The Monetisation of WeChat and a Shifting Power-Balance in China’s e-commerce Landscape

The Monetisation of WeChat and a Shifting Power-Balance in China’s e-commerce Landscape

Interesting developments last month at Tencent’s WeChat, where a new Android update roll-out may affect the power-balance between China’s Internet giants.

WeChat; China’s biggest instant messaging application, with well-over half a billion users, announced a major update to its’ Android app last month, that signals clearly its’ monetisation strategy going forward.

The new 5.1 version of WeChat is notable for the following updates:-

1) WeChat has increased the number of participants that are accommodated in group-chat from 40 members to 100. Users can only have one such group, unless they pay a nominal fee using WeChat’s mobile payment functionality.

2). Users can now top-up their own personal mobile phone accounts, and can do so as well for anyone in their contacts list. This is can be done via the WeChat payments function.

3). Users can now input a delivery address into their profile, which will enable the sending of physical goods purchased on Tencent’s Yixun e-commerce platform. Yixun is fully integrated into WeChat.

4). In the app’s popular plane game, players can revive their fighter jet after it crashes. Users simply pay a small fee via their WeChat payment account.

The 5.1 update facilitates far greater e-commerce integration and represents a move into more commercial pastures for WeChat looking to monetise its’ huge and ever growing user-base.

The Android app is being rolled out exclusively through Tencent’s MyApp store, which highlights a clear statement of intent to eat into competitor app stores market, such as Baidu and 91 Wireless’ HiMarket.

The 5.1 update is hot off the back of version 5, which saw prominent roll-outs of paid stickers, social gaming, as well as formal introduction the WeChat mobile payment feature.

If Tencent succeeds in using WeChat as a new conduit for e-commerce revenues, it could change the power balance among China’s Web giants. The undisputed leader in all-things-online-shopping has always been Alibaba, which generated an estimated $5.7-billion in sales during China’s Cyber Monday ‘Singles Day’, about 21% of which came through mobile.

Alibaba has been fighting back by aggressively pushing its own messaging app, Laiwang, and by developing online-to-offline functionality for its Alipay payment platform.

It will be interesting to see who gains market share off the back of these developments. Watch this space.

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by scodaauthor  |  January 21, 2014