Tencent, in cooperation with China Academy of Information and Communications Technology Industry and Planning Research Institute (CAICT), has released demographical and payment-specific details about its users in "Research on the economic influence of WeChat in 2017"《2017年微信经济社会影响力研究》(Apr 2018). This is much anticipated by marketers as WeChat has traditionally only offered such data to its advertisers.
Our team has peeled aside Tencent's marketing spin to summarise key data as well as takeaways for marketers to better plan their next Chinese digital marketing campaign.
(1) Who are WeChat users?
Let's start by assuming that WeChat users are only likely to engage with brands or buy if they are active users. Based on the statistics above, there are 900 million and 600 million Daily Active Users (DAU) and active WeChat Pay users respectively.
Though 60% of WeChat users (or 540 million) who are aged between 15 - 29 years old, it is important to note that only 40% (or 360 million) are seeking content through WeChat. In a separate report, Tencent noted that around 18% of users share brand-related content on WeChat Moments.
Takeaway 1: Brands may assume that even with an unlimited budget, only 18 - 40% of WeChat active user base may see their brand-related content. Therefore, they should adjust their campaign viewership projections accordingly, e.g. projected readership numbers X 0.18.
Many brands are location-sensitive as they may only have a store presence in certain cities. Taking a look at the above data, it seems that WeChat penetration rate is highest in first-tier cities (93%) but drops off substantially for the smaller cities.
Takeaway 2: Therefore, if brands are keen to reach out to second to fifth cities, they need to go beyond WeChat and explore other Chinese digital channels.
(2) What are the areas where WeChat users are spending on?
Based on the above data, WeChat Pay penetration in various retail settings have increased across the board. The top 3 verticals are supermarkets, online shopping, and food. Interestingly, these verticals involve high-frequency spending where WeChat provides additional convenience.
Takeaway 3: Brands, especially those in the top three, should actively evaluate how to enhance their WeChat marketing efforts. Our team has compiled a list of ideas for your consideration:
- Content driven marketing. Successful brands typically showcase who, how and why lead customers are using their products or services
- Offer limited edition products
- Publicise flash sales every morning at a set time (say, 7:30am)
- Preview the products from the next sale
This also applies to overseas brands targeting Chinese tourists as these users are already spending on travel (35.8%) and likely to stick to their payment habits at home and abroad.
(3) Any case study of social e-commerce on WeChat?
There are two case studies in this report where Tencent cited using either excellent, relevant content (Mogujie, an e-commerce platform) or in-store QR codes (Yonghui, a New Retailer seeking to provide online/offline shopping) to motivate users to download Mini-Programs and make it easier to purchase.
In particular, since WeChat provides more granular information about users, e.g. location and interests, relative to a brand's own app, this facilitates more personalisation for promotional activities, e.g. send the right type of return purchase coupons to users. It was cited that Mogujie enjoyed an 18% conversion rate for such coupons (way above industry average of around 5-8%).
Takeaway 4: Despite Tencent's active promotion, Mini-Programs may not be worth the additional investment for all brands. But brands should understand their customer journey to actively explore using relevant content and in-store QR codes to spur conversion and purchase.
As you can see, Tencent is actively seeking to facilitate timely promotion and integration of online and offline experiences, e.g. QR code promotions, to deliver a better experience to users and enhance conversion rates as well as generate more UGC (user generated content).
UGC is something which Tencent left out of this report as it is hard to measure such impact. For B2B and B2C brands, no incentive or marketing programs are as good at selling as your customers (social proof). Therefore, I encourage brands to reexamine their customer journey and how to wow customers at each step to encourage UGC that can be shared via WeChat or other social media (see our earlier Chinese New Retail case study).
Our team specialises in value-driven and authentic digital & content marketing for your attraction. With expertise in end-to-end Chinese digital marketing (Baidu SEO, Wechat and Dianping marketing), we can help you to adopt a more customer-centric approach. If you are keen to get started, please check out our website and get in touch!