In WeChat, sellers are experimenting with new models of ecommerce

Photo credit: Ashim D’Silva / Unsplash

In China, the country’s tech behemoths have carved up the industry according to their respective strengths: Tencent has claimed gaming and social networking, while Alibaba has made ecommerce its raison d’etre.

But as Tencent’s superapp WeChat eyes growth in payments and offline services, the company is venturing into retail – traditionally Alibaba’s turf.

In particular, WeChat mini programs are providing shops with new ways of selling products, such as group-buying deals that are facilitated through chat groups. Embedded inside WeChat, mini programs are lightweight apps that don’t have to be installed, and can range from ride-hailing and food delivery to livestreaming and shopping. And thanks to the app’s massive social network, brands and shops on WeChat can potentially tap into its 980 million monthly active users.

Since their launch last year, 580,000 mini programs have cropped up on WeChat. They have a total of 170 million daily active users, according to Tencent.

Since their launch last year, 580,000 mini programs have come up on WeChat.

“Following WeChat’s big push for mini programs, you can see that more and more stores, brands, and platforms are setting up shop on WeChat, because they benefit from WeChat’s large user base and social sharing functions,” Mo Jia, an analyst at market research firm Canalys, tells Tech in Asia.

“In that way, mini programs and WeChat Pay, the app’s mobile wallet, could pose a threat to Alibaba’s online business,” Mo continues. However, it remains to be seen how Tencent will manage shops on the WeChat platform, and handle related issues like counterfeit goods. To date, the superapp has shut down 875 mini programs for selling fake goods.

See: These hustlers make a living off WeChat’s thriving underground ecommerce

Social commerce

Though Tencent’s early attempt at ecommerce – an online bazaar called Paipai – was shuttered in 2015, the Shenzhen-based tech giant remained an active investor, choosing to support ecommerce businesses instead of engaging directly. Today, many of those investments have become important hubs of ecommerce within the WeChat ecosystem.

Tencent-backed Pinduoduo, for instance, has embedded its entire ecommerce platform inside WeChat. The startup takes advantage of each user’s social network by offering discounts for group purchases. A box of diapers might cost US$6 if you buy it alone – the price drops to about US$4 if you rope in other friends.

A box of diapers might cost US$6 if you buy it alone – the price drops to about US$4 if you rope in other friends.

“You’ll notice that mini programs that are suitable for WeChat […] will be able to grow their customer base quickly,” Chen Qi, CEO of online fashion company Meili United Group, told media at WeChat’s annual conference on Monday. For example, group buying and livestreaming – where influential bloggers or personalities talk about products they love – can bring in new traffic, he explained.

Tencent is also an investor in Meili United Group, a company created from the 2016 merger of fashion ecommerce startups Meilishuo and Mogujie. According to Meili, the company has attracted 20 million new customers since launching its mini program last summer.

Payments to retail