Marketing in China: Making a Case for Advertising on WeChat - eMarketer
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Marketing in China: Making a Case for Advertising on WeChat


Thomas Meyer
Co-Founder
Mobile Now Group

Mobile Now Group is a mobile development studio, with a focus on branded apps and games. Thomas Meyer, co-founder of Mobile Now Group and a veteran of the China mobile scene, spoke with eMarketer’s David Green and offers insights on why WeChat is misunderstood and underused by many brands, and how they should go about creating a holistic China mobile strategy that includes WeChat.

eMarketer: What’s the major difference between WeChat and other mobile social tools from the brand or developer’s perspective?

Thomas Meyer: Marketers we’re meeting today that take mobile seriously in China don’t say hello to me when they see me. They ask, “Can you do WeChat?” WeChat is not just a social network the way we understand WhatsApp or Facebook or Facebook Messenger or Twitter to be in the West.

It’s very open, with APIs [application programming interfaces] for the payment gateway, WeChat Pay. It allows users and brands to rent stores. So the large coffee, fast-food or luxury companies—whether they’re retail or brands—they look at WeChat as the central component of their mobile strategy. WeChat is the biggest piece of the cake. It is the mobile commerce and mobile CRM [customer relationship management] enabler in China.

“So the large coffee, fast-food or luxury companies—whether they’re retail or brands—they look at WeChat as the central component of their mobile strategy.”

eMarketer: WeChat still significantly lags Alibaba’s platforms in terms of mobile commerce revenue, so why would brands start with WeChat?

Meyer: WeChat is the starting point [for brand building] because it amplifies faster. It’s the app that’s most used by the market. It’s the app that people open zillions of times per day [and] that’s responsible for a huge share of the data traffic in China. But [WeChat] is not the app that generates the most business yet. Tmall and Taobao [Marketplace] generate the most mobile commerce, and Alipay is the winning mobile payment solution by a large margin.

So you have different approaches to mobile commerce strategy. One would be to follow Tmall, which is naturally, organically, selling more and more via mobile and using Alipay. It involves setting up a store with a Tmall partner. And it is still the large chunk today of e plus m commerce.

But Tmall has a very different philosophy altogether [compared with WeChat]. The data is harder to get for the brands. The model really rewards the Tmall partners, and it also rewards itself as a marketplace. If you’re selling your product via Tmall, your competitor’s products might show up. So it’s kind of a complicated place to control, but it’s where the business is.

Or you go with the WeChat philosophy, which is to totally integrate with all of the APIs that WeChat provides to you as a developer. And certainly your databases of CRM, of catalogs, of content, of service are integrated to the WeChat API. So you can do amazing retail integration. You can do amazing IoT [internet of things] integration with connected devices [or] amazing enterprise account integration.

WeChat is new and WeChat Pay is newer than Alipay as a payment system, but it’s easier. It’s one, two, three, four, and I’m done. There is this “lucky money” facility where you can reward your staff and your sales staff with RMB 200 [$32]—small amounts free of any commission. So it’s really social, it’s really integrated to the way the Chinese want to do it. They keep wowing us, and they have become that layer that’s kind of bringing together iOS and Android, and which enables us to build in one track.

“The great value of WeChat is the integration to the social network, but the drawback is that it’s still not as rich a user experience as what we can do building native apps.”

eMarketer: Why do you think it is taking so long for Western brands to appreciate how to use WeChat?

Meyer: It’s been hard for companies to adapt because they have been doing it the regimented Taobao way. So for them it’s a change of mindset, and some of the largest accounts out there—the brands that have a zillion followers on WeChat—they are still running a basic account with the basic CMS [content management system] feature. It’s really incredible.

They were trusting social media agencies to do content updates, and six months ago the market was still making those large guys believe that you had to be approved by Tencent to access those APIs, and that was totally wrong. It was misinformation. For the past 18 months anybody could access WeChat APIs. So it takes some time for the market to learn. Today, you have WeChat stores that are worth RMB 100 million [$16.1 million].

eMarketer: Under what circumstances is it still useful and relevant to develop your own app rather than create and integrate a platform within WeChat?

Meyer: The great value of WeChat is the integration to the social network, but the drawback is that it’s still not as rich a user experience as what we can do building native apps. So some of the clients that are really advanced, they start to look at plugging native apps so that they can provide a WeChat experience as well as an iOS or an Android native app experience with enhanced capabilities. Then you really have an ecosystem strategy.

At Mobile Now, we do half and half: a lot of native apps, a lot of WeChat services. You have to start with full control—a fuller, better user experience integrated to the service or the product—if it’s a connected app to a device or something like an app that connects to a car.

There is added value there, but actually the same thing can be done on WeChat via HTML5—a fairly rich media experience, and it’s shareable. And we can build social features that are amazing, that allow users to share ticket-booking details with friends so they can buy exactly the same thing with WeChat Pay.

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