WeChat officially launched a new ad format on its social networking section Moments called Coupon Ads last Friday.

Tencent’s WeChat team launched ads for Moments steam in January 2015 and video ads this April.

Coupon Ads can be displayed in Moment feed stream with demographic targeting. It supports text, images and video formats. Once users click on “Collect” text link, they will be redirected to a coupon page and get the coupon, which can be used for their own purchase or shared with friends.

Pizza Hub launched two Coupon Ads campaigns for its Durian Pizza with a 15s video and a text/image respectively.Coupon collection rate was increased by 8 to 10 times.

Also read: WeChat Payment reached over 300K retail stores

WeChat launched “friends-shared coupons” service last month with wihich coupons distributed on WeChat can be shared among friends. WeChat users can search for coupons their friends have through “coupons” service when dining, shopping or entertaining.

Shared coupons can be received at offline stores and will show in “Coupons” section on WeChat for both themselves and their friends after sharing. When the shared coupons are used by friends, users will be notified. When necessary, users can also search “Coupons” for shared coupons they need.

When using the service, the shared coupons will be classified based on the location to provide users with rich and convenient choices. Each coupon has detailed graphics and text presentation which enhance consumer experience and help them find their favorates.

Retailers can only distribute shared coupons offline and send to consumers. And, when users use the coupons, retailers can check and process in the background. “Friends-shared coupons” service is opened to the public on certain categories of products on the 18th November 2015 and will expand to more in future. Available categories are as follows:

Each coupon has detailed graphics and text presentation which enhance consumer experience and help them find their favorates. Retailers can only distribute shared coupons offline and send to consumers. And, when users use the coupons, retailers can check and process in the background. “Friends-shared coupons” service is opened to the public on certain categories of products on the 18th November 2015 and will expand to more in future. Available categories are as follows:

Also read: China Social Media Users Insights in 2015

In 2014, the transaction value of Chinese mobile payment reached 6 trillion yuan (US$0.94 trillion), and is expected to exceed 9 trillion yuan (US$1.41 trillion) in 2015. The popularity of O2O and smartphones triggered deeper penetration of electronic payments.

According to a survey by Tencent, 68.8% of respondents used e-payment offline. 20.8% said that although they had not yet, they were willing to try. Only 10.4% of users had not used before and were not willing to try.

70.1% of male users used electronic payment offline, 22.1% said that although had not used, they were willing to try. In contrast, the corresponding proportion of female users was only 67.2% and 19%. Ratios of users who had not used e-payment before and would not have a try reached 13.8% among female, which was about 1.8 times more than the corresponding male users.

Usage of electronic payment in different level of cities had relations with the development level of cities. The more developed cities have more e-payment offline users.

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Convenience and preferential promotions were major two reasons for offline usage of e-payment. First trial and friends recommendations could also encourage the user’s next attempt at electronic payment offline while news media didn’t help much, only 4.9%.

Restaurants, supermarkets and shopping malls were top three places of most common offline e-payment occasions. Restaurants took the lead, up to 31.8%, followed by supermarkets (29.1%) and shopping malls (28.7%). Convenience stores and vending machines were also frequent-used offline occasions of e-payment. In addition, pharmacies, bookstores, parking lots were the places where users used electronic payments, but their ratio did not exceed 10%.

Preferential subsidies were one of the important means to encourage users to give up the wallet. About 50% users would turn to use mobile payment if there were discounts, and 36.7% would if the offline stores could give back cash activities through red envelopes on Alipay or WeChat. Coupons and samplings could also help to attract users, but their appeal was weaker than discounts and red envelopes, both the ratio of no more than 30%. Points reward to shopping mall members were less attractive compared with other promotions. Only 16.5% users were willing to use mobile payment for points reward.

During the usage of offline mobile payment, transaction security problem was biggest concern among users. In addition, 20.7% of users worried about the availability of offline e-payments among off-line merchants. Only 11.9% of users concerned about the levels of promotions.

Male users were more worried about the number of stores that could support e-payment while female users were more concerned about the transaction security.

The higher development levels of urban areas, the lower the users are concerned about the transaction security. In first-tier cities, more users care oncerned the coverage of offline e-payment.

Flexible electronic payment was undoubtedly more convenient than the physical wallet, and multiple authentication technologies, such as fingerprint recognition and gesture unlock, also made it safer than the physical wallet. In theory, electronic payments have to replace the traditional means of payment; however, limited by the coverage, users of traditional habits and other factors, it’ll take time for offline e-payment to be the top choice of consumers’ payment.

Also read: China Mobile Internet Users Reached 740 Million in Q1 2015

Video is ranked as the most popular with 36% of respondents placing it as their most preferred format for mobile advertising, according to a PwC report released this month.

7 Recommendations from PwC for China Mobile Advertising

1. Offer consumers explicit forms of value for sharing their data and therefore, improving the chance of better targeting
2. To maintain users’ trust, targeting should focus on: interests, online purchase history and location
3. Be transparent and open about how their personal data is being used and to adhere to consumers’ privacy preferences
4. Design engaging apps that provide consumer value and build in checks to minimize the risk of fake details being used
5. Brand should look to use video as a primary advertising format but keep the content: creative, relevant to the users’ context and, suitable for watching on a mobile device
6. Coupon can be a powerful tool combied with both location and time-specific targeting and offers
7. Limit targeted ads to 5-7 times per week and target advertising during typical commuting times during the week and at the weekend

You can download the full report here (PDF).