Wechat is different

WeChat had 963 million monthly active users in August 2017 and still rising.

During Chinese New Year 2017, WeChat users sent each other 46 billion cash gifts via virtual ‘red envelopes,’ according to Reuters – up from 8 billion in 2016.  For comparison, albeit an unfair one, Bitcoin currently has around 338,787 transactions per day.

Success Factors for WeChat as a payment platform include the ubiquitousness and ease of use.  Since every individual or small trader in China can use WeChat to receive money on personal account on any type of smartphone, with no complex setup or fees, it’s rapidly become the standard for consumer payments.  [There’s talk of Apple Pay opening up a similar service, but at the moment the inability to accept payments and the limitation to apple devices make Apple Pay a very limited competitor to Alipay and Wechat.]  The fact WeChat pay is tied into the social messaging app makes it very easy to transfer funds to contacts, split bills, send gifts etc.  The core payments app is extended further with a growing number of plug-in mini apps which allow you to manage your daily life without leaving the app (not all shown here but you get the idea):

The standard WeChat accounts have a limit of 200,000 RMB (roughly 30,000 USD) but a silent change was introduced in October which prompts the user to open a WeBank account to increase the limit (only available with Chinese ID card number).

The sheer size of the market helps too: looking at the stats for total internet users:

  • China:  721,434,547 (52.2% population, 2.2% growth)
  • India:  462,124,989 (34% population, 30.5% growth)
  • USA:    286,942,362 (88.5% population, 1.1% growth)
  • EU:      433,5651,012 (85.7% population) of which the highest numbers are:
    • Germany:  71,016,605  (88 % population, 0.6% growth)
    • UK:       60,273,385 (92.6% population, 0.9% growth)

Quick links:  EU populationChina population, EU internet stats, world stats.

Conclusions?

  • India with already high figures and 30% growth, is now a battleground for online payments, with Paytm postcards (Ant Financial), Hike Blue Packets (Tencent) and WhatsApp (Facebook).
  • China growth continues but at a slightly lower pace, which may reflect economic inequality and saturation amongst new economy participants.
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