WeChat Pay is changing slightly.
WeChat Pay is the digital wallet of almost all Chinese. By the third quarter of 2018, there were more than 800 million active users and millions of transactions per day each month, an increase of 50% over the previous year. Furthermore, it has suppressed all the other competitors with an astounding penetration rate of 86.4%, compared to 70.9% for Alipay, its biggest rival.
The high penetration rate, however, may in future lead to greater difficulties in attracting new users. Now WeChat Pay is looking for a new way to bring customers closer to merchants and began exploring opportunities beyond its home market. At the recent WeChat Pay Overseas Partner Conference, Tencent revealed a range of further technological and financial measures to help overseas merchants boost sales and monetise traffic through WeChat Pays.
More than a payment
In China, WeChat Pay is trying to become more than just a means of payment. Mobile payments in China have entered a new phase, said the Vice President of WeChat Pay division. That was why the company had shifted its focus to connecting businesses across industries and offering smarter digital solutions.
For example, the concepts of ordering online with the QR code and the unconscious payment of parking fees had been developed by service providers and not by WeChat employees. Specialists in the development of Mini Programs and e-commerce systems, offer customised WeChat solutions for retailers to help them identify the potential requirements. Since WeChat Pay was opened in 2015, there have been 30,000 service providers on the platform.
Both WeChat Pay and Alipay are changing their mind about the role of transaction payments. It should not be the end but a bridge for the two giants to embrace the industrial Internet instead of the consumer Internet. WeChat’s capabilities and infrastructure should help retailers to benefit from expanding their business. For example, the card section can be the gateway to a membership system, while the official WeChat corporate account can enable convenient store management.
Pony Ma, founder of Tencent, saw WeChat as a decentralised platform, where merchants and companies can connect with customers directly and build up their loyalty and traffic entrance. The domestic transformation is on the way and it is hoped that it will succeed in the international market as well.
* WeChat Pay has successfully developed a variety of solutions, including smart theme parks, smart airports, smart restaurants, convenience stores, hospitals and even smart campuses.
Promote payment to businesses worldwide
WeChat Pay has no digital wallet versions for other countries, such as Ant Financial, which has duplicated several Alipay offerings worldwide through investments in third-party local payment organisations. WeChat Pay is inferior in terms of the number of users from abroad. Tencent claimed to have 70 million overseas users in 2013 but since 2014 has been tight- lipped about data.
The global strategies of Alipay and WeChat Pay are similarly straightforward at the beginning: Follow outbound tourism. The Chinese foreign travel tourist was estimated at around 148 million in 2018 and spent an average of $800. This year, growth of 11% is forecast. They are still WeChat Pay’s target. Nevertheless, in addition to helping overseas merchants to accept money from the growing number of Chinese travellers, WeChat Pay will also accelerate its affiliate marketing capability and services to partners.
Lung Fung Pharmaceutical (Group) Ltd, a well-known Hong Kong-based pharmaceutical company, is a good example. “We integrated WeChat Pay in 2019, and the transaction volume has increased tenfold within 3 years,” said the company’s CEO. Both sides decided to take the cooperation to a new level and make full use of WeChat to improve the in-store experience. For example, with the Mini Program consumers can check the price and place self-help orders. In 2018, Lung Fung started to run its official store on WeChat to maintain long-term communication and ongoing customer service, and thus boost the consumption of mainland tourists even after leaving Hong Kong.
WeChat has adopted a similar collaboration mode with brands in other countries and regions. In January of this year, WeChat Pay and BHV Marais jointly launched a smart department store solution, including advertising on Mini Program and Moments, official account coupon distribution and a pop-up store celebrating the Chinese New Year in Paris.
* The pop-up store combines artificial intelligence technology with makeup shopping experience
At present, WeChat Pay's cross-border payment service has reached 49 countries and regions outside mainland China in accordance with local regulations. The performance is particularly impressive in Southeast Asia, Japan and South Korea. However, the penetration rate of mobile payment is not expected to be high, even in Hong Kong, where WeChat Pay has been building a presence for several years: according to Lung Fung, WeChat only generates 10% of its sales. However, efforts to provide smart and sustainable solutions to foreign companies and help them to connect with Chinese tourists may be another way to make the cross- border initiative a reality. Massive subsidies cannot last forever.
Reading The Rising Chinese E-Payment Giant - Alipay to learn more about the first mobile payment launcher in China.
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