It has been almost 4 years since Tencent launched Wechat. It went from a simple instant chat software to an “all-round” player. Wechat is not only a software anymore, but “everything” in user’s life. It has integrated most frequent and useful “city functions” in these two years.
The number of current monthly daily active user increased constantly to over 549 million.
According to the report from Tencent, a typical Wechat user’s day is full of Wechat. The first thing to do after getting up is to read “Moments”, and play online games on the way to the company. Before work, Wechat users buy breakfast not in cash, not by credit card, but by Wechat pay. And at 18:00, the time for diner, users also use Wechat pay to buy their diner. Wechat pay users are now 400 million. It occupies 73% of overall Wechat users.
The payment behaviour is changing. Five years ago when you entered into a convenient store, cashier asked you if you would like to pay by card or in cash. But now when you entered Lawson, they will say, would you like to pay by Wechat pay or Alipay? The stimulated point to push people to pay by Wechat is that customers can get some discount by this way. Chinese customers like petty favors. Discount has a big power to attract Chinese customers.
From data collection, Wechat pay users tend to pay for “light consumption” such as mobile phone credits charge, hongbao payment etc. Most people pay less than 1000 yuan by Wechat. Wechat pay in this period plays a role of “small change wallet”.
However, the reason why Wechat pay is still a “change wallet”, we need to go back to Alipay. The launch of Alipay has a strong time stamp. It is an essential outcome of e-commerce. When a transaction is done in Taobao, payment is inevitable. And Alipay accumulates users with the development of Chinese e-commerce. Alipay also has the support of Taobao and Tmall. These two giant e-commerce platforms occupies 80% and 50% market share of C2C and B2C online shopping market. Alipay has cultivated the payment habits for most online buyers. In addition, the online financing product Yu E Bao has attracted both high net worth users and frequent users.
Going back to Wechat pay, Wechat per se is an instant chat plus entertainment software. However Wechat is developing to integrate more and more functions, shopping, transport, medical service etc. They need time to invert the positioning and grab Alipay users.
It is undeniable that Wechat is doing the right thing, and going on the right pathway. However, in the short-term perspective of view, Wechat pay cannot shake the position of Alipay. Wechat has a huge amount of users, the same as Taobao and Tmall. So the right thing to do for Wechat pay is to differentiate itself from Alipay while the aim is not to take place of Alipay.