Shopping on WeChat 5.0

Q: What's your expectation of e-commerce on WeChat?

Cao Junbo, chief analyst of iResearch Consulting Group

We have already seen WeChat strive to develop its service, which is just similar to O2O (online to offline) service. So the app offers official account registration. Many of those accounts come from offline business entities, such as the retail, catering and service sectors. And for offline enterprises, WeChat can also contribute to customer relationship management (CRM) service.

Under these circumstances, by supporting WeChat, many enterprises are inspired to analyze and classify their target customers to help them offer promotional information, custom and interactive services. Currently, most of the firms simply use QR codes to gain customers.

So far, we haven't seen any positive online shopping experiences on WeChat.

If the mobile payment section is successfully launched on the upcoming WeChat 5.0, it means the complete circle will contain an information flow, while the CRM and payment service will be established. Afterwards, the WeChat ecosystem will be expanded and for both firms and individual consumers, making the functions and services of WeChat more plentiful.

Yang Weiqing, president of iResearch Consulting Group

Alibaba is said to view Tencent as the top rival in the e-commerce sector, especially within the mobile Internet market. We think this makes sense.

For example, apps like Kakao Talk in South Korea and Line in Japan which are similar to WeChat in China have now become big players in the mobile gaming market. They are used as a platform to push forward mobile games developed by their companies. Mobile games are like e-commerce products in ways that they are both promoted on a large user base.

Of course there are differences. Mobile games that could become popular are quite limited. But products sold online are massive. How to evolve WeChat into a user-friendly e-commerce platform remains a tough issue.

Through iResearch monitoring, we found that two Tencent apps, WeChat and QQ, have taken up about one sixth of the total time people spend on mobile Internet. That’s far beyond what other Internet companies can reach. And they are still developing. We believe the ratio could hit one- fifth in the future. In that case, there is a possibility that WeChat could undertake an e-commerce platform role.

Q：What constraints does Chinese mobile e-commerce face?

Yang Weiqing, president of iResearch Consulting Group

In general, shopping through e-commerce platforms accounted for less than five percent of China's overall online shopping in 2012. According to our latest statistics, the time users spend on a PC is about twice as much as they spend on mobile Internet, namely mobile phones. Theoretically, shopping through e-commerce platforms should have made up 20 to 30 percent of the overall online shopping, but it hasn't.

Some users are reluctant or afraid to make online payments through mobile phones. Meanwhile, some may complain that mobiles phone screens cannot meet the demands of users, especially when they want to compare prices between different websites. Users expect better price-comparing websites, linking to certain B2C websites or big comprehensive websites, such as Tmall and Taobao. However, this kind of shopping process has not matured on the mobile Internet. That could be the second constraint.

O2O plays a quite important role in mobile e-commerce. However, few companies support O2O right now. Many group-buying companies have started working with physical stores and gained consumption data. Now more than half of Groupon’s orders come from mobile phones as mentioned by Marry Meeker. Things are different in China, as most of the orders come from PCs instead of mobile phones. Thus, we need to create a more favorable environment for the O2O market and let more companies support it.

Cao Junbo, chief analyst of iResearch Consulting Group

In the following phase of development, WeChat has enjoyed a bright prospect while also facing a few problems. As a convenient mobile phone app, if WeChat delivers too much information, like advertisements, users will be bothered. Thus, it is vital for many online businesses to balance consumer services and marketing.

Videophotographer: Liu Zheng

Reporter: Liu Zheng

Translators: He Yini,Lance Crayon and Sun Lei(intern)

Editor: Liu Zheng

Producer: Nie Peng

Executive producer: Han Lei