While many in the west have heard of WeChat, the most popular social network in all of China, many of them do not fully comprehend its functionality and impact. For people in China, it doesn’t matter that they can’t use Facebook, Twitter or Snapchat due to the country’s internet firewall, because they have WeChat. This was hammered home to me on my first visit to China. No google maps, no Uber (then) and the whole event was a huge challenge. Part of this challenge for me was a learning in how to engage with and work in the China market.
In only five years, WeChat has grown to nearly 800 million users, with most accessing the platform via smart phone but more and more using the platform across computers/tablets as an extension of every facet of daily life. Roughly 730 million within China but a growing number are seeing the value both in the platform itself but also for engaging with people in and around markets linked to China. With a population of nearly 1.4 billion, this means that over half the country use this one platform. In fact, in tier one Chinese cities (the most developed cities like Beijing, Shanghai etc.), WeChat’s penetration rate is around 93%, meaning that you will seldom run into someone in these cities that doesn’t use WeChat in one way or another. Engagement in the app is also very high, with over two thirds of users using it over 11 times a day, and over one third using it more than 31 times a day. This hits home in every meeting you attend with people offering QR codes, often with or in the place of business cards. Specific groups are created after the meeting to enable ongoing conversation with all parties, an elegant solution to the group email.
To get an understanding of the current capabilities of WeChat, and why it is so popular in China, imagine WhatsApp combined with Facebook, Instagram, Twitter, Skype, Tinder, eBay, PayPal, Uber, Google Maps, Slack, Apple Pay and many more apps used by western consumers. WeChat allows users to do everything from communicating with friends, staying up to date with the news or celebrities, booking doctors’ appointments, hailing a ride or paying bills. All of this is done without ever having to leave the app. The diversity of this functionality can be seen in this video put together by the New York Times.
The value for companies to use the platform is a little different. Companies can be granted permission to have what are known as ‘official accounts’. These accounts allow companies to not only distribute content visible to users, but to also take advantage of the full functionality of the platform, similar to 3rd party apps on smartphones. In this way, WeChat creates additional ways for customers to interact with companies. The importance of this is like the ‘verified’ component of Twitter and helps ensure a company is who they say they are. There is also the ability for companies to have internal communication amongst teams, similar to the way the Slack currently does, providing integrated notifications, appointments and events details.
Recently, I was at an event with a group of people from the Australian Investment community and those of us that had WeChat were connecting on the platform, talking about influencers to follow and groups to join, while others were looking on in bewilderment. It was a really interesting illustration of the importance of knowing the language and preferred method of communication for the market you want to do business with. For me, this resonates beyond WeChat and extends to any market, customer or relationship you are looking to cultivate. I believe this displays the importance of knowing your audience and communicating with them in their preferred style.
For companies that are looking to the Chinese market, no matter who your customer is, they’re on WeChat. All of your Chinese competitors? They’re on WeChat too. Not being on WeChat places you a step behind in the increasingly competitive Chinese market.
However, being on WeChat does not guarantee your company’s success in China, just like setting up a Twitter page for your company doesn’t guarantee success in the west. WeChat is simply one of a selection of tools required for companies that are looking at, or considering entering the biggest market in the world.
At MAI Capital, we work with companies looking to enter the Chinese market. We understand that it takes more than capital and a WeChat account for success. We are always looking to engage with early stage companies with an eye to China within our focus sectors: Health, Agriculture, Education, Logistics and Clean Technology.