The battle of super-app giants in China

ABOUT

Mobile phones have become ubiquitous in China, where smartphone penetration grew in tandem with the proliferation of mobile internet.

Over the last decade, the country’s mobile internet-using population has grown fivefold. As of June 2019, there were more than 847 million mobile internet users in China, accounting for over 99% of its netizens. In this environment, super apps have seen significant growth in terms of users and revenue.

Leading the market is WeChat, a social platform owned by Chinese gaming giant Tencent, with over 1 billion monthly active users (as of March 2020). Close contenders are Ant Financial’s mobile payment app Alipay and Tencent-backed Meituan-Dianping, which operates services ranging from food delivery to in-store dining and hotel booking.

As the market moves toward cashless payments, companies are increasingly putting fintech capabilities at the forefront. In the third quarter of 2019, for instance, China saw US$8.16 tril­lion worth of third-party mobile payment transactions, according to data from iRe­search Con­sult­ing Group

Fintech and business services have become one of the main sources of revenue for Tencent as well, with a contribution of 22% to the firm’s total revenue in 2019. WeChat Pay has also seen a boom in commercial transactions – clocking in 1 billion transactions per day in Q4 2019.

In a market dominated by Alipay and Tenpay (Tencent’s PayPal-like platform), Meituan doesn’t want to miss the boat. In January, it launched Maidan, its virtual credit card that can integrate with the company’s apps, as well as external partner platforms such as ticket-selling app Maoyan Entertainment.

But it’s not just Alipay and Meituan that have placed more emphasis on mini-programs amid the pandemic. WeChat, too, has been focusing on expanding its ecosystem. The chart above shows that the number of apps with MAUs larger than 1 million and 5 million soared in March.

WHY IT MATTERS

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