Foreign businesses who are interested in breaking into the Chinese market would be forgiven for wondering why WeChat is successful in China.
After all, it's just another messaging app, right?
Wrong.
Not only is WeChat China's largest and most dominant social network by far, but it's so crucial to reaching potential clients here that it may also be considered an essential part of China company setup too!
Here at Hongda, we'd go as far to say that foreign businesses who're working with us to open a Chinese company, such as a WFOE, should also be registering a WeChat account at the same time too.
In fact, we've already written on the subject here:
But although we have strongly stated the app's importance to doing business here, let's change tack a little and get to the bottom of why WeChat is successful in China...
What Is WeChat?
WeChat (微信) looks, at first glance, like a lot like WhatsApp - a messaging app where people may connect with their friends and send voice, video, image, and text updates.
Indeed, in 2011 when it was launched, it was mooted by its creator Tencent as being China's answer to Kik, Viber, and WhatsApp.
But fast forward 5 years to 2016, and WeChat is undisputed champ in China's vibrant social media landscape, knocking out its rivals and enjoying a huge active user base of around 697 million users.
How did this happen so quickly?
There are 5 reasons that can explain why WeChat is successful in China.
1. Many Features
WeChat offers a virtual smorgasbord of useful functions, all within the one app:
Now it's possible to use WeChat to send a friend a voice message while at the same time paying for your groceries.
Compare this to Facebook, the world's largest social network, and you can see why WeChat, despite being Chinese in origin, has become so popular. Simply put, WeChat is a multi-purpose platform that offers both companies and users real convenience by being able to perform a plethora of everyday activities without needing to switch between apps.
2. Size
While Tencent, WeChat's creator, may not be globally famous, Shenzhen's tech giant was already a huge player in the Chinese social space with its still-popular network QQ.
Any visitor to China before 2011 would be well familiar with QQ's high-pitched cheeping as messages were coming in, and so Tencent leveraged their large user base of hundreds of millions of QQ users to migrate them across to WeChat, as all that was needed to sign up was, you guessed it, a QQ account.
Unlike other Western apps, the local users' existing relationship with Tencent made it easier for WeChat to steal a march on its competitors in China as it was easy to get started.
3. The Great Firewall
Facebook, Google, Twitter, YouTube, and many more foreign sites have been blocked in China since before 2010.
WhatSapp, Kik, and Line were also spearheading mobile communication apps, with Facebook Messenger coming a little later.
But the censorship of certain foreign sites and apps did WeChat a favour, when you consider that this meant that some of WeChat's potential competitors such as Facebook Messenger were (and are still) simply not even on Chinese users' radars at all, due to not being available, this left the field open to WeChat to hoover up the many users who are thirsty for mobile communication apps.
「If there had been no restrictions for foreign companies operating in China, I imagine that WeChat would not have been the dominant chat app [because] they would have been late to the game,」 says Charlie Smith of Greatfire.org (Source: TechInAsia)
4. Mobile Payments
WeChat, unlike many of its competitors, can be linked to your bank accounts and credit cards.
Using a QR code system, users are able to pay for goods and services just by bringing up their 'wallet's' QR code on their screen, which is then scanned by the store to take payment from the related account.
It is also fascinating that users are able to transfer funds, for free usually, between each other, which is handy when splitting a bill for instance.
This has revolutionised payments in China, which is around 5 years ahead of the West in this where contactless payments and new services such as 'Apple Pay' are only just becoming widespread in 2016. WeChat has been doing this for years!
Users may now use WeChat to:
Pay for shopping
Buy items directly from online stores
Purchase train tickets
Pay for doctor appointments
Pay rent and utility bills
With a healthy bank balance and a smartphone equipped with WeChat, there is almost no reason to carry cash in China any longer, and paying through WeChat usually attracts no additional fee too!
5. Business Friendly
Unlike, say, Facebook, where business users are almost completely forced to pay to promote their pages or content in order for them to be seen by followers, WeChat allows businesses to open an official account and gain a following on the platform for free.
We need to understand what is WeChat's weapon to attract businesses:
Official account which is like a mini website with individual pages, but within the app
Ability to post daily updates, taking the form of a blog post, video, infographic, or photos, to the subscription accounts
Functionality for customers to pay for goods and services directly through their WeChat
Businesses with enough followers, more than 100,000, are allowed to purchase ads and promote their accounts, products, and services
Take that Facebook!
WeChat is not only useful for users, but also allows businesses to tap it into its mighty user base of almost 700 million users, which is why we see it as an essential component of China company setup for foreign businesses.
BUT...
You do need to open a legal company in China such as a WFOE or Joint Venture in order to open a WeChat business account, and it is mainly in Chinese and so you may need local assistance to manage your business account (although you can publish content and pages in English if you like).
We practice what we preach! Why not follow Hongda on WeChat for regular updates for anything to do with doing business in China and Hong Kong?
Please scan the QR code below using WeChat, and get in touch:
Your Thoughts...
What do you think about WeChat? Is it a platform you'd want to set up along with your Chinese company?
Are you already using WeChat? How does it benefit your business?
Do you have any WeChat tips for fellow foreign business people in China?
Please let us know if you have any comments or questions about WeChat or China company setup and we'll be happy to help, just leave them as a comment below!