Moving goalposts: Will WeChat’s word games hit the mark?

WeChat is finally focusing on money rather than user numbers, directing traffic to sellers’ mini programs inside the app.

Photo from CFP

Photo from CFP

By LU Keyan


WeChat has never been in a rush to monetize its billion users, but Tencent seems to be finally focusing on money rather than mass appeal.

In a meeting this year, FAN Yijing, head of Tencent’s smart retail, laid out an e-commerce blueprint for the social media giant: “We want to make online marketplaces better and more efficient.”

Smart retail means packaged marketing, distribution, and payment services. The idea is to direct WeChat’s traffic to sellers’ mini programs - online stores inside the app. Tencent said the GMV on mini programs had doubled last year, over 70 sellers made more than 100 million yuan in sales, 20 more than one billion yuan.

“Private domain traffic” is Tencent’s major advantage - web traffic from followers, subscribers, and friends. When someone sees an ad and clicks on it, that’s “public domain” because anyone can find and buy the product. “Private domain” only applies to followers or friends who have already expressed some interest.

As sellers realize that spraying ads around is not a good way of spreading the word, private domain traffic is the new digital marketing battlefield. Instead of being obsessed with the business of counting clicks and click-throughs, brands are now obsessed by their number of followers or app sign-ups. It’s a kind of rebranding of the same idea – people buy whatever they see.

But many followers never buy anything. And brands with small and loyal followings find it hard to reach out to more people. Tencent responded with Brand Mall, a by-the-numbers e-commerce app within WeChat. This, to some extent, blurred the line between the public and private domain. 

A potentially more important change is a new QR code that Tencent claims significantly improves the distribution and sales process: “In traditional retail, the brand has no control over how much inventory each distributor sends out, or where the goods are sent.”

The new QR code lets brands know what is sold to whom may help distributors manage their inventories, and lets consumers know where their purchases come from. It’s hard to see how this is going to boost sales. Do users care? Historically, internet shoppers have shown themselves highly prone to caring about what they are told to care about.

A more difficult task is to have online shops boost brick-and-mortar sales, which Tencent has singularly failed to do. Many sellers started as brick-and-mortar stores and had hoped their online business would synergize with their shop, instead of devouring it. To keep sellers and buyers on its platform and attract new ones, Tencent needs to think and work harder, in both public and private domains.