How WeChat is turning to e-commerce - Matthew Brennan

Matthew Brennan

Fighting Alibaba on e-commerce is a tough struggle, but Tencent's WeChat is clearly delivering on improving its shopping environment, even when it does not beat Alibaba, says Tencent watcher Matthew Brennan to TechNode.

TechNode:

[T]he latest update seems to fit with Tencent’s aim to make mini-programs easy to use. It’s “very much in line with what they said they would do,” says Matthew Brennan, co-founder of China Channel. 

“The whole mini-program initiative is about helping startups, helping more businesses,” Brennan told TechNode. That applies to e-commerce as well. Just a few years ago, WeChat “wasn’t a very natural environment” for online shoppers, said Brennan. Now the whole in-app retail experience has become much smoother thanks to pushes from Tencent. 

Brennan doesn’t see the company’s e-commerce initiative as a direct competitor to Alibaba. Instead, like the “runaway hit” platform Pinduoduo, WeChat is finding new models “to let social e-commerce flourish.” 

And fast-growing mini-programs, launched in January 2017, happen to be a convenient tool for alternative means for growth. As of the second quarter of 2018, Tencent reported that WeChat hosted over 1 million mini-programs on its platform, a 72% jump from the same period in 2017. Total users reached 600 million, with close to one half accessing them four to six times a day.

More at TechNode.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Why US companies start to copy Chinese apps - Sara Hsu

Sara Hsu

Chinese apps like Tiktok and WeChat make inroads into the US, and American companies start to copy their features. Fintech analyst Sara Hsu says fierce domestic competition makes those apps better than what we know outside China, as younger generations like their lives through apps. So, if they do well, they can cater for much more than only chitchat, she tells at CGTN.

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A day in the life of a WeChat user - Matthew Brennan

Matthew Brennan

WeChat is one of the largest social platforms in the world, and an example of what Facebook CEO Mark Zuckerberg wants to do with his platform. WeChat expert Matthew Brennan is one of three avid WeChat users explaining to the Jing Daily what WeChat means for his daily life, including their mini-programs.

Jing Daily:

Matthew: WeChat is primarily a communication tool for me. Some days, I’ll communicate with anywhere between 10 to 100 people in a single day. It’s also time-consuming to manage a 440-person WeChat group... 

I also use mini-programs on a daily basis — at least once a day. The most popular ones are Meituan Dianping (food delivery) and Luckin Coffee. I also use one for requesting and sending invoices... 

If I am offline and am going to a convenience store or a market to buy some clothes [I’ll use it]. I use it to pay for pretty much any daily purchases you can think of. I rarely use Alipay. I opt for other types of payments only when paying a large sum, like my daughter’s kindergarten tuition. If you speak with people in Shanghai, they use a lot of Alipay. It’s popular in first-tier cities and among young people. WeChat is definitely more universal and lets older generations to purchase offline. Shenzhen and Guangzhou are much more skewed to WeChat because that’s where the company is based... 

WeChat official accounts are an important part of the content ecosystem. On average, I will read at least two articles about tech on WeChat a day. I access them from in the subscription account folder, through content shared in Moments, and from “Top Stories”(看一看). I also run my own official accounts and update them about once a month... 

Commenting from a business strategy perspective: three contenders to WeChat were recently released on the same day including Duoshan from Bytedance, which has gained a lot of media attention. The most popular quote online from a social media user was this: “I had a good time chatting on three products, but we still want to keep in touch, so we added each other on WeChat.” I think it nicely sums up the situation regarding any alternative communication platform that would like to rival WeChat.

More in the Jing Daily.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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How Tencent became a winner with WeChat - Matthew Brennan

Matthew Brennan

China's internet giant Tencent has become a winner, first by copying US competitors, but now it has become their inspirator, says Tencent-watcher Matthew Brennan to Leadersleague. “WeChat does not monetize data, but it is a growth lever for other businesses in the Tencent group. It’s a bit like iOS or Android in that regard,” says Brennan.

Leadersleague:

Tencent does not sell access to user-data to third parties, such as advertisers. The data of the Chinese app is to all intents and purposes the handsets of the users. “It would have been possible to compare We Chat to Facebook, Baidu to Google or Alibaba to Amazon ten years ago, but that’s no longer possible today,” insists Matthew Brennan a consultant specializing in Chinese IT... 

The most widely used of WeChat’s secondary functions is WeChat Pay. Until recently, Chinese people’s attachment to paying with hard cash was the norm. Nowadays, e-commerce represents 14% of all retail sales, against 8% in France. With WeChat Pay, you can use your phone to settle a bar tab or pay an electricity bill. Even the famous hongbao red envelopes Chinese use to exchange monetary gifts are being replaced by the application. During the 2017 Chinese New Year period, 14 billion transactions were carried out using the app. “Tencent has taken advantage of the lack of a developed baking sector in China, where the use of credit cards is not commonplace,” adds Brennan. By cannibalizing all the different services available on smartphones, WeChat has become a killer app, which the competition find impossible to match. 

Tencent is the big winner from the success of WeChat. Not only does the company take a percentage of every transaction made using the app, but it has developed its own content for the platform. “WeChat does not monetize data, but it is a growth lever for other businesses in the Tencent group. It’s a bit like iOS or Android in that regard,” stresses Brennan. Via WeChat Tencent can commercialize other businesses, such as Tencent Video or Tencent Music. In total the average mobile phone user spends 55% of their time on a Tencent service. The case of streaming services is particularly instructive. Thanks to WeChat, Tencent has managed to increase the subscriber base of its VOD platform Tencent Video, seizing a quarter of the Chinese market. The company claims to have more subscribers than Netflix even. 

Between 2016 and 2017, Tencent made 318 investments in startups and diversified number of sectors it is involved in in order to propose more services on WeChat. Tencent has invested in Karius, a platform specializing in the diagnosis of infectious diseases, and branched out into the connected agriculture sector.

More in Leadersleague.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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How Tencent's WeChat takes on Apple - Matthew Brennan

Matthew Brennan

Tencent's WeChat released last week to manage its successful mini-programs, moving ahead with an operating system, pushing against the already embattled competitor Apple, says Tencent watcher Matthew Brennan in CNBC.  The fight might focus on China, where mini-programs are most popular.

CNBC:

A recent update of the WeChat app from Chinese tech juggernaut Tencent could have "serious ramifications" for Apple, according to one analyst. 

The WeChat update, which came out this week, involves a redesign in the way mini-programs — apps within the app — are presented. With that change, users now "essentially have a second home screen" on their phones, said Matthew Brennan, co-founder and managing director at consultancy China Channel. 

While a change in user interface may not immediately seem like a game changer, experts said it signals a significant shift in the Chinese tech space... 

Commenting on the potential financial impact of the design change in WeChat on Apple, Brennan...generally agreed that the impact would be more long-term in nature... 

Brennan said the mini-programs on WeChat are "not designed to be very big" and are unlikely to compete against the games that feature on Apple's App Store.

More on CNBC.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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What Tencent does better than Apple - Matthew Brennan

Matthew Brennan

Zhang Xiaolong, the founder of Tencent's WeChat, delivered a speech on how the future of the company looks like. Tencent watcher Matthew Brennan looks at the way Tencent is doing things different than Apple, and why their mini-programs might be a winner, in Technode.

Technode:

According to Zhang, the strength of mini-programs lies in its decentralized ecosystem. “Our team from now on will invest more manpower and resources in this area, so we can treat all companies equally, including the ones we’ve invested in.” 

Matthew Brennan, co-founder of China Channel said that the concept of decentralization was “a bit counterintuitive” compared to Apple’s carefully-curated App Store. But mini-programs have proved a “great way to acquire users that wasn’t there before.” 

The feature banks on WeChat’s widespread adoption to draw in older or less tech-savvy folks who don’t usually download many apps, Brennan said. It’s spawned successes like a popular mini-program for public dancing—a popular pastime among middle-aged people, particularly women—that otherwise wouldn’t exist. Their small size also lowers the barrier to entry for developers, saving them time and money.

More in Technode.

Matthew Brennan published notes on the 4-hour speech by (Allen) Zhang here.

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WeChat starts to tell stories, at last - Matthew Brennan

Matthew Brennan

China's most popular short-messages platform WeChat has at last included Snapchat/Instagram style stories. Long overdue, says Tencent and WeChat specialist Matthew Brennan at his website. He tells how it works, and why - if very late - this is a smart move.

Matthew Brennan:

WeChat is coming pretty late to the stories game. For much of 2017-18, we’ve seen them totally focused on building up the mini-programs platform, which might explain some of the lateness. Also worth noting that adding stories into the complex WeChat experience in a meaningful and impactful way without disruption of the existing ecosystem balance is tricky and not without risk. 

But the real reason why we haven’t seen WeChat embrace moments to date is likely to be founder Alan Zhang’s insistence on positioning WeChat as a tool for productively and efficiency rather than one that tries to keep users coming back to waste time. 

Yet it’s likely that the pressure from Tencent head office to leverage WeChat to fight against Bytedance and their flagship short video platform Douyin (TikTok) is proving too much. With WeChat 7.0 we’ve finally seen WeChat make an indirect but bold move into short video. 

Overall I’m pretty positive on how they’ve adapted the stories format to WeChat with this new update. I expect this feature to have a significant impact on WeChat usage habits, increasing stickiness and time spent in the app and negatively impacting consumption of other forms of short video in the China market. There will probably be some degree of cannibalization to traffic on the moments newsfeed also. 

Stories have proven to be an immersive and engaging format across many different apps. The ephemeral nature of the format (24 hrs and they disappear) naturally drives users to return. The original innovation came from SnapChat who Tencent previously looked at acquiring and now own 17% of parent company Snap. 

The most important entry point for traffic into this new feature might be groups and 1on1 conversations, not the newsfeed (Interestingly Facebook also introduced stories into Facebook groups this month). Messaging is traditionally an inhospitable environment for monetization. From a platform owner’s perspective, it’s not simple to monetize chat conversations, you can’t put adverts in there without seriously disrupting the user experience. 

Tencent have done well with cracking this tough nut, firstly using lucky money in chat conversations as a way to kick-start WeChat Pay and secondly with sharing of mini-programs in groups as a way to foster e-commerce (e.g. Pinduoduo). Stories could be a third way to leverage the huge traffic of chat conversations as they can be monetized with ads and full-screen auto-play video ads at that; no wonder Facebook is trying to stuff stories everywhere they can. 

Tencent is conservative with ad inventory, so I expect it will be quite some time before we see ads in WeChat Stories (if ever), but certainly the potential is there for them to turn on the taps if need be. In the short to mid-term, the primary benefit will be increased stickiness and engagement mostly at the expense of competitors. 

Tencent must know that chat conversations are the real key to both WeChat traffic and monetization. They might be reluctant to place more pressure on the newsfeed where traffic has been falling or official accounts that have also seen declines in page views. Chat conversations have incredibly high value to users and unlike in newsfeeds, Tencent’s position is highly resilient to competition.

More at the ChinaChannel.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Trends in luxury travel - Rupert Hoogewerf

Rupert Hoogewerf

China's luxury travelers are high on the agenda of the tourism industry, and Rupert Hoogewerf, publisher of the Hurun China Rich List, sees a few major trends. Family trips are emerging as a preference, and WeChat groups of alumni of key universities a forgotten way to connect to the luxury travelers, he tells in the South China Morning Post.

The South China Morning Post:

Rupert Hoogewerf, CEO of the Hurun Report – a research, media and investments business – said that family travel was the third most popular holiday “theme” with high-net-worth individuals and ultra-high-net-worth Chinese travellers. Speaking to the luxury travel brands attending the event also confirmed for us that pleasing the “luxury little emperors” – children – is just as important as anticipating the needs of adult VIP guests... 

During the panel discussions, Hoogewerf also referred to an untapped resource – the alumni of top Chinese and international universities and their WeChat groups. For example, if a former student at Shanghai’s Fudan University – or a Chinese alumnus of a leading overseas university recommends a luxury travel experience, then the rest of his or her peers are highly likely to want to try it for themselves. 

His comments highlighted the fact that there are still underused methods for connecting directly with holiday firms’ target market of China’s affluent travellers.

More at the South China Morning Post.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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How Tencent moves to B2B - Matthew Brennan

Matthew Brennan

Tencent watcher Matthew Brennan has an in-depth look at how the recent reorganization of the internet giant reflects on the internet in China, especially how the company that became big through WeChat and B2C moves towards a more industrial approach, he writes on his weblog at China Channel.

Matthew Brennan:

“From the management side, the biggest challenge we face is internal organization. Right now Tencent needs to get better at doing B2B.” – PonyMa, Tencent Annual Internal Staff Meeting 2017 Dec 15^th. 

This quote is from the annual Tencent internal staff meeting last year, it shows the higher management have been aware for a considerable time that change in organizational structure and strategic focus were necessary. Pony Ma when he has given public talks over the past year, they have mostly been focusing on the areas of B2B business most often mentioned would be Tencent’s smart retail solutions. 

It seems that higher management has decided that the development of Tencent’s B2B solutions will decide the future potential of the company. B2C business has peaked as the number of mobile internet users has passed its rapid growth stage. User growth for most major internet companies has declined considerably. 

Yet when doing B2B internet business in China, Tencent will undoubtably find themselves competing with their arch rival Alibaba and this competition will be tough. Alibaba unlike Tencent has B2B in their blood. From the early days their company started out with the incredibly tough job of making sales of their internet services to factory owners who’d never heard of the web before. Persuading them of the merits for this new way of gaining clients without meeting them in person. 

“Many people said we only have ‘B2C’ in our DNA. B2B is not in our blood. I don’t believe that. I think that every evolutionary successful species holds characteristics that weren’t there at the beginning but were evolved over time.”- Martin Lau, Tencent Internal Staff Meeting 2017. 

Tencent’s traditional strength throughout it’s 20 years of existence has always been in B2C. They have a proven understanding of how to monetize large user bases. They have access to the deep social graph of Chinese internet users and they are consistently able to produce products that Chinese consumers love to use. 

Apart from investment income, Tencent’s main profit model today is to accumulate new users, cultivate their usage habits over time, and make profits eventually through games, user fees, and advertising. This monetization could be said to be a long and indirect process. By contrast, the revenue earned from B2B businesses appears to be more direct and the clients are often stickier. Once the relationship is established, transactions will continue, and the income is more stable than B2C.

Much more at the China Channel.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Fighting WeChat: a tough challenge - Matthew Brennan

Matthew Brennan

Bullet Messenger profiled itself last week at a competitor of WeChat, and got a lot of interest, certainly from investors. But its mission might be very tough to achieve, says WeChat expert Matthew Brennan at PYMNTS. "This is not a WeChat killer."

PYMNTS:

The tailwinds are multiple. For one thing, said the newswire, Bullet Messenger has a “stripped-down” appeal to the masses (more on this later), and in a competitive landscape dominated by the likes of WeChat, those same masses of users are looking for an alternative. 

At the same time, money and consumers chase and lock in on what’s available. According to Matthew Brennan, co-founder of consulting firm China Channel, the disruption is one that comes with speed, and, as he said, “there is an increasingly large amount of easy money chasing increasingly fewer opportunities, while there is also a very large pool of talented entrepreneurs now, so people know how to scale businesses fast – there is an established playbook.”... 

Still, at the moment, though the initial embrace of Bullet may impress, at least some observers state that the competitive landscape is unlikely to tilt anytime soon. WeChat, as Tencent noted in its most recent earnings results, is a bright spot for the company, as monthly active users grew by 10 percent year over year to reach and breach that one billion user milestone. 

Said China Channel’s Brennan, “this is not a WeChat killer. Bullet is still tiny and has a lot to prove,” adding that it is “very, very difficult” to build successful social networks where users actually stay.

More at PYMNTS.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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WeChat: huge and still growing - Matthew Brennan

Matthew Brennan

Tencent's WeChat has become the largest national platform in China. But despite its one billion monthly active users, the platform is only starting to grow and monetize its base, for example by using its mini-WeChats, says WeChat expert Matthew Brennan to the South China Morning Post.

The South China Morning Post:

“[WeChat’s user numbers] haven’t hit the ceiling yet but I think they will at some point,” said Matthew Brennan, managing director of independent WeChat consultancy China Channel. “But they still have a lot of room to grow in advertising, and now with mini programs.” 

Mini programs refer to applications typically smaller than 10 megabytes that can run instantly on the main app’s interface. They offer speed of access to users because a program does not have to be downloaded from an app store, they can run from within the app. This innovation allows platforms to host multiple services, turning them into super-apps, delivering greater convenience to consumers in the world’s largest smartphone market... 

WhatsApp, WeChat’s biggest overseas rival today, was available to the Chinese market at that time [it was later banned by China in 2017 ahead of a major Communist Party congress] but missed its opportunity without any localisation or promotion in the market, China Channel’s Brennan recalls.

By the second quarter of 2018, the number of WeChat mini programs reached one million and mini program users surpassed 600 million in June this year. 

“The mini program initiative is opening many doors for Tencent,” said China Channel’s Brennan. “Monetisation due to adverts and payments … and by allowing [Tencent] to incubate and accelerate a variety of businesses within the ecosystem – e-commerce in particular.”

More in the South China Morning Post.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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How to deal with WeChat blocks - Ashley Dudarenok

Ashley Dudarenok

Foreign brands know they need Tencent's WeChat to sell their products to Chinese consumers, but working with WeChat mean dealing with blocks, says marketing expert Ashley Dudarenok, author of Unlocking the World's Largest E-Market: A Guide to Selling on Chinese Social Media at AshleyTalks. Not only they have to deal with official rules, also Tencent does not like links to its direct competitors like Alibaba. How to deal with them?

Ashley Dudarenok on the official WeChat rules:

WeChat has its own rules and regulations related to external links and specifies ten types of content with external links that may be blocked. Here is the English translation:

1. Content that forces or entices users to share something (e.g. a WeChat article) in order to proceed to the next step, like getting information, winning a prize or taking part in a campaign; sometimes with benefits provided, including but not limited to cash, coupons, discounts and prizes
2. Content that forces or entices users to follow an official account in order to proceed to the next step, like getting information, winning a prize or taking part in a campaign
3. H5 games and tests that entice users for interactions, including friend Q&A, personality tests, online fortune telling or prediction games, etc.
4. Fraudulent content, including fake red packets or campaigns, and content that imitates the style and domain name of otherWeChat articles and accounts and may cause confusion
5. Rumors or false information that may cause harm to individuals, corporations, or other institutions
6. Spam, ads, and junk content, including information about counterfeit goods, ads making fraudulent claims, ads for cryptocurrencies, etc.
7. Content with sensational, exaggerated, or misleading headlines that don’t match the content as well as pornographic, erotic, and vulgar content
8. Content designed for the collection of users’ personal data or information without the user’s knowledge or consent
9. Content soliciting donations to religious organizations
10. Content offering payment for votes

According to WeChat’s regulations, once found, these external links will be blocked immediately and the related official account may also be sanctioned. In the worst case scenario, this can lead to a permanent ban.

More tips to avoid blocks at AshleyTalks. Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more for branding experts at the China Speakers Bureau? Do check out this list.

How to use WeChat for your marketing - Ashley Dudarenok

Ashley Dudarenok

Many foreign companies get it wrong when they try to use WeChat to sell in China. Marketing veteran Ashley Dudarenok, author of Unlocking the World's Largest E-Market: A Guide to Selling on Chinese Social Media gives the main takeaways for using WeChat for reaching the Chinese consumers.

Ashley Dudarenok is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on e-commerce at the China Speakers Bureau? Do check out this list.
 

WeChat: an unavoidable magnitude - Matthew Brennan

Matthew Brennan

Tencent's social platform WeChat is so huge, nobody can avoid the giant in China, says WeChat expert Matthew Brennan to Sixth Tone. Even Alibaba's Jack Ma, Tencent's largest competitor, has to use the platform.

Sixth Tone:

Matthew Brennan — co-founder of consultancy China Channel, which provides insight into WeChat for foreign firms — agrees that WeChat is “pretty much unavoidable” for anyone who wants to function normally in Chinese society. He cites the case of Alibaba founder Jack Ma, who famously announced in 2013 that he would be quitting WeChat and launching the company’s own messaging app. The app turned out to be a total failure, and Ma ended up reluctantly admitting in a livestreamed interview last year that he was back to using his competitor. “Even if you hate it as much as Jack Ma does, you have to use WeChat,” Brennan tells Sixth Tone.

More in Sixth Tone.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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How a government critic got a WeChat account - Ian Johnson

Ian Johnson

Journalist Ian Johnson, author of The Souls of China: The Return of Religion After Mao, interviewed the sociologist Guo Yuhua, a known critic of the government. One jewel in the interview on how she was able to open an account on WeChat, despite the governmental censorship, for the NY Review of Books.

Ian Johnson:

How did someone like you manage to open a public account on WeChat? 

I had such a hard time. I changed the name but nothing worked. Finally, I got in touch with someone from Tencent [the company that runs WeChat]. In recent years, I‘d done some research with them on the effect of the Internet on society. So I knew people from their research department. I asked, “why can’t I open a public account?” 

They said they’d look into it and got back to me and said, “You’re right, you really can’t.” I asked why and they said, “You’re restricted but let’s do it like this. You open the account and we’ll assign a person behind the scenes who will accompany you.” So I did as they said and when it started that person said, “I’m your first follower!” 

Your personal censor! Why does Tencent do it? What’s in it for them? 

They want to have readers. If it’s just boring stuff being published it’s not interesting for them, either. We had contact and they knew me. They know that my stuff isn’t extreme. It’s fairly academic. But the restrictions are still strict. For every five articles, two or three are cut. Sometimes, I have to argue with them—like over the Xi article—I say, “I can publish it in that academic magazine, so why not with you?” 

So that’s the way it is. The space gets smaller and smaller. If you want to publish your own work, it’s harder and harder. If you struggle, you might not have any [space]. But if you don’t struggle, you definitely won’t have any. So my motto is: “If you can say a bit more, say a bit more.”

More in the NY Review of Books.

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Local messaging apps beat international competition - Matthew Brennan

Matthew Brennan

In China, Tencent's WeChat became the leading messaging app, but  - unlike many think in the West - it is not government censorship that kept international competition at bay, says WeChat expert Matthew Brennan in The National. Also in other countries, local messaging app prove to be stronger.

The National:

In its native China, Tencent is a household name responsible for an app that has become a part of daily life – it’s called WeChat (“Weixin” in Mandarin). 

“It’s the universal connector in China,” says Matthew Brennan, who is writing a book on the history of WeChat, and regularly gives presentations about the app. “It’s the pipework for information. Everyone uses it, and people open WeChat around 40 to 50 times a day.” WeChat has more than a billion users and has features such as messaging, video conferencing, a social news feed, e-commerce, payment functions, smart city apps and transport booking, and much more. 

Mr Brennan believes it’s a common misconception – reported recently in the likes of The Guardian newspaper in the UK for example – that WeChat came to dominate in China because of state censorship of Western social media like Facebook and Instagram. 

“If you look at Line in Japan, or Kakao in South Korea, or Zalo in Vietnam, it’s been strong local competitors in Asia that have won,” Mr Brennan says, referencing the dominant messaging apps used in different Asian countries. 

“It’s winner takes all, and WeChat won [in China],” he says. 

Tencent is the world’s fifth-largest tech company by market capitalisation, overtaking Facebook this year and sitting behind only Apple, Alphabet, Microsoft and Amazon. It has flourished, mostly domestically, through the likes of WeChat, its app store and content provision with Tencent Video and Music, but in another important domain it has become a powerful player on a global scale.

More in the National.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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WeChat: the new normal for 900 million users - Matthew Brennan

Matthew Brennan

WeChat, Tencent's mobile platform, is now reaching 900 million users in China, and in four year time it has become an indispensable tool for anybody living in the country, says WeChat expert Matthew Brennan at InTheBlack. "WeChat is not a social media. Think of it as an operating system for your life in China’,” says Brennan.

In the Black:

WeChat’s reach has expanded into all walks of life. The effect has been that while you certainly can do business and socialise in China without WeChat, using the platform gives you direct and instant access to everyone. 

“It would now be very difficult to live in China and be a normal functioning member of society without having a WeChat account,” says analyst and WeChat specialist Matthew Brennan. 

“The a-ha moment for me was about four years ago when I used WeChat Pay in a convenience store for the very first time. I realised then that it was really cool, it was really convenient, and it was going to change the whole of China – and it has. I realised it was not just messaging, it had a much, much greater ambition, and that’s the way it has played out.” 

Brennan’s Beijing-based China Channel company charts trends and developments on the platform, while also offering training sessions for businesses that want to learn what WeChat is all about. There is one thing he always tells people during a training session. 

“The first thing I say is ‘don’t think of WeChat as social media. Think of it as an operating system for your life in China’,” says Brennan. 

“In China, we went from nothing to mobile payment. There have been credit cards but they have never been used in the same manner as they have in Europe or America. That habit of reaching for plastic whenever you have to pay for something, like the Americans do, was never ingrained in the Chinese.” 

These days, the Chinese daily press comes full of tales of small isolated villages where people are quickly dispensing with their traditional means of doing business – and WeChat is the leading alternative.

More at In The Black.


Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Can Facebook overtake WeChat? - Matthew Brennan

Tencent's WeChat has been a winner in China in terms of users but might even beat its Western competitors in terms of functionality, writes WeChat analyst Matthew Brennan at the China Channel. The bigger question is will the tech giants outside China ever be able to catch up?

Matthew Brennan:

Chinese users spend approximately one-third of all their time on mobile in WeChat. That presented a huge opportunity to build extra features and functionality on top of the basic messaging experience. And it was many of these features that hit the China market at exactly the right time, met the needs of local users perfectly, and helped propel WeChat to becoming the juggernaut that it is today. 

Classic examples include Shake-shake, Friends Nearby, Walkie-Talkie, QR Codes, Official Accounts, Mini-Programs, and of course WeChat Pay. 

It’s no coincidence that Tencent was the company to grasp this best, given their previous experience with flagship desktop messaging product QQ. Tencent CXO David Wallerstein had this to say: “When it came time to building value-added services around WeChat, it just came to us very naturally because we had just learned so much over a decade, probably like 12 years of learning by the time we got to WeChat… we also started thinking more about the economy, more about financial services, more about e-commerce, about how do you really transform a business or a hospital or a government using WeChat and I think we had so much experience with platform services and tying services together in a seamless way that when it came time to WeChat, it was like okay, good fresh platform, let’s get everything right this time.” 

The growth rate of new active WeChat users has been steadily declining for many quarters and many — myself included — believe it has pretty much reached a ceiling. The future and focus of WeChat will not be about gaining more new users, it will be about embracing it’s stated vision to “Connect people to people, people to services, people to businesses, and people to objects.” 

The digitalization of daily life continues at rapid pace in China through trends such as mobile payments, online-to-offline services, the sharing economy, smart retail and digital ID cards. WeChat acting as China’s great universal connector is at the very center of all of this and showing little sign of relinquishing its place at the forefront of Chinese innovation. The bigger question is will the tech giants outside China ever be able to catch up?

More at the China Channel.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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WeChat goes for more services, as growth stalls - Matthew Brennan

Matthew Brennan

Tencent's WeChat announced a record number of monthly users over Springfestival passing one million. But WeChat expert Matthew Brennan expects that growth in numbers reached its top, and WeChat will be adding more functionality to expand its business, he tells CNNMoney.

CNNMoney:

WeChat’s number of monthly active users popped above the milestone during the Lunar New Year holiday in February, its parent company, Tencent, said this week. It’s an impressive number, but it’s still well short of Facebook’s 2.1 billion monthly users or WhatsApp, which has more than 1.5 billion. Catching up with those totals will be tough. WeChat is the dominant messaging platform in China but has struggled to win over large numbers of users outside its home market. 

“The growth on WeChat has been slowing down consistently for the last two years,” said Matthew Brennan, founder of ChinaChannel, a WeChat-focused research firm. 

“It’s really topped out, I feel,” he said. “It’s not going to go much further.”... 

But user growth hasn’t been a priority for WeChat for some time, according to Brennan. Instead, Tencent is focused on pushing users to turn to the app for more and more activities, such as gaming, entertainment and payments. 

By getting people to spend more time and money on those services, WeChat has a lot of “untapped potential” for bringing in greater revenue, according to Brennan. “It’s not about new users anymore,” he said.

More in CNNMoney.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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How Alibaba and Tencent retail strategies differ - Matthew Brennan

Matthew Brennan

China is leading the way in digitalizing the consumer experience in retail, but both major competitors - Alibaba and Tencent - have different retail strategies, says WeChat expert Matthew Brennan to the News Lens. Alibaba focuses on the offline experience, Tencent's WeChat will stay online. In 2018 the battle will be on mobile payment, he adds.

The News Lens:

Matthew Brennan, founder of China Channel, a consultancy on China's digital market, said that the trend is apparent across all consumer-facing industries. "China is leading the rest of the world in terms of digitalizing the customer experience and blending this experience seamlessly between offline and online elements," Brennan said. According to Brennan, retailers are moving back to offline as online growth matures – being a purely online play will no longer sustain the rapid growth that Alibaba and Tencent are used to. 

Tencent’s payment service, WeChat Pay, already has about 800 million users in China, and together with Alibaba's Alipay, the pair dominate China’s massive mobile payment space. The majority of retailers here, from supermarkets to street vendors, now accept either or both forms of payment. As such, the latest official data showed mobile payments reached 81 trillion yuan in the first 10 months of last year, up 40 percent on the whole of 2016. While Tencent has its fingers in many pies, it is not a direct retailer, and instead relies on a partnership with e-commerce major JD.com in place since 2014 to drive sales through WeChat Pay. 

The two companies announced in October that they would expand the cooperation via the launch of the JD-Tencent Retail Marketing Solution, which according to a press release promises to “integrate insights on consumer behavior from Tencent’s social platforms with online and offline shopping data from JD and its brand partners.” Pushing into unmanned stores is thus a natural next step for Tencent as it attempts to remain relevant in "new retail" while building on its existing strength in the mobile payments market. 

"WeChat does not have ambitions to open its own stores across China, Tencent's strategy is to partner with existing retail players and help digitalize the retail experience," Brennan explained. "Both [Alibaba] and Tencent are now moving into a wide variety of vertical industries for a variety of reasons, retail though is the most important battleground for 2018. “In the short term, new retail is in large part about mobile payments. Tencent and Alibaba are blocking each other's moves to protect their market share in payments."

More in the News Lens.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form. 

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