WeChat helps Tencent make over HK$637m in Single's Day sales
An integrated sales campaign that let smartphone users purchase goods via WeChat helped Tencent's profits on China's biggest online sales day
Tencent, the mainland’s largest listed internet company, racked in millions of yuan this week partly through the nimble use of mobile e-commerce, allowing users of its popular WeChat messaging software to make fast purchases through their smartphones.
On November 11, Tencent’s 51buy website offered the usual extensive sales that have become the norm on Single’s Day, one of China’s biggest online shopping festivals.
Sometimes referred to as “Double 11” day, Single’s Day brought over 500 million yuan (HK$637 million) in profit to Tencent this year, partly thanks to an integrated campaign between the 51buy website and Tencent’s WeChat mobile app.
The campaign allowed smartphone owners to view and order products available on 51buy with relative ease through WeChat’s menus, and was aimed at residents in Beijing, Shanghai, Shenzhen and Guangzhou.
Despite these city restrictions, of the roughly 600,000 51buy orders made on Singles Day, orders via WeChat exceeded 80,000. Members of China’s online community have labeled the process a low-key success, even going so far as to call it Tencent’s “secret weapon”.
Others speculated that the ubiquitous nature of WeChat and the ease of shopping it provided was one edge that Tencent had over its chief rival Alibaba, which organised the majority of its Singles Day promotions through the online websites Tmall.com and Taobao.com, generating over 35 billion yuan (HK$46 billion) in revenue.
Tmall.com and Taobao.com both have mobile versions, but neither enjoy the popularity of WeChat, which boasts nearly 300 million monthly active users.
“Customers can purchase their preferred products faster [on WeChat],” wrote a blogger using the name Huo Shan on Huxiu.com, a Chinese business and technology website. “All you need to do is click on the product you want to buy and you can purchase it directly, eliminating the step of adding an online shopping cart… By registering your bank card with [WeChat], you can complete the entire shopping process rapidly.
“In contrast, the PC user’s [shopping] experience is filled with pop-up adverts, and for many people, their first reaction after seeing such adverts is to turn them off…There are also various channels of third-party payment… WeChat offers a minimalist experience. As long as you have registered your bank card, you can pay quickly, omitting third-party payment links. It’s no exaggeration to say that this is a big advantage [Tencent has] over Alibaba.”
Other netizens argued that despite the ease of using WeChat, Tencent needed to promote the integrated nature of its 51buy shopping campaign more extensively and offer a greater variety of items up for mobile purchase.
According to Chinese financial portal STCN.com, while tablet computers were some of the most commonly purchased products by Singles Day shoppers, WeChat listings only displayed 30 different models available for purchase, while many more were available on the actual 51buy website.
“Shopping habits in the mobile space are different from the PC space,” Song Yang, Tencent’s deputy general manager for e-commerce, explained to STCN.com. “The PC space is more search driven while the phone space is meant to be simple, convenient, and good for quick decision-making… For [WeChat], rather than showing all models, we decided to go with a selection of the year’s best-selling goods instead.
“We believe that [this year’s Singles Day WeChat sales] were mainly testing the water and positioning us to understand the needs of mobile users,” Song acknowledged, pointing out that Tencent’s usage of WeChat in its sales promotions was an ongoing experiment and would likely change and improve over time.
Shopping via WeChat is only one of the features Tencent has rolled out this past year in an effort to improve its 51buy e-commerce offerings and catch up with rival Alibaba.
In 2012, Tencent's e-commerce revenue stood at roughly 4.4 billion yuan (HK$6 billion) while Alibaba's profits maxed out at 1 trillion yuan (HK$1.3 trillion).