I’ve written a lot about Ant Financial – they’re a 30,000 word case study in my new book – mainly because they are the first payments platform to focus upon global reach for financial inclusion. That is not to say that I am ignoring the other platforms: PayPal, Stripe, PayTM and such like. In fact, one other big platform of note is WeChat Pay from Tencent.
So I was delighted to see that Steven Millward wrote a great piece on Tech in Asia about WeChat the other day. The fact is that WeChat and WeChat Pay in China is a monster but, to go global, they will have more challenges as Ant Financial has got the key partners first. In other words, imho, Ant has first mover advantage. Mind you, that has not stopped WeChat from competing effectively before, as evidenced in this timeline article from Steven.
It began quietly on this day seven years ago when Tencent – already China’s social media giant with its MSN-style QQ instant messenger and accompanying Qzone social network (with 780 million active users at the start of 2011) – made a mobile-only messaging app. It was a big break from Tencent’s very PC-era social networks and online gaming empire.
Here’s how it looked at launch, initially only on iOS:
Image credit: The Next Web
The new app was called Weixin in Chinese. There was no English name yet. The Next Web, the only major international news outlet to report the launch, transliterated the Chinese name and dubbed it “micro letters.”
China’s three telecoms companies already had online messaging apps that were proving popular, but Tencent wanted to bring down the telco barriers that existed between people. Screw the telcos: its chat app would disrupted SMS and work on any phone and mobile service.
The launch of Weixin came as Kik and WhatsApp – both released in 2010 – were gaining traction. WeChat’s first iteration had basic features: text messaging, creating voice clips, and, sending photos.
Anyone familiar with the dizzying array of features in Tencent’s other products would have guessed that WeChat would not stay on minimalist mode for long.
Seven months after launching, WeChat added video clips and a “find nearby users” function.
With Chinese people slowly shifting from 2G to 3G, WeChat ensured that videos would be shrunk down to reduce the cost of sending them when not on wifi. A one-minute video could be condensed so that it was just 1 MB in size.
About 14 months after launching, WeChat hit a major milestone when Tencent reported it had 100 million registered users. This was before the company started revealing the number of monthly active users.
After a year of Tech in Asia calling the app Weixin, Tencent picked an English name for it. The move seemed to signal that the Chinese tech titan wanted to go global with its newest social network, something that the company had never done before.
Later that month, WeChat’s v4.0 update added in the Thai, Vietnamese, Indonesian, and Portuguese languages. It already had English.
By the summer of 2012, a new trend was emerging: QR codes. QR codes everywhere. They’re very evident in China to this day.
Tencent opened up WeChat to brand accounts, prompting Chinese companies and foreign brands doing business in China to leap on board, keen to interact with China’s consumers in an arena that’s more direct and intimate than the nation’s other hot social network, the Twitter-esque Weibo.
Media outlets and celebrities also rushed to get their own WeChat public accounts.
To get people to add and follow a brand account, a company could display its personalised QR code anywhere and encourage shoppers to scan it. This is how QR codes became ubiquitous in China.
By now, WeChat has animated emoji as well as downloadable sticker packs. The app also allowed users outside China to connect their Facebook and Twitter accounts in order to find more buddies to add into the messaging app.
Facebook and Twitter are blocked in China.
The move showed that while some features were largely limited to the Chinese market – like the brand accounts – Tencent was still aiming at global expansion with a slimmed-down version of WeChat.
WEChat had gotten so big that stories of terrible things happening through the app start to make national news in China. A woman was reportedly ambushed and murdered when a man who was stalking her using WeChat’s “people nearby” feature attempted to rob her.
That feature is switched off by default.
A few months after that attack, WeChat was implicated in the trial of a sexual predator who used the same location-based function to befriend and “groom” 160 boys, some aged under 13, who were living nearby.
Back when BlackBerry was still clinging on to relevance, Tencent came out with WeChat for BlackBerry. It made sense as part of its expansion into new markets with lots of young phone users where BlackBerry was still hip, like Indonesia and several countries across the Middle East.
A version for the doomed BB10 came later, in July 2013.
This was another threat to Weibo, which capitalized on the appeal of interacting in real time with big-name users. Stars such as Selena Gomez, John Cusack, Maggie Q, Paris Hilton, and the Backstreet Boys signed up to WeChat so as to engage with Chinese fans.
A month prior, WhatsApp revealed it had 200 million. While WeChat seemed poised to be bigger than WhatsApp at the time, the US-based app – later acquired by Facebook – would ultimately steam ahead as WeChat failed to grow substantially outside China.
With its latest update, WeChat added in social gaming integration as Tencent published a handful of its own games. Third-party games were later added to support WeChat’s Games Center.
In another big move, the app offered mobile payments. It was the start of the WeChat Wallet, which can be connected with a variety of Chinese-issued credit and debit cards. In time, these online and cashless in-store payments would expand to challenge ecommerce titan Alibaba.
During a month-long experiment, 300 WeChat-branded vending machines popped up in subway stations in parts of Beijing. After this, a few other vending machine companies incorporated cashless payments via WeChat’s Wallet – as well as Alibaba’s affiliate Alipay app. They’re now a fairly common sight across Chinese cities.
WeChat started 2014 with another big push into mobile commerce. The partnership with Didi Dache (which would later merge with its main rival, Kuaidi Dache, and change its name to Didi Chuxing) allowed people to hail a cab and pay for it all within WeChat, totally without using cash. The move came days after Tencent contributed to a US$100 million funding round for Didi.
Tencent, which had been struggling with its scattered online shopping ventures over the years, took a big and drastic step – it bought a stake in Alibaba nemesis JD. This allowed Tencent to embed JD’s store into WeChat as the main shopping area.
Building on the WeChat Wallet for payments, Tencent now allowed any business – whether major companies or small players – to open a store inside a WeChat brand account. This was exactly what Jack Ma was so worried about.
A new trend was emerging in China that year. Startups didn’t bother to build apps and were instead launching solely as a WeChat brand account.
“Users are increasingly spending more time within WeChat, time that’s taken away from other native apps. We are positioning ourselves in front of this trend,” a startup founder told as at the time. See the story here.
In-store cashless payments have been on the cards since WeChat Wallet first appeared. They appeared for real this time, in conjunction with a handful of big-name chains, including Dairy Queen.
January 2015: Big brands buy ads
WeChat started 2015 with a big move to bring in more money. The ads appeared in the WeChat Moments feed, not in personal messages, allowing people to ‘like’ and comment on the ads just like any other Moments post. BMW and Coca-Cola showed the first ads.
Uber’s official brand account got blocked on WeChat, revealing a dark side to WeChat’s huge influence on social media activity in China. This deletion was a big blow to the US firm’s social media marketing and visibility in the country.
Many people cried foul since Tencent has a stake in Uber archrival Didi.
Tencent maintained that Uber’s account had violated the terms of service by offering deals or “enticing” users to share things with their friends. This is considered spamming in WeChat’s terms of service agreement.
Being a Chinese company, Tencent has to self-censor WeChat a lot. That’s how the media works there. A report by Citizen Lab showed the full extent of the political manipulation in the messaging app when its study revealed that 1.6 percent of posts made by brand accounts – like media outlets, brands, celebrities, and small companies – get removed after being posted.
Aside from all that, the report found evidence of censorship bots that block posts before they’re even published.
WeChat went global with its in-store payments service global as it sought to tap into China’s big-spending tourists. To do this, WeChat signed up stores around the world, so long as they’re ready to scan QR codes with their cash registers in the same way that’s done in pretty much every shop in China. The company’s push focused on areas that are hotspots for the nation’s outbound travelers.
Paying for Starbucks using WeChat in China / Photo credit: Tencent
Chinese tourists spent almost US$230 billion overseas in 2015, so both WeChat and Alipay were both chasing after such a big market.
Keen to avoid the ire of regulators, Tencent clamped down on the spreading of rumors within WeChat. In addition, it issued rules aimed at banning clickbait headlines and “vulgar” content, soliciting shares and follows, flushing out spam, as well as prohibiting anything that “subverts” the state.
WeChat made a bold move into workspaces with the launch of its office chat app. Despite the inevitable Slack comparisons, WeChat Enterprise looks very different from the US-based startup and is focused on mobile.
Yet again, Tencent treaded on Alibaba’s toes as Jack Ma’s firm already has a growing workplace messaging app.
Summer 2016: Can’t take my eyes off you
WeChat accounted for 35 percent of time Chinese people spend glued to their phones, according to data from KPCB’s Mary Meeker.
The big three tech giants – Tencent, Alibaba, Baidu, in descending order – make up 77 percent of people’s time.
Just as Tencent backed ride-hailing app Didi in its early days, the social media giant placed a bet on Mobike’s dockless two-wheeler service. Mobike got a further boost a few months later as Tencent baked the service into WeChat. Bike-sharing apps soon became a new facet of the unending Alibaba-Tencent rivalry when Jack Ma’s firm funded ofo, Mobike’s closest competitor.
China’s smartphone owners are way ahead of everyone else on the planet when it comes to paying for things with their phones.
How pervasive is that in everyday life? Well, 45 percent of WeChat users paid in stores using the messaging app’s wallet feature because they don’t even carry cash. That’s according to a recent study by Penguin Intelligence. Not bothering to carry cash is the third reason cited for using WeChat to pay for their Starbucks or groceries – the speed and ease being the top two factors.
Although WeChat Pay was growing well, Alibaba’s Alipay spin-off seemed to be the market leader, as shown by a variety of metrics.
It turned out that WeChat’s move a year earlier to let users to tip bloggers infuriated Apple. Months of behind-the-scenes negotiations between Apple and Tencent resulted in the Chinese company being forced to direct its tipping through Apple’s own in-app purchase system, allowing the California-based company to take its customary cut of the action.
Not content with trying to kill off the app stores, WeChat was now threatening to topple Baidu, China’s leading search engine, Baidu.
It lets users trawl through WeChat brand accounts, articles, music, and more. With so much content posted to WeChat each day, including news from media outlets via their brand accounts, it’s basically an equivalent to the actual internet. So WeChat’s new search function made all that easier to navigate.
WeChat’s chatty devotees set a new record, sending 38 billion messages per day. That’s 25 percent more than last year.
For a sense of scale, WhatsApp peaked at 55 billion per day at around the same time.
In addition, WeChat revealed in its annual report that it saw 6.1 billion voice messages – those walkie-talkie-style missives – sent each day, alongside 205 million video and voice calls. On the content side, there were 3.5 million active brand accounts.
November 2017: Nearly a billion
In the newest data available at time of publishing, WeChat has 980 million monthly users.
November 2017: Half a trillion
And that’s not the only huge number to grapple with. The ongoing success of WeChat – albeit just in one country – propelled Tencent to its highest ever valuation, reaching US$500 billion, joining the half-trillion elite alongside Apple, Alphabet, Amazon, Facebook, and Microsoft.
After starting the year with its instant apps shocker, WeChat ended it by rolling out exactly the same thing for games. One called Tiao Yi Tiao – a simple jumping challenge – immediately goes viral within WeChat. It looks like this:
GIF by Tech in Asia
Dubbed “mini games,” there’s actually nothing mini about them. They’re full-fledged games – made by Tencent as well as a variety of game studios – that you can play instantly without having to download.
WeChat got a rough start to the new year with reports that the app stores users’ chats as part of a system that snooped on what people were saying.
“WeChat does not store any users’ chat history. That is only stored in users’ mobiles, computers and other terminals,” the firm said in a post. “WeChat will not use any content from user chats for big data analysis. Because of WeChat’s technical model that does not store or analyze user chats, the rumor that ‘we are watching your WeChat every day’ is pure misunderstanding.”
However, the chat app continues to filter out messages related to sensitive political topics, a practice that was first exposed in early 2013.
After last year’s falling out over WeChat’s in-app tips for bloggers, Apple and Tencent started the year with a reconciliation.
Now that Apple has altered its App Store rules to allow people to gift money to each other in apps without the iPhone maker taking a cut, WeChat’s Allen Zhang told media that a deal had been reached for the original tips function to be reinstated.