By now it should be common knowledge that the messaging platform, WeChat , has completely taken over the Chinese mobile social media scene in the last three years. To entertain their behemoth user base of over 1.1 billion registered accounts and 500 million active users, Tencent has been beefing their app out with every feature you could possibly pack into one app.
Never shy to emulate their competitors, Tencent has developed a business model that thrives on taking market share from any profitable, innovative tech trend. Since China surpassed the USA to become the world’s biggest eCommerce market, it’s no surprise that Tencent incorporated an eWallet feature into WeChat last year, seemingly aimed at cutting into market share from Alibaba’s Alipay (Chinese: 支付宝).
So, in the past year, how has WeChat Wallet been implemented into the market? Who is leveraging this feature and how?
In the beginning, integration with WeChat’s taxi-calling feature made WeChat Wallet a hit with taxi drivers for it’s convenience. Outside of being able to conveniently pay for a cab, WeChat Wallet was also incorporated into some retail locations around the country. WeChat has struck deals with retailers ranging from legendary domestic tobacco-meets-fashion company SeptWolves to foreign big-leaguers such as Seven Eleven. Despite this, WeChat still hasn’t reached the ubiquity of Alipay, which consumers can use at nearly any location in China that accepts mobile payments. Also, this year Alipay incorporated a feature in which users can pay with a selfie. WeChat Wallet may have gained an advantage with its’ user convenience, but how could they possibly compete with a selfie payment method?
Despite such ingenuity, this years Lunar New Year marked a changing of the guard when it comes to mobile payments. WeChat Wallet saw a massive increase in active users overnight when an estimated 200 million users linked their bank accounts to WeChat Wallet to send and receive red envelopes (Chinese: 红包; monetary gifts of ‘lucky money’ traditionally exchanged during Chinese holidays) through the platform.
WeChat also recently made a break-out move when they incorporated city-level features to their payment function. Seeing this small victory for Tencent, Alibaba was hot on the trail with a comeback update for Alipay. Alibaba began incorporating city-level features just a few days ago right on Tencent’s home turf in Shenzhen.
With the addition of other home-grown competitors such as Weibo Payment also being released, the competition is unrelenting in China’s mobile payment market. Good luck to any foreign competitors. Apple certainly has their work cut out for them, that is if they ever manage to get Apple Pay approved by the government.