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The commercialization of Wechat. User experience or profit?

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January 11, 2016, Zhang Xiaolong, the man behind the curtain of the Wechat Empire, who had never given a public speech before, stepped onto the stage of Wechat Open Class and shared his opinion on Wechat’s values. The fact that Zhang stood out at this moment is a symbol of the crucial timing of Wechat’s commercialization.

Wechat has now approximately 650 million users; the process of monetization has never stopped in its five years’ existence. Long have begun the business services, such as Wechat payment, shopping, taxi ordering service, etc.

In his public speech, Mr. Zhang shared some of his concerns about the future of the Chinese IM giant. He said:

“Wechat Public Platform seems like a media platform, but we prefer the Public Platform to be more than that, we want to focus more on the developers and that is our goal for 2016. Where does this need come from? We found out that more and more start-ups initiate with a Wechat Offical Account instead of developing a mobile application because the latter costs way too much. A Wechat Official Account could achieve almost the same things but more cost-effectively.”

“It was not our intention to become a media platform, we have always wanted to build a platform to provide services,” Zhang said, “that is why we even created a Service Account in Wechat, but it has not quite met our requirements. Now we are developing a new form: Application Account. We hope that with this new form of Public Account, when users follow it, it will be as if they had just installed an application. This Application Account will be in silence mode for most of the time but when users need it; they will easily find it in the app. By doing this, we grant a lot of apps a lighter existing form and simplicity.”

wechat-lgogThe leader of Wechat also expressed a more strict regulation for commercial activities in Wechat “There will be more restrictions for marketing events in Wechat Moments, because meaningless content will take up users’ time. The same goes for other functions of Wechat, we hope that there is as little information as possible in Wechat, so that the users can focus on their tasks and finish them effectively.”

After trying to make money with advertisements, Zhang said that he wanted the commercialization of Wechat to be invisible and not a disturbing process based on monetizing of traffic.

One possible reason for the creation of the Application Account is that the current Service and Subscription accounts have impaired the users’ experience. Being buried in numerous and complicated piles of information distracts the users from their goals.

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How to balance user experience and commercialization?

This is not a new challenge, and not just for Wechat, social platforms like Facebook, Twitter and Instagram, who already have a mature advertising model based on information flow, come across the same problem every time they try to launch new product for advertising. Unfortunately, there is no existing remedy for this headache.

At the moment, ads in Moments follow several basic rules: if users opt out or just leave it there, the possibility that this ad appears in your friends’ time-line is only 20%. The percentage will rise to 95% if you click, like or comment on it.

Each ad will be able to circulate for seven days, while every single user will only receive one ad within 48 hours. An ad with no likes or comments will be removed within six hours.

We have discussed a lot about the commercialization of Wechat, but is there a possibility that the commercialization of Wechat is not limited by the current models? Could it be possible that the commercialization of Wechat is outside of Wechat?

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To understand this, we need to know some fundamental values of Wechat.

  • Wechat provides us an essential ID in the era of Mobile Internet – a Wechat account. We use it to keep track of our life and business organizations use it to find us. Before Wechat, the cellphone number was the most important ID, or even earlier we had our e-mail address.
  • Wechat has created Public Accounts, this not only solves the problem of digital identity for offline businesses, but also enables a new communication model: one user to many users information exchange, interactive feedback, rich media and mobilization.
  • It provides the information flow the highest degree of freedom. We can contact our friends quickly and conveniently by sending messages, sharing information in Moments or through a group chat. All of this has created conditions for a more dynamic flow of money and information.
  • This value is still yet unclear however, it would be an important one. Wechat could use Wechat Accounts to locate users and Public Accounts to locate businesses, accumulating trading data between users and businesses so that they could create a “Cloud of consumption”. Based on this cloud, Wechat may provide services like memberships to users or CRM to businesses.

In a word, the commercialization of Wechat is based on output and monetization of these four fundamental values instead of the commercialization of the Wechat as a mobile application itself.

What do you think?

Let us know.

This article was edited by Andres Arroyo from 2Open.

References:

http://www.vvjia.com/article/20151008153623

http://www.99eo.com/info.php?id=8272

http://www.meihua.info/a/65851

http://www.meihua.info/a/65896

http://technode.com/2015/08/24/wechat-ad-moments/

http://money.163.com/16/0116/08/BDEJ2N8J00253G87.html

http://www.tmtpost.com/499621.html

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