from the storefront, and meet the marketing demands of SMEs with small budget, low cost, simple operation and continuous traffic to the store.

If the number of people covered is small, the system will automatically expand to 5 km area around the store.

In other words, if you pass through a nearby business who has placed nearby ads, it’s highly likely that you’ll see its ads in WeChat Moments.

The program offers three packages, with a minimum of 2,000 yuan (about US$285) for 30 days, 5,000 yuan for 90 days, or 9,000 yuan for 180 days. Officials claim that the number of reached audiences in Beijing and Shanghai can exceed 25,000, over 35,000 in key cities, and over 70,000 in other cities.

The ad placement is easier than regular ads on Tencent social networks. Merchants can start advertising through the mobile phone “WeChat Ad Assistant” Mini Program. After the merchant has been verified, the advertisement can be created in just 3 steps, saving time and effort.

Tencent’s social media platform WeChat’s monthly active users grew to 1.15 billion as of Q3 2019.

3 popular models of social e-commerce in China

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:

The monthly active users of WeChat (Weixin) reached 1,133 million during the second quarter of 2019, up 7% year-on-year according to Tencent’s announced financial results. Smart device MAU of QQ was 707 million.

WeChat Mini Programs ecosystem has become more vibrant, attracting more developers and service providers in Q2 2019. The number of medium-to-long-tail Mini Programs has more than doubled year-on-year while the nature of Mini Programs has become more diversified.

For example, content Mini Programs allow users to conveniently create, upload and share interesting videos, music, and news within WeChat. More than a dozen content Mini Programs have attained over 1 million DAU.

Key user metrics including time spent per user, daily messages and video uploads sustained solid year-on-year growth during the second quarter.

QQ active users in Q2 2019

QQ MAU grew slightly by 0.6% to 807.9 million in Q2 2019 while mobile QQ reached 706.7 million, down 0.3%. And, smart device MAU of social networking app QZone grew by 2% to 553.5 million.

Tencent launched a major version upgrade for Mobile QQ, which contributed to an increase in the number of daily messages and strengthened user engagement. To enrich the core chat experience, Tencent enhanced functionalities for messages in voice and video. To broaden user connections, Tencent upgraded algorithms to recommend new friends based on common interests and shared contacts.

Tencent also introduced QQ Mini Programs, with entertainment and games-related Mini Programs attaining particular popularity among QQ users.

Tencent’s social advertising revenues were RMB12.0 billion in Q2 2019, up 28% year-on-year, driven by increased inventories and impressions for products such as WeChat Moments and QQ KanDian. See Tencent performance summary here.

The monthly active users of China mobile internet dropped to 1.136 billion in June 2019 from 1.138 billion in March 2019 according to data from QuestMobile.

How Becky built its e-commerce success on WeChat

Vlog has become the new theme of user growth competition on several video platforms in China. One of the new players who recently joined the arena is iQiyi.

iQiyi, whose main content is professional copyright videos such as movies, TV dramas and variety shows, has recently launched a Vlog application called “iQiyi Suike”, which is obviously intended to share a piece of vlog market with the leaders such as Kwai, TikTok, Bilibili, Weibo, etc.

Vlog can be regarded as a kind of “video log” with popular themes of travel, food, pets and so on. 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.

Usually, it’s a little longer than the 15-second short video on TikTok, and a little shorter than the professional copyright content on iQiyi. It’s a little more delicate than the food broadcasting on Kwai.

In order to encourage users to create Vlogs, the design of iQiyi Suike App is very simple, with only three interfaces: main feed, publishing, and personal homepage. There is no search function for vloggers or content, nor any categories of bloggers or content. Users can get content by pulling down feed pages and triggering updates.

Several video platforms have started promoting vlog since the second half of 2018. Bilibili’s vlog content upload has increased by 7.6 times in April 2019, compared with April 2018, according to 36Kr.

This month, Kwai began to test the long video, limiting the video length to more than 57 seconds, less than 10 minutes. A month ago, its competitor TikTok also started internally testing videos of up to 15 minutes long. In April, TikTok opened the limit for 15 seconds longer short videos, and the original Vlog with a duration of more than 30 seconds can participate in the “Vlog Billion Incubation Plan”.

Xigua, another video platform under the same company Bytedance as TikTok, also launched their campaigns to support vlogger this month. In comparison, Weibo’s vlogger growth mainly focuses on celebrities.

From Baidu search trend shown below, we can see a surge of interest in vlog since the second half of 2018:

However, Vlog’s current penetration rate is still very low. Nearly 60% of the users surveyed, conducted by Tencent’s Penguin Intelligence, have never heard of Vlog, and 70% of users claim to have never seen Vlog. Vlog users are currently mainly high-education female, concentrated in the first- and second-tier cities. The main platforms are Weibo and TikTok.

42% of Weibo Vlog users are post-95s (those born between 1995 and 2000) in Q1 2019, followed by post-90s (22%) and post-00s (20%), according to Eefung Software. The number of views on Weibo topic #VLOG# is 4.57 billion, and the number of users in related discussions is nearly five million.

Weibo Vloggers with over 1-million followers only account for 0.4% of the total; and, those with 10,000 or fewer followers account for 96%, according to Eefung data. The top topics covered by Weibo Vloggers are food, travel, celebrity, entertainment, and humor.

Marketing: Short Videos or Vlog?

Vlog contents, compared with seconds-length short videos on platforms like TikTok, are more difficult to create. Technical hindrance is not the real obstacle to its growth; video platforms will make it easier and more convenient for vloggers. However, high-quality vlogs take both delicate planning and good storytelling skills, which is much more challenging than creating short videos. It’s far behind short videos in terms of both quantity and quality.

Vlog is rising and trending, definitely worth marketers’ attention and experiments. The nature of vlogs is “log”, which can be easily boring, while the short videos focus on just eye-catching moments. So, it can’t be any serious threat to the popular short video content for reaching the mass audience but a very good complement to overall content mix.

To get you some sense what it could potentially do for marketing, take a look at the three videos below:

Vlog for Apple iPad Pro

In addition to feeling the atmosphere of the launch conference, experiencing the magnetic features of the new iPad Pro and Apple Pencil, they also incorporate many daily elements of New York’s food and lifestyle in vlog and present the experience content of the conference from the perspective of life.

Vlog for LV Exhibition

Louis Vuitton held a large exhibition and invited some top vloggers. The look and feel of the scene were presented in different Vlog styles. Among them, LV also provides vloggers with branded products such as clothing, shoes, handbags, and ornaments, which were also recorded in the vlogs.

Hyatt Presidential Suite

A couple on Weibo, boy Sid is Chinese, girl Kat is from the United States. In this vlog, they received an invitation from Grand Hyatt Xi’an to experience the 31,000-yuan presidential suite. With the arrangement of the hotel, Kat and Sid followed the timetable and introduced the hotel’s room profile, double room spa service, and an Italian restaurant.

The most important thing about Vlogger sharing life is to resonate with free expression to attract people in the same circle. Compared with traditional TVC or celebrity endorsement ads, Vlog gives the audience a smaller sense of distance and is more realistic, in addition to its much lower production cost.

How a popular vlog celebrity in China expanded from online to offline retail

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

Data-driven, social media and omnichannel are the focuses of digital marketing growth for luxury brands, while “young”, “geographic concentration” and “social” are the keywords that best describe the trend of luxury brand marketing in China.

A recent report, jointly published by Tencent Advertising and Boston Consulting Group, revealed three major pain points for luxury brand marketing in China:

• how to better reach out to customers
• how to better increase customer loyalty
• how to better use data assets to drive business growth.

Luxury marketing in China: Young, geographic concentration and social are the keywords that describe the future trend

In 2018, China’s luxury market exceeded 110 billion Euros while maintaining a growth rate of 6%, accounting for 33% of the global luxury market. It is expected to grow at a CAGR (compound annual growth rate) of 5-6% in the future and to contribute over 40% of the global luxury retail sales by 2025.

It is an indisputable fact that China has become the most important market for luxury brands. The report shows that this growth is mainly driven by three major trends of Chinese consumers:

• luxury consumers continue to be young
• Geographically, the majority of luxury consumers are from the top 50 cities
• Social media influence remains strong

The report reveals that luxury consumers are becoming younger. Consumers aged between 26-35 y-o contribute 62% of luxury sales and consumers between 18-25 y-o contribute 12%.

Geographically, the majority of luxury consumers are from the Top 50 cities: At the same time, luxury consumption has become more widespread in China and shows an apparent trend of geographic concentration.

High-end luxury consumption has gradually penetrated into second-tier cities. Luxury consumers in the first and second-tier cities account for around 70% of the total number and contribute over 70% of total sales.

Currently, domestic luxury consumers from first and second-tier cities tend to travel abroad to buy high-end luxury goods while due to a limited number of local luxury shops, luxury consumers from third & fourth-tier cities tend to make their purchase in the first & second-tier cities. Therefore, how to use digital channels to manage retained customer assets will be one of the focuses in the future.

Social media influence remains strong. Because of the ubiquity of mobile social media in China, Chinese consumers have also demonstrated strong social orientation when making luxury consumption decisions. More than 80% of Chinese consumers choose the “rational” way of researching online and purchasing offline when buying luxury goods, far above the global average.

The core channels influencing Chinese luxury consumers’ purchase decisions are shifting towards high digitalization. The social media penetration rate is now as high as 67%. Luxury brands can, through social media platforms, better reach out to their target customers, attract and influence the younger generation of core consumers with customized contents.

For luxury brands, the key to growth is to know how to better leverage social media platforms and to achieve a tight online-offline connection in order to form closer relationships with their customers.

Pain point 1: How to leverage social media and reach out to customers

According to the report, customers spend a significant amount of time on social media platforms and contents, and at the same time, KOLs’ endorsement has a very significant influence on their purchasing decisions.

Therefore, how to leverage on social media has become a critical topic that luxury brands need to think about.

Kiki Fan, General Manager of Tencent Advertising’s Key Account Sales and Operation Department, shared the new idea of leveraging on social media with Tencent’s Smart Marketing Solutions:

“…no longer focus on a single social media platform, but use a more global perspective, connect users with all touching points through four major traffic channels, and make social media the key to generating traffic.”

First, the brands must have their own traffic. Currently, an increasing number of luxury brands have set up their own WeChat official accounts, mini-programs, and other tools in the WeChat ecosystem.

Because of the unique characteristics of luxury brand marketing, proprietary channels can best present the brand image and allow them to position most precisely in order to achieve in-depth interaction with their customers, which is also the best way to retain and accumulate loyal customers.

The social media traffic is in turn generated from fission marketing as well as voucher campaigns initiated by the brands. In this way, they can acquire traffic from the social behaviors of their customers within the WeChat ecosystem.

This approach can maximize the social energy of WeChat and help achieve exponential traffic growth. In the end, this traffic can still be directed to the brand’s own channels such as their mini-programs in order to build a true marketing closed loop.

The report shows that researching online and purchasing offline is the main way Chinese consumers make their luxury purchases.

Tencent’s Smart Marketing & Smart Retail Solutions offers a series of tools to allow brands to convert their offline traffic into online traffic and integrate the two. This can help them convert their traffics in offline shops and from shopping guides into direct sales.

The advertising traffic provided by Tencent Advertising, as paid traffic, can be an amplifier for brand marketing campaigns, enabling a wider range of customer connections under diversified contexts of the Tencent platform.

A number of luxury brands, including Cartier, Bulgari, and Gucci, are experimenting with these four traffic solutions provided by Tencent to effectively expand their customer base and realize growth.

Pain point 2: How to better improve customer loyalty

According to the report, among the current online purchase channels, proprietary channels are emerging and account for over 30%. Brand-managed mini-programs and WeChat public accounts became the fastest growing channels last year.

This phenomenon is closely related to the unique characteristics of the luxury industry. For luxury brands, their customers expect the same shopping experience online as in offline boutiques. Therefore, for luxury brands, the key to realizing future growth breakthrough is to build proprietary platforms in an asset-light fashion that can interpret their brand image and help them build a tighter relationship with their customers.

Kiki Fan stated that: “Tencent Advertising provides the Brand 2.0 model for luxury brands. With mini-programs as the core, we can help brands establish and operate their proprietary sales channels on WeChat mini-programs and help them achieve closed-loop marketing throughout the chain.”

Brand 2.0 does not only allow brands to establish their proprietary sales channels in an asset-light way through mini-programs and mobile payment but also enables them to offer consumers a richer shopping experience through the social media platform of WeChat.

Online mini-programs can provide brands with long-term online boutiques as a non-stop sales channel. It can also be used as the ground for pop-up shops as the brand’s online marketing campaign.

Tiffany launched its limited edition product line in its pop-up shop mini program during the 520 period (20 May, Chinese Lovers’ Day), and achieve efficient sales conversion with the help of advertising campaign in WeChat’s social sharing channel Moments and injection of social media traffic.

At the same time, on their proprietary channels, brands can deepen the emotional connection with consumers through collaboration with IPs or KOLs, or by creating customized contents that attract consumers.

On these channels, brands can communicate with consumers effectively, and by using the Tencent Smart Advertising tools to analyze and manage collected data, service their consumers more precisely, create their own CRM and in turn increase their brand loyalty.

Pain point 3: How to achieve business growth leveraging on data assets

In the past, the communication and marketing of luxury brands relied mainly on creating emotional resonance with and conveying brand values to consumers.

In a highly competitive market environment, how to collect and retain consumer data from the four major channels and convert it into business and strategic insights in order to drive growth has become the third biggest pain point. Tencent Think Tank can effectively address this pain point and help brands explore potential growth opportunities.

Thanks to its accumulation of data insights over the years, collaboration with third-party partners, and excellent multi-dimension strategy development capabilities, Tencent can help brands match target consumers as well as potential consumers through its Data Think Tank, provide advertisers with many options of group combinations and expansion models.

With Model LAB’s more intelligent customizable model, flexible targeting, positive-negative target sample comparison functions, and machine learning training models, Tencent help advertisers precisely target group combinations, optimize marketing budget allocation, increase client base expansion capability and ultimately boost conversion throughout the entire chain, according to the report.

This is like providing luxury brands with a compass on the sea and help them effectively reduce the time spent seeking growth in China.

For luxury brands, China still has huge prospects and potentials to be explored in the future.

“Data capability is the foundation of growth for luxury brands, and is the basis on which marketing strategies should be developed.” Kiki Fan said.

She states that thanks to Tencent’s Data Think Tank’s multi-dimensional insight and strategy development capabilities, brand data assets collection and analytic capabilities, and the one-click marketing applications, luxury brands can obtain 360-degree portraits of their consumers at different stages of the consumption cycle and truly understand them.

This can allow them to identify key loss/conversion nodes in the consumer decision path, and to understand the relationship between audiences and advertising. Brands can then develop a more optimized and effective marketing strategy in order to capture the business opportunities and achieve growth brought by China’s 820 million mobile Internet users.

Tencent’s total revenues in Q1 2019 were RMB85,465 million (USD12,693 million), an increase of 16% over the first quarter of 2018 according to Tencent’s announced financial results.

Its revenues from VAS increased by 4% to RMB48,974 million for the first quarter of 2019 on a year-on-year basis. Online games revenues were RMB28,513 million, broadly stable compared to the first quarter of 2018. Social networks revenues grew by 13% to RMB20,461 million.

Revenues from FinTech and Business Services increased by 44% to RMB21,789 million for Q1 2019 on a year-on-year basis. The increase was mainly driven by greater revenues from its commercial payment and cloud services.

Revenues from online advertising increased by 25% to RMB13,377 million for the first quarter of 2019 on a year-on-year basis. Social and other advertising revenues increased by 34% to RMB9,898 million, mainly due to the increase in advertising revenues derived from WeChat Moments, Mini-Programs and QQ KanDian.

Mr. Ma Huateng, Chairman and CEO of Tencent, said,

In the first quarter of 2019, we sustained healthy user engagement across our key platforms, with notable growth in the number of short videos uploaded and shared by users on QQ and WeChat.

We are invigorating our game business with popular releases such as Perfect World Mobile in China, while PUBG MOBILE is growing internationally.

Our payment, other FinTech services and cloud business, while still at an early stage of expansion, are now generating substantial revenues, and we are consequently disclosing their results in our new FinTech and Business Services segment, demonstrating our success in organically incubating services with long-term growth potential.

Its operating profit was RMB36,742 million (USD5,457 million), an increase of 20% YoY. Operating margin increased to 43% from 42% last year. Profit for the period was RMB27,856 million (USD4,137 million), an increase of 16% YoY. Net margin was flat at 33%.

Profit attributable to equity holders of the Company for the quarter was RMB27,210 million (USD4,041 million), an increase of 17% YoY.

Basic earnings per share were RMB2.877. Diluted earnings per share were RMB2.844. On a non-GAAP2 basis, which excludes certain non-cash items and certain impact of M&A transactions:

• Operating profit was RMB28,470 million (USD4,228 million), an increase of 13% YoY. Operating margin decreased to 33% from 34% last year.
• Profit for the period was RMB21,673 million (USD3,219 million), an increase of 13% YoY. Net margin decreased to 25% from 26% last year.
• Profit attributable to equity holders of the Company for the period was RMB20,930 million (USD3,108 million), an increase of 14% YoY.
• Basic earnings per share were RMB2.213. Diluted earnings per share were RMB2.187.

Social Media

During the first quarter of 2019, combined MAU of Weixin and WeChat was 1,112 million, up 6.9% year-on-year.

Smart device MAU of QQ slightly increased year-on-year and exceeded 700 million in the first quarter. Young users became more engaged on the QQ platform and their MAU grew by a double-digit rate year-on-year.

China Internet users are increasingly utilizing WeChat and QQ’s in-app camera functions to record short videos, which they then share in one-to-one chats, group chats, and timeline formats. Users now upload hundreds of millions of videos each day to Tencent’s communications and social platforms, which Tencent believe are the leading venues in China for uploading and viewing such user-created videos.

Tencent launched Mobile QQ Version 8.0 with engaging features such as QQ Mini Programs and KuoLie, which recommends new friends to young QQ users based on similar interests.

In WeChat, Tencent enabled users to share information, products and services for different vertical categories of Mini Programs within their chat groups, facilitating activities such as group buying for local communities, and the active user base for non-game Mini-Programs continued to grow at a healthy rate.

Online Video

Tencent Video subscriptions increased 43% year-on-year to 89.0 million, driven by popular self-commissioned IP content, such as Candle in the Tomb Season 3; Heaven Sword, Dragon Sabre (based on the popular martial arts novel by Louis Cha); and The Land of Warriors Season 2.

Tencent Video subscription counts were broadly stable sequentially due to delays in airing certain drama series, which might otherwise have contributed more to subscriber growth.

To further engage with video viewers, WeiShi launched a new feature for Produce 101 Season 2, enabling users to vote for contestants and share related short videos with their WeChat and QQ friends.

Continue to read Q1 summary on JD and Alibaba.

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!

WeChat sees 1.08 billion monthly active users in 2018, 63 million of which are senior citizens aged 55 years old and above. On average, WeChat users sent 45 billion messages and make 410 million audio/video calls every day (up 570% than 3 years ago).

Watch the video for more:

• A WeChat user on average has 110% more contacts than 3 years ago
• Post-00s (born in and after 2000): Active after 10pm; monthly payment on beverages & dessert ↑230%
• Post-80s: love reading, focus on work
• Post-70s: most leisure time on WeChat Moments.
• x4.7 users take public transport using WeChat than 2017
• x1.5 more WeChat Pay users in retail stores
• x1.7 more WeChat Pay users in restaurants; top cities: Beijing, Guangzhou, Shenzhen

WeChat launched its own version of “Facebook Stories”

WeChat is testing a new feature allowing users to find nearby restaurants according to Yiou News. This feature locates on the top level menu, in parallel with WeChat Moments, People Nearby, Mini-Programs, etc.

Some WeChat users discovered “Nearby Restaurants” feature in Plugins of Settings (previously WeChat Lab; left picture of the screen capture below) according to Yiou. The testing is currently only limited to Guangzhou.

WeChat has been providing Food feature for a while with Mini-Programs, which is under “Mini-Programs > Nearby Mini-Programs”. However, users can’t get much information about the restaurants as no information such as ratings or reviews is available.

The new “Nearby Restaurants” feature in WeChat looks like a challenge to Meituan Dianping, one of China’s leading e-commerce platform for local lifestyle services that went public in Hong Kong in September 2018. Meituan’s annual transacting users increased by 30.3% to 382.3 million as of September 2018.

With its strong social feature and large user base, this Nearby Restaurants could become an essential part of WeChat ecosystem. It can target and hurt Meituan Dianping if it chooses to do so. But, it’s not clear yet.

Tencent is Meituan Dianping’s largest shareholder holding close to 20% of its shares:

Meituan Dianping has well utilized Tencent’s WeChat ecosystem, especially WeChat Pay and Mini-Programs. And, it owns several ones in the top WeChat Mini-Programs.

Would Tencent create another Meituan Dianping? Theoretically, it’s one possibility. Alternatively, Tencent could also work with it integrating its restaurants’ data while enhancing it with high social engagement and complementing its e-commerce offerings.

WeChat is at least not an immediate threat to Meituan. Its current strong competitors include Alibaba’s Koubei and Ele.me.

Also read: WeChat launched its own version of “Facebook Stories”