Tag Archives: wechat

Inside China’s Mobile Payments War

In 2018, China is an almost entirely cashless consumer economy, where popular mobile payment apps such as WeChat Pay and Alipay have enabled consumers to go straight from cash, to smartphone payments, leapfrogging the use of credit cards and cheques.

One of the world’s leading players in mobile or e-payment, China saw $15.4 trillion worth of mobile payments handled by third-party platforms in 2017 – more than 40 times the amount processed in the US.

Chinese consumers can buy a pancake at a roadside breakfast stall, order food online, pay credit card bills, or manage stock accounts, all with just their smartphone. In fact, mobile payments are so prevalent that use of cash fell from 63% of transactions in 2011 to just 33% by 2016.

When Alibaba founder Jack Ma carved out his payments business from the ecommerce giant in 2010, he pulled off a coup with multibillion dollar implications. But it was a move by WeChat a few years later that really set the category alight.

The sending and receiving of red packets containing cash (also called lai see in Cantonese, and hongbao in Mandarin) at Lunar New Year is an important tradition across China. But historically red packets were always tangible items, real cash in a paper envelope. Then, in 2014, WeChat introduced digital red packets. The ability to send festive cash to family and friends using just the WeChat Pay mobile payment platform. It was a revolution, and 4 years later in 2018, the idea of digital red packets had caught on to such an extent, that 80% of Chinese consumers sent a red packet via WeChat. This year only 69% sent a physical red packet.

WeChat’s success with digital red packets introduced and popularised the mobile payments category with Chinese consumers, and built a platform for the adoption of wider mobile payments functionality across money transfer, taxi ordering, online shopping, bill settlement, wealth management, for both WeChat – and it’s competitors.

Wireless Payment Methods

In fact, Alipay, owned by Alibaba, now handles nearly 54% of total mobile payment transactions, with WeChat Pay, owned by Tencent, processing around 39%. Across the category, the number of transactions made through non-banking mobile apps increased from 3.8 billion to more than 97 billion over the period 2013 to 2016, and research firm eMarketer recently estimated that more than 61% of global mobile payment users in 2018 are located in China.

Alipay and WeChat Pay have also made their presence felt abroad. Both companies extended their payments services to hundreds of thousands of merchants in regions like Southeast Asia and Europe, targeting outbound Chinese travellers and encouraging them to settle their overseas shopping bills with the apps. Adoption is still low, but merchants are keen to  facilitate easier transactions for high volume and wealthy Chinese tourists.

Within China however, the game is up. The dominance of mobile payment means not only that companies like Alibaba and Tencent manage consumer financial transactions, but as a by product they also control huge lakes of valuable personal data. Already this data is being used to close the loop on the consumer purchase cycle, and up-sell other financial products such as loans, or retail experiences. Alipay has also built Sesame Credit, a personal credit rating platform and Chinese government social rating system, linked to it’s mobile payments footprint. While English language media tends to describe Sesame Credit as an authoritarian system straight out of Black Mirror, Chinese social media users seem to focus more on the advantages than the burdens.

Ay, there’s the rub! As the West agonises over Cambridge Analytica and GDPR, WeChat and Alipay have already built the future of mobile payments. Convenience trumps all, if you let it.

Below we’ve collected key takeaway resources covering WeChat, Alipay and the mobile payments ecosystem in China.

Mobile Payment Usage in China 2017

Tencent: The Growth of the Digital Payment Ecosystem in China

Social Networks & Digital Payment in China

Alipay and WeChat Pay: Reaching Rural Users in China

Digital transformation in China – Take aways from the Alibaba Global Dreamer Program

 

A Quick Guide to Social Media in China

China’s social media landscape has proven a fast moving target. Ogilvy have just released the latest in their guides to the market highlighting the (mostly) differences but sometimes surprising similarities to global platforms.

The big story is the continued rise of WeChat, with the Tencent owned platform taking on the role of multiple Western platforms in China. Video sharing makes a first appearance, inspired by Vine. The major players are Sina owned Meipai and Tencent’s 微视 plus WeChat’s “Sight” functionality.

One of the few western platforms not blocked in China remains LinkedIn. In a market where networking is done face-to-face there are questions as to cultural fit, but with a China office this is clearly a long term bet. There are definite opportunities for brands.

China Social Media Landscape [2015]

Social Media In China

Previous versions of the infographic can be found here.

APAC, the $6bn Mobile gaming opportunity

With close to $6 billion revenue, Asia Pacific is the largest mobile gaming market in the world. Led by Japan, China and South Korea, the category is still growing at 25% annually across the region.

We chat to Jun Lim, Senior Business Development Manager and Lison Chen, Senior Account Manager at AppLift about this promising yet “very fragmented” market opportunity.

DIA: What are the biggest challenges for mobile game advertising in Asia?

JL & LC: The Asian market is very fragmented. Each market is different in terms of language, culture, and economic levels. Advertisers in different markets have different levels of understanding regarding the business model and traffic sources of mobile advertising, and traffic is still centralized by either big international players such as Facebook, Google, and Inmobi or local players such as Wechat in China, KakaoTalk in Korea, and Line in Japan. It is important to understand the situation and preferences in each country, and have a localized strategy to better satisfy the advertisers’ needs and wants.

What are the key opportunities?

The Asian market is still growing. Due to the rise of smartphone penetration and shipments, especially in Thailand, Vietnam, and Malaysia, we continue to see rapidly growing markets in South East Asia. Mid-mature markets such as Korea, Japan, and China are the top countries in terms of revenue in Google Play and App Stores. Mobile marketing trend is changing rapidly into performance-driven, meaning that it is possible to do campaign with measurable numbers.

How is AppLift positioning itself in the region? Which markets have the strongest potential?

AppLift positions itself as a data-driven app marketing platform that helps advertisers to handle the full spectrum of user acquisition. Additionally, AppLift highlights its LTV optimization technology that enables quality user acquisition on a performance basis. For example, in Korea, AppLift ran a non-incentive marketing campaign for RealFarm, a mobile farming game from NeoGames that delivered real vegetables to a few users who reached a certain level. AppLift focused on this interesting aspect of the game, and few months after the campaign, the fact that the game delivers real veggies went on viral through AppLift’s various media partners, resulting in a ROI of 1200%. It was a result of both NeoGames’ well-developed game contents and AppLift’s marketing strategy.

Do you see clients using mobile for brand driven campaigns? How do you position the connection between mobile and other media?

Branding can definitely help to increase the performances of mobile game advertising. Supercell, for example, spent millions of dollars on branded advertising for its game Clash of Clans across multiple channels such as metro, OOH and TV in Korea. Supercell’s massive promotion earned the game the number 1 position in the gross chart on Korea’s Google play even without using [the mobile platform] KakaoTalk. After the success of CoC, it has become quite a norm in Korea to do a huge scale branding / offline campaigns as in the case of mobile games such as Summoners War and Line Rangers. Mobile is such an real time channel in this sense, and brands are really getting to grips with the connection to other media.

Mobile ads have a reputation for low – or at least hard to track – performance. How does AppLift overcome this? Is data a big part of your positioning?

Based on big data, AppLift’s programmatic buying algorithm can target only the relevant audiences and content for a certain game. It can optimize campaigns and target performance improvements against CTR or revenue. These data driven techniques are very standard to advertising globally, and it is great to bring them at scale to APAC markets.

What is AppLift’s strategy to take on the APAC market?

With advanced technologies and know-how in each Asian market, AppLift plans to provide one-stop advertising/user acquisition services to advertisers. Our goal is to help advertisers connect their games/apps to the targeted Asian markets effectively through our technology, data and services.

What is your advice for brand marketers in one sentence?

Asian markets are sexy but challenging. Brand marketers should prepare various advertising strategies to adapt to local markets.

Thank you.

Market Overview: The Rise of Asia’s Mobile Messaging Apps

The emergence of mobile messaging apps has been one of the big tech – in fact any news category – stories of recent years. Both globally and in Asia.

Disrupting everyone from Telcos wedded to SMS revenue, to established social networks such as Facebook, to the Chinese government, apps have been a big hit with consumers. Continue reading Market Overview: The Rise of Asia’s Mobile Messaging Apps