China’s WeChat Wallet is expanding into global markets, but key to its success will depend on both user and vendor uptake.
Much has been written lately about the success of China’s social commerce sensation, WeChat and its payment capabilities in WeChat Wallet. As Tencent expands the app and the wallet globally, its biggest challenge will be persuading international audiences and vendors of its merits.
Chinese users of Weixin (as it is known in Mandarin) spent much of 2015 discovering all the new ways they could use the wallet’s payment services – from paying utility bills, splitting dinner bills with friends, to booking and paying for movies and taxis, all from their phones.
Vendors, including Uniqlo and McDonald’s can also facilitate in-store payments by scanning a QR code from the user’s mobile phone.
In a nutshell, the WeChat payment service in China allows users to pay for products without having to exit the WeChat app.
Some of us outside of China have been wondering when the Tencent-owned app would open its wallet to international markets, and why other global messaging apps, (read Facebook here) haven’t followed suite.
But this month, Hong Kong joined South Africa as the first two international regions to have full access to the wallet capabilities.
In Hong Kong, the service is being marketed as WeChat Pay. A restricted version was launched in Hong Kong last year, in partnership with UNICEF.
This latest version however, gives unrestricted use of the Wallet’s capabilities. Currently, Wallet users in Hong Kong have access to ticket and transport purchasing services and travel products only.
How does WeChat Wallet work?
To use WeChat Wallet in Hong Kong, users connect a credit card (currently MasterCard or Visa) to their WeChat accounts.
They then create a six-digit pin number. This password will be used for every transaction made through the user’s wallet feature.
China CITIC Bank International (CNCBI) is one of the first brands to give WeChat users in Hong Kong a Wallet e-payment option.
It is offering a 50% promotional discount on its travel insurance package when purchased through the WeChat app. Users do not need to be an existing customer of the bank to access the promotion.
This is a clever marketing ploy for the bank. Firstly, it is able to target a younger demographic of users on WeChat.
Secondly, CNCBI demonstrates an innovative edge in adopting WeChat as part of a marketing strategy – not something banks in Hong Kong are traditionally known for.
How is WeChat Wallet being marketed to international audiences?
1. Chinese New Year lucky red packets
For Chinese New Year, WeChat offers a lucky red packet (hong bao) feature, which has grown in popularity over the years.
During Chinese New Year 2015, WeChat says it delivered more than 1 billion red packets. This year, that figure ballooned to 8 billion red packets on Chinese New Year’s Eve alone.
Here’s how it works:
1. Red packets can be sent from within a chat in the same way a user would send a photo.
2. The user fills in the number of red packets they want to send within the group, how much money, and attach a greeting.
3. Payment is handled by WeChat Pay and then authenticated with the user’s pin.
4. Each person in the group then receives a red packet with a randomly allocated amount.
Red packets can also be sent between individuals.
WeChat has used this same concept to launch its Wallet in Hong Kong. (In this market, the red packets are known as ‘lai see’).
Napoleon Biggs, co-founder & commercial director at Purecomm Retail Software, says the gamification element around a cultural practice to draw awareness to the wallet in Hong Kong is very clever.
He says a sense of urgency and fun is created as users rush to ‘grab’ red packets as they appear in their feeds. As users collect or miss out on lai see they post stickers such as little caricatures dancing with glee.
From a viral marketing point of view it’s very clever to be feeding off people’s good, generous, harmless greed.
There is often resistance to mobile payments, so WeChat’s challenge will be ensuring users have a reason to continue using the wallet function beyond the Chinese New Year’s lai see promotion, he adds.
Apart from sending and receiving money in Hong Kong currency, users with a Mainland Chinese WeChat account can switch between wallets to receive amounts in RMB.
2. Western social media platforms
In a touch of irony, WeChat is promoting its Hong Kong and South African services with dedicated Facebook pages. (Facebook is banned in China). It’s also using YouTube, region-specific websites and its Chatterbox blog to reach international audiences.
It’s South African Facebook account has more than 35,000 followers and in Hong Kong, close to 95,000.
What does this mean for brands?
Currently, users in Hong Kong and South Africa have a limited number of wallet services available to them compared to their Mainland Chinese counterparts.
WeChat will need to actively recruit more vendors and brands to its international markets to keep users interested in the wallet feature.
WeChat Wallet however has a number of advantages over existing mobile payments such as Apple Pay. Firstly, WeChat can be downloaded on Android, BlackBerry, iOS, Symbian, Windows operating system, and also offers a web version for desktop.
It has the weight of 650 million users behind it as an enticement to brands and vendors.
Finally, WeChat and WeChat Wallet have evolved with China’s mobile first consumers. As such, it will have particular relevance to the emerging and mobile first markets of Asia and Africa.
Tencent does not release geographic breakdowns of its users, but WeChat marketing agency, Walk the Chat, says the app’s major appeal outside China, currently lies with Chinese speaking communities in other parts of Asia.
“WeChat outside China is currently mostly confined to regions having a significant Chinese-speaking population, such as Malaysia, Taiwan, Singapore and Hong Kong,” writes the company’s blog.
“In such places, it is a growing force and being an early-adopter will get [businesses] an outstanding return on investment. In other countries, it might be wise to wait before significantly investing into ramping-up your WeChat strategy.”
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