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The strategy of Tencent Holdings Ltd. for the expansion of WeChat Pay
Overall, it's pretty simple: Follow the money (from tourism).
Grace Yin, director of international business operations of WeChat Pay, summarized Tencent's approach to the RISE Conference earlier this month in Hong Kong:
a Chinese tourist, so this place is our target.
It's a smart strategy. Simple, elegant and convenient with WeChat Pay now accepted in 25 countries.
But it is also decidedly unambitious. In these 25 countries, the focus is only on the merchant side of the equation – accept money from Chinese travelers.
"We have no plan in the next three years to make a payments portfolio outside of China.Kong and now also Malaysia," said Yin Ma. first thought: What a wasted opportunity
I understand his thinking.WeChat is a decidedly Chinese phenomenon.While it is ubiquitous and even crucial for everyday life, it is the application of cat No. 1 in only three countries, according to the Global Annual Report published by WeAreSocial and Hootsuite.WhatsApp is the leader in 128 countries while Facebook Messenger reigns in 72. Even Viber is more prevalent.
Hyped, But Local
WhatsApp and Facebook Messenger dominate globally WeChat even falls behind Viber
Source: Global Digital report 2018
But these apps do not offer payments in all these countries .Whether WhatsApp and Facebook Messenger count more than Users, the depth of WeChat's services, including reservations, bike rentals, payments, MiniApps and news, make it the most powerful in the world.
four years ago by doing nothing to expand its feature set. (Facebook sees at least the potential, having decided to embark on water by deploying WhatsApp Pay in India, a project that has recently been facing privacy issues.) Meanwhile, its own Facebook Messenger application has to hardly innovated. 19659005] Tencent's lack of interest in taking WeChat Pay for a wider market is based on the fact that the rest of the world is relatively small.
The headquarters staff says that only 20% of the users of the application are registered outside of China. to Matthew Brennan, the founder of China Channel, a WeChat consulting company. That would bring the number to about 200 million, a figure I can hardly believe. In badyzing the data from the survey of Global Digital and after discussions with other people in the industry, I would say that the figure is closer to 100 to 150 million. I am ready to be corrected if anyone has reliable data that they can share with me .
Potential
WeChat / Weixin is a very local product for China. Still, its user base abroad should not be ignored
Source: Bloomberg Opinion
I asked Tencent to make a comment, and they refused to provide a geographical breakdown. I think it's a mistake and part of Tencent's insular mentality towards WeChat, WeChat Pay and their potential.
Having 100 million cat users is a golden opportunity, not an unimportant market. Apple Pay has only 127 million, or 16% of iPhone users, according to Gene Munsters of Loup Ventures. And it's not even a wallet service, which allows for person-to-person transactions. The recent introduction of Apple Pay Cash in the United States shows that even Cupertino sees the potential for direct money transfers through P2P. The Japanese company Line Corp has taken the bandwagon, and it's a good bet that Anti Financial will try to make AliPay more global.
Big Talk
WeChat comes in third, although 80-90% of this base is in China. 19659010] Source: Global Digital
An objection that I heard about WeChat Pay spreading its wings concerns Tencent's privacy and cooperation with the Chinese authorities. But user habits, even after the Cambridge Analytica scandal say that people do not care (even if they should). And when it is presented with a chat application with better features, like a mobile wallet, I think many will switch. Thus, the 100 to 150 million non-Chinese users of WeChat could climb up to 250 million in a short time if Tencent offers the same type of functionality as the domestic version.
One day, the cat and the wallet will be an obvious combination like mobile phone and camera. Tencent did a phenomenal job in making WeChat Pay ubiquitous in China. It's wasting that lead if it refuses to have global ambitions
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Tim Culpan at [email protected]
To contact the editor responsible for this story:
Katrina Nicholas at knicholas2 @ bloomberg.net
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