FinTech

The FinTech Story of WeChat

MEDICI

WeChat, which was developed by Tencent in 2011, is one of the top five instant messaging apps globally. In 2018, it grew its monthly active users to 1.08 billion (one billion daily active users). WeChat provides three major services – chat, wallet, and third-party services. Its chat services have messaging, voice messaging, and video calls integrated in it. WeChat Wallet enables users to pay bills, recharge mobiles, make purchases online, transfer money to other users, and make QR code payments at merchant stores. It also helps users to buy wealth management products, virtual currency, and gifting products. WeChat’s third-party services comprise subscriptions, online shopping, food delivery, cab riding, travel bookings, etc.

WeChat’s turnaround story started in 2014, when it launched the red envelope feature which allows users to send digital cash to their family members, friends, and users. This feature allows WeChat Pay to gain rapid user adoption. Within one month of its launch, WeChat Pay’s user base expanded from 30 million to 100 million users, and 20 million red envelopes were distributed during the New Year holiday period. In 2017, the transaction value of red envelopes touched $14 billion. The service was used by 768 million people in 2017, which increased by 10% during the New Year holiday period compared to 2016. In 2019, Chinese travelers made 1.2 billion purchases through the WeChat platform – the majority of the transactions were from Hong Kong, Macau, and Bangkok. The service is used by 823 million users, which is around an 8% increase compared to the previous year.

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According to the latest Chinese travelers’ data, there is a 14.85% increase in annual overseas visits of Chinese people from 10.5 million in 2000 to 156 million in 2018. Also, the total outbound trip expense has risen from $242 billion in 2015 to $250 billion in 2017 and is expected to touch $315 billion by 2020. Due to the increase in spending by the Chinese population on their trips outside of China, WeChat plans to bring foreign brands to its platform so that it could provide the same shopping experience to its customers as abroad.

In 2017, WeChat overtook Alibaba with 600 million active WeChat mobile payment users compared to the Alibaba-owned Alipay’s 450 million. However, at the time, Alibaba had a 54% share of the Chinese mobile online payments market compared to WeChat’s 37% share (40% in 2018). In 2018, WeChat Pay, which supports over 18 currencies, was made available in 49 countries.

Sources:

  1. WeChat, shape of the connected China - GAFAnomics - by Stéphane Distinguin (Founder & CEO of FABERNOVEL)

MEDICI Team

MEDICI

MEDICI Team is a group of content writers, bloggers, journalists, researchers, and editors from the MEDICI who collaborate to create FinTech insights.

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