Tencent didn’t have a great 2019, but WeChat’s status as a super-app has incredible monetization possibilities as the app has been a user-experience fanatic up until now. China’s app ecosystem is so far superior to the Western version of the internet, and it’s mostly thanks to mini-programs.
If WeChat payments surged 62% YOY in 2019, WeChat users spent $115 Billion via its mini-programs in 2019. These are basically lite portal access to other businesses, E-commerce and other services.
So while 1.2 Billion people use WeChat, it’s the portal access to all of its partners that is really fuelling incredible revenue generation. Over 50 million individual businesses were active users of WeChat Pay, one of the country’s two major third-party payment platforms, accounting for nearly 80 percent of the country’s total.
Not bad for the lowly QR-code isn’t it?
Mini-programs are apps within apps. Tencent’s WeChat is the best positioned on the planet to benefit from this kind of traffic, embedded mobile interoperability, and online to offline conversion.
Think of this way, it’s all about convenience. Taking orders through QR codes has become trendy at restaurants, with 53 percent of diners chose to pay bills through WeChat Pay. This of course, makes apps like Instagram and Snapchat look archaic and somewhat irrelevant for real world transactions. This is one of the reason’s China’s app ecosystem is so much more dynamic.
China has chosen the UX over Ads as the central pillar of how apps bring value (with the exception of ByteDance and Baidu to some extent).
WeChat saw more than 1.15 billion monthly active accounts in 2019, increasing by 6 percent from the same period in 2018. Tencent is expected to focus on increasing monetization strategies for WeChat in 2020, as user growth has reached a plateau and ByteDance’s ecosystem is rising and gaining in mobile search on Douyin/TikTok and Toutiao.
The insights come from WeChat’s conference. At the beginning of each year, a large crowd of developers, content creators and digitally savvy business owners gather in the southern Chinese city of Guangzhou for the WeChat conference, the messaging giant’s premier annual gathering.
The event is meant to give clues to WeChat’s future and the rare occasion where its secretive founder Allen Zhang emerges in public view. In 2020 he did not show up.
In in-app innovation China has in the last 5 years according to the Last Futurist, overtaken the U.S. Instagram’s repeated failures to create social commerce paths to purchase and Snapchat, Pinterest immaturity also point to this, as apps like TikTok change how GenZ might find products in the future.
WeChat was also going to be the super app that benefited from mini-programs the most, but in 2020 I expect them to reach maturity. WeChat is also going to do well with sellers doing live-streaming in app, which they will use to catch up to Alibaba’s successful strategy doing this. Tencent is already well entrenched in the gaming sector.
China is a mobile friendly economy. The utility of mini-programs is so strong for such a population. Mini programs have become an important component of the omnipresent messaging app. The miniature apps that live within the platform take just seconds to load, allowing users to avoid downloading another bulky app if they just need some limited additional functionality.
This definition comes from SCMP, and I think in a nutshell it shows that portals of apps work better than stand-alone lite versions of apps. While Facebook acquired its way to success with WhatsApp and Instagram, it’s not even a real portal for other businesses outside of targeted Ads.
At the Last Futurist, we are keeping a keen eye on mobile innovation and mini-programs appear to be winning the race for consumer convenience and user-experience. Mini-programs give a super app like WeChat the ability to be a service utility where users can find anything.
Mini programs already allow for all kinds of functions, including renting bicycles, buying tickets, playing games and even fortune telling. So in 2020 China has superior online to offline (“O2O”), than the United States and with more competition in E-commerce with JD.com and Pinduoduo competing with Alibaba, mobile retail is much more exciting there than in the West where Amazon has a somewhat bullish monopoly on the sector.
The West also has no equivalent to startup darlings such as ByteDance which are combining youth culture, inspiration, music and mobile search and Ads in new ways. ByteDance will continue to innovate while Facebook will continue to stagnate since they are a pure-play Ad-firm at this point who fail mostly at anything else they try from VR, to hardware to blockchain to dating.
There are around 2 million mini-programs on WeChat, which is like an app portal unto itself. WeChat bundles so much value. Mini-programs has been a big winner for China’s E-commerce and the ability of citizens to find services and utilities they need right away.