Gaming Dominance Solidifies Tencent’s Leadership

Gaming remains Tencent’s most dominant segment, with revenues from its Value-Added Services (VAS) business—comprising gaming and social networks—rising 9% YoY to RMB 82.7 billion.

Domestically, hit titles like Honor of Kings and Peacekeeper Elite continued to deliver solid growth, supported by Valorant and the newly launched Delta Force. In the international market, Tencent expanded Valorant to consoles, boosting gross receipts by over 30% YoY.

This success underscores Tencent’s ability to maintain engagement in a competitive gaming landscape. The company’s investments in AI-driven personalized experiences and enhanced live-service elements further strengthen its position globally.

Social Media: Expanding Beyond Communication

Tencent’s social media platforms, Weixin (WeChat) and QQ, remain integral to its ecosystem. WeChat’s combined Monthly Active Users (MAUs) grew to 1.382 billion, while QQ saw a modest increase in MAUs.

WeChat Mini Programs achieved a Gross Merchandise Value (GMV) exceeding RMB 2 trillion, driven by expanded use cases like food ordering and electric vehicle charging. These initiatives reflect Tencent’s strategy of embedding commerce and services directly into its social platforms, enhancing user convenience and stickiness.

Leveraging AI, Tencent improved WeChat Search’s ability to handle complex queries, significantly increasing commercial click-through rates. QQ also saw innovation with upgraded infrastructure and new features, marking a return to YoY MAU growth.

Marketing Services and Advertising Resurgence

Tencent’s Marketing Services revenue, which rose 17% YoY to RMB 30 billion, demonstrates strong demand for its advertising solutions. Key contributors included Video Accounts, Mini Programs, and WeChat Search.

The Paris Olympics provided an additional boost, as advertisers sought to capitalize on high-profile events. Notably, eCommerce and gaming advertisers increased spending, offsetting weakness in categories like real estate and food and beverage.

FinTech and Business Services: Mixed Growth Amid Economic Headwinds

Revenue from FinTech and Business Services rose by 2% YoY to RMB 53.1 billion. FinTech services, encompassing payment and wealth management, showed stability, with the latter benefiting from increased user activity and assets under management.

Payment services, however, faced subdued consumption. In Business Services, growth in cloud services revenue was a highlight, aligning with Tencent’s broader focus on supporting digital transformation.

Tencent’s ongoing partnerships, such as the integration of JD Logistics with Taobao and Tmall, reflect its strategy of extending its influence across China’s digital ecosystem.

AI-Driven Innovations: A Key Pillar of Future Growth

Tencent’s AI investments came to the forefront with the launch of Hunyuan Turbo, an upgraded foundation model leveraging a heterogeneous Mixture-of-Experts (MoE) architecture. This model delivers double the training and inference efficiency at half the cost compared to its predecessor, underscoring Tencent’s commitment to deploying cutting-edge AI across its businesses.

The company has integrated AI capabilities into various offerings, from personalized gaming experiences to Weixin’s search algorithms and targeted marketing services. These initiatives aim to enhance operational efficiency and deliver value to users and advertisers.

Financial Strength and Shareholder Returns

Tencent continues to demonstrate financial resilience, with gross profit rising 16% YoY to RMB 88.8 billion and non-IFRS profit for equity holders increasing 33% YoY to RMB 59.8 billion. Free cash flow stood at RMB 58.5 billion, reflecting strong operational performance.

The company’s share repurchase program, totaling HKD 35.9 billion during the quarter, underscores its commitment to delivering shareholder value. With net cash of RMB 95.5 billion, Tencent is well-positioned to pursue strategic investments and initiatives.

Challenges and Strategic Focus

While Tencent’s diverse portfolio shields it from sector-specific risks, challenges such as fluctuating consumer spending in FinTech services and intensified competition in the cloud space remain. However, its strategic investments in AI, content, and ecosystem integration signal a clear focus on long-term growth.

Tencent’s third-quarter performance highlights its ability to adapt and thrive in a rapidly evolving market. By aligning its core businesses with emerging trends in AI, digital transformation, and consumer engagement, Tencent is not just navigating challenges but setting a course for sustainable growth.

Tencent’s Q2 2024 Results

Tencent Holdings announced its unaudited consolidated results for the second quarter of 2024, showcasing robust growth and strategic advancements across its diverse business segments. The company’s performance underscores its commitment to leveraging its platform plus content strategy, with notable successes in both domestic and international markets.

WeChat Video Accounts and Mini Programs:

Video Accounts: Tencent reported a substantial year-on-year increase in total user time spent on Video Accounts, driven by enhanced recommendation algorithms and an expanded array of local content. The company is systematically strengthening transaction capabilities within this platform to deliver seamless shopping experiences, thereby driving sales for merchants.

Mini Programs: The total user time spent on Mini Programs also grew by over 20% year-on-year, benefiting from the platform’s robust commerce and content ecosystem. Notably, the gross merchandise value (GMV) facilitated by Mini Programs experienced double-digit percentage growth, and total gross receipts from Mini Games increased by over 30% year-on-year.

Tencent Channels and Long-form Video

Tencent Channels: This community-based platform, which evolved from QQ, was rebranded and upgraded to enable moderators to manage channels with customizable tools. Users can now interact through text, image, and live streaming features, accessible from Weixin/WeChat, game apps, and QQ.

Tencent Video: The release of popular drama series fueled a 13% year-on-year growth in long-form video subscriptions, reaching 117 million subscribers. Notable titles like “Joy of Life 2” and “The Legend of Shen Li,” based on IPs from China Literature and produced by New Classics Media, were significant contributors to this growth.

Gaming

Domestic Games: Tencent’s flagship domestic games, such as “Honour of Kings” and “Peacekeeper Elite,” resumed year-on-year growth in gross receipts. Additionally, “Naruto Mobile” achieved a new milestone with 10 million monthly average daily active users (DAU) in May 2024, while the newly launched “DnF Mobile” showed promising retention rates.

International Games: International Games revenues reached RMB13.9 billion, marking a 9% year-on-year increase. “Brawl Stars,” with frequent content updates and social features, achieved a historical high in quarterly average DAU and saw gross receipts grow more than tenfold year-on-year.

Advertising and AI Initiatives:

Online Advertising: Revenues from online advertising increased by 19% year-on-year, primarily due to the strong performance of Video Accounts and long-form video advertising. The company upgraded its advertising technology platform to analyze user interests more effectively, resulting in deeper insights and more relevant ad recommendations.

AI Initiatives: Leveraging its top-tier foundation model, Tencent Hunyuan, the company released its AI assistant application, Yuanbao, to the public. Yuanbao is noted for its competitive strengths, including accurate image understanding, advanced natural language processing, and enhanced AI search capabilities.

Financial Highlights

Tencent’s financial performance in Q2 2024 was marked by significant growth across key metrics, reflecting the company’s successful execution of its strategic initiatives.

• Total Revenues: Tencent’s total revenues for the second quarter reached RMB161.1 billion (USD22.6 billion), representing an 8% increase year-on-year.
• Gross Profit: The company reported a gross profit of RMB85.9 billion (USD12.1 billion), a 21% increase compared to the same period last year, with a gross margin of 53%.
• Non-IFRS Operating Profit: On a non-IFRS basis, operating profit grew by 27% year-on-year to RMB58.4 billion (USD8.2 billion), with an operating margin of 36%.
• Net Profit: Profit attributable to equity holders of the company increased by 53% year-on-year to RMB57.3 billion (USD8.0 billion), highlighting strong profitability.
• Free Cash Flow: Tencent generated RMB40.4 billion (USD5.7 billion) in free cash flow during the quarter, up 35% year-on-year, contributing to a total cash position of RMB415.2 billion (USD58.3 billion).
• Shareholder Returns: The company repurchased approximately 103.7 million shares on the Hong Kong Stock Exchange for a consideration of HKD37.5 billion and paid a final dividend of HKD31.7 billion for the year ended December 31, 2023.

Tencent’s Q2 2024 results underscore the company’s resilience and adaptability in a competitive market, with its diverse business segments continuing to deliver strong growth and profitability.

Tencent’s Impressive Q1 2024 Financial Performance Sets Strong Foundation for Future Growth

Tencent Holdings Limited has announced its unaudited consolidated results for the first quarter of 2024, showcasing robust growth across various sectors despite challenging market conditions.

The company, a leading internet and technology conglomerate in China, has reported substantial improvements in gross profit and net profit, reflecting its strategic focus on high-quality revenue streams and innovative technological advancements.

Strategic Initiatives and Business Review

Tencent’s latest quarterly results highlight the company’s dynamic approach to growth and innovation. The tech giant has focused on enhancing its core business segments while venturing into new revenue streams, leveraging its technological prowess and market leadership.

In the gaming sector, Tencent continues to solidify its dominance both domestically and internationally. Several flagship titles, including “Fight of the Golden Spatula” and “CrossFire Mobile,” achieved record-high gross receipts. Meanwhile, international hits like “PUBG Mobile” and Supercell’s “Brawl Stars” reported impressive gains in user engagement and revenue, underscoring Tencent’s global appeal in the gaming industry.

The company has also made significant strides in digital content. WeChat Video Accounts saw a dramatic increase in user engagement, with total user time spent rising by over 80% year-over-year.

Similarly, Mini Programs, a staple feature of WeChat, reported a 20% increase in user engagement, reflecting Tencent’s ability to continuously innovate and expand its ecosystem.

Tencent’s advertising sector has benefited greatly from its advancements in AI technology. The introduction of generative AI-powered tools has revolutionized its advertising platform, resulting in higher engagement and more effective ad campaigns. This innovation has been particularly impactful for Video Accounts and Mini Programs, driving substantial growth in advertising revenue.

In the FinTech arena, Tencent’s wealth management business has shown robust growth, marked by a surge in user numbers and average fund investments. Tencent Cloud Media Services, a leader in the media and entertainment sectors, has maintained its strong market position, further demonstrating the company’s diverse and resilient business model.

Operating Metrics

• Combined MAU of Weixin and WeChat: 1,359 million, a 3% YoY increase.
• Mobile Device MAU of QQ: 553 million, a 7% YoY decrease.
• Fee-based VAS Registered Subscriptions: 260 million, a 12% YoY increase.
• Video Accounts Total User Time Spent: Increased over 80% YoY.
• Mini Programs Total User Time Spent: Increased over 20% YoY.

Financial Highlights

Tencent’s financial performance in Q1 2024 reflects its strategic focus and operational efficiency:

• Total Revenues: RMB 159.5 billion ($22.5 billion), a 6% year-over-year (YoY) increase.
• Gross Profit: RMB 83.9 billion ($11.8 billion), up 23% YoY.
• Non-IFRS Operating Profit: RMB 58.6 billion ($8.3 billion), a 30% YoY increase.
• Net Profit Attributable to Equity Holders: RMB 50.3 billion ($7.1 billion), up 54% YoY.

Segment Performance

• Value-Added Services (VAS): Revenue slightly decreased by 0.9% YoY to RMB 78.6 billion, with social networks and domestic games experiencing minor declines, while international games revenue grew by 3%.
• Online Advertising: Revenue surged by 26% YoY to RMB 26.5 billion, driven by increased engagement and enhanced AI-powered ad targeting.
• FinTech and Business Services: Revenue increased by 7% YoY to RMB 52.3 billion, with solid growth in cloud services and wealth management.

Tencent’s first-quarter results highlight its resilient business model and strategic adaptability. The company’s revenue growth, though moderate, is accompanied by a substantial increase in gross profit and operating margin, indicating improved operational efficiency.

Comparing these results with previous quarters and industry peers, Tencent stands out for its balanced growth across diverse revenue streams. The company’s focus on high-margin businesses, such as cloud services and digital content, is a strategic move that is paying off well.

Financial Highlights: A Glimpse into Growth

Tencent’s fiscal narrative for 2023 is one of notable achievements, underscored by a 10% year-over-year growth in total revenues, reaching an impressive RMB609.0 billion (USD86.0 billion).

This expansion is further emphasized by a 23% increase in gross profit, showcasing the company’s enhanced profitability in a fiercely competitive digital marketplace. Furthermore, the non-IFRS profit attributable to equity holders witnessed a substantial 36% increase from the previous year, indicating strong core earnings performance .

The final quarter of 2023 continued this trend, with revenues escalating by 7% year-over-year to RMB155.2 billion (USD21.9 billion), and gross profit and non-IFRS profit attributable to equity holders of the company experiencing significant increases of 25% and 44% respectively.

In 2023, Tencent’s revenue breakdown highlighted the diversity of its business portfolio, with significant contributions from various segments.

The FinTech and Business Services sector emerged as the largest revenue source, representing 31% of the total revenue and amounting to RMB189.0 billion. This segment’s leading position underscores Tencent’s stronghold in the FinTech industry and its successful foray into comprehensive business services.

Following the FinTech and Business Services sector, the Online Games segment was the second-largest contributor to Tencent’s revenue, accounting for 29% and totaling RMB177.0 billion. This demonstrates the continued vitality of online gaming within Tencent’s business model.

The fastest-growing segment in 2023 was Tencent’s Cloud Computing business, which experienced a remarkable 30% year-over-year revenue increase, reaching RMB109.0 billion. This growth outpaced the other segments, notably the Social Networks segment, and underscored Tencent’s effective strategy and execution in the competitive cloud services market.

Overall, Tencent’s 2023 financial performance showcased the strength of its FinTech and Business Services as the leading revenue generator, with the Cloud Computing segment leading in growth, reflecting the company’s adaptability and strategic positioning in China’s evolving digital landscape.

Strategic Endeavors and Innovation

2023 saw Tencent advance through strategic milestones:

Enhancing User Experience: Tencent’s WeChat Video Accounts doubled in user time spent, thanks to improved algorithms and creator support. Additionally, the Mini Games platform’s gross receipts soared by over 50%, reinforcing Tencent’s leadership in China’s casual gaming sphere .

Pioneering in AI: The launch of Tencent Hunyuan, an AI model of a trillion-parameter scale, marks a leap in Tencent’s technological prowess, solidifying its commitment to spearheading digital innovation .

Commitment to Society and Environment: Tencent’s digital philanthropy platform set a new record with RMB3.8 billion raised during the 99 Giving Day campaign, while its New Cornerstone Investigator Program supported 104 scientists, promoting scientific research .

As of the end of 2023, Tencent Music Entertainment Group (TME) reported a notable increase in its music subscribers. The total number of online music paying subscribers reached 90 million, marking an 18% year-over-year growth.

Market Engagement and User Dynamics

Tencent’s operational statistics reveal evolving trends in user engagement:

• The MAUs of Weixin and WeChat stood at 1,343 million by December 2023, a 2% increase year-over-year, highlighting the platforms’ expanding influence in social media .
• Despite a marginal decline in VAS revenues, Tencent’s strategic emphasis on content diversity and innovative services positions it for sustained growth amidst market challenges .

Tencent’s 2023 saga is one of strategic brilliance and financial vigor, positioning it at the forefront of China’s digital transformation. With its commitment to innovation, user-centricity, and societal impact, Tencent is poised to continue shaping the contours of China’s digital future.

Mobile reach in China: Tencent, Alibaba, Baidu, ByteDance, vs. Kuaishou

CIW Dossier China Digital Insights (DCDI) is compiled to provide statistical information about China digital insights on the internet economy, digital trends, online users, mobile apps, and e-commerce. Click here to download.

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A recent unveiling at the “2024 WeChat Open Class PRO” has shone a light on its video account e-commerce business, demonstrating a nearly threefold increase in Gross Merchandise Value (GMV) in 2023. This growth is complemented by a more than 244% rise in order volume and an approximately 300% increase in product offerings.

Industry insiders estimate that live commerce via WeChat’s video accounts generated a GMV between 40 to 50 billion yuan in 2022. Following the reported threefold growth, the 2023 figures are projected to hit between 120 and 150 billion yuan.

Li Chengdong, an e-commerce analyst and founder of Dolphin Think Tank, acknowledges the impressive growth rates of video account e-commerce in 2023. However, he notes the sector’s scale remains modest compared to giants like Alibaba, JD.com, and Pinduoduo, whose GMVs have breached the trillion yuan mark, alongside emerging live commerce platforms like Douyin and Kuaishou.

A significant development is Tencent’s integration of video account e-commerce with its WeChat advertising system, allowing for video account livestreams to be promoted within Moments. This new feature opens up fresh avenues for traffic acquisition, potentially boosting conversion rates by shortening the consumer journey from ad click to purchase.

The integration extends beyond advertising, as various e-commerce formats within the WeChat ecosystem, such as social commerce and mini-program commerce, are linking up with video account e-commerce. This strategic move positions video accounts as a foundational infrastructure within WeChat e-commerce, facilitating a seamless flow of both public and private domain traffic within the social network.

WeChat’s new social e-commerce platform integrates Shopping Accounts

Launched in 2020 as a counter to Douyin and Kuaishou, WeChat’s video accounts rapidly developed a comprehensive suite of short video functionalities. By integrating with other WeChat services like Official Accounts, Search, and Mini Programs, video accounts have become a crucial part of the ecosystem.

The platform’s commercial exploration, especially in live commerce, started in earnest around the first half of 2021. According to Yu Haijun, founder and general manager of Guangzhou Zhi Ling Network Science and Technology Co., Ltd., early adopters included notable brands drawn by the platform’s promise of a refined operational framework focusing on user experience.

Tencent’s Q3 2023 earnings report highlighted a more than 50% year-on-year increase in total video account views, with WeChat’s video account content ecosystem and creator base continuing to expand. Partnering platforms like Weimob reported a 47.6% increase in video account merchants and a 50.5% increase in their GMV in the first half of 2023, further underscoring the growing importance of video accounts in the e-commerce landscape.

Despite these advances, some insiders express dissatisfaction with the growth rate, pointing to a relatively low ad load rate in video content compared to other platforms. This limitation suggests a need for increased user engagement and refined recommendation algorithms to boost traffic and conversion rates.

The integration of WeChat Moments ads with video account commerce represents a deepening of video accounts’ role within Tencent’s ecosystem, offering merchants enhanced promotional opportunities and streamlined customer purchase pathways. However, achieving a significant uplift in conversion rates through this integration will require meticulous data alignment and robust cross-departmental collaboration.

As Tencent doubles down on its investment in video account and live commerce, the future of WeChat e-commerce hinges on the harmonious fusion of advertising and transactional capabilities, underscoring the platform’s commitment to enriching its commercial ecosystem.

WeChat expanding e-commerce reach with mini program integration on JD, Xiaohongshu

In 2022, the total views of the original content on WeChat Channel (video account) increased by 350% year on year, and the scale of live broadcast increased by 300%, according to WeChat’s data released on 10 January 2023.

The commercial potential of live video broadcasting continues to be released, and the corresponding e-commerce sales increased by more than eight times year on year.

In 2022, the number of daily active creators and the average number of videos uploaded by the video account increased by more than 100% year on year, the number of creators with at least 10,000 fans increased by 308%.

The number of video account earners increased by 101%, and the total income of live video anchors increased by 447%.

Live video GMV increased by more than 8 times year on year in 2022, and the average selling price exceeded 200 yuan. Among them, the top three categories of consumption are covered by clothing, food, and beauty.

The monthly active users of WeChat Search have increased to 800 million, and the total search volume increased by 54%. Mini Programs are widely used in scenic spots, hotels, airports, and other fields, and the number of WeChat Mini Programs has increased by 183%.

WeChat Search contributed to 27% of Official Account follower growth and 20% of Mini Program’s new daily active users. Its contribution to WeChat Channel follower growth has increased by 120%.

WeChat MAU

Over 330 million of WeChat’s (known as Weixin in China) 1.2883 billion monthly active users use video calling. 780 million users are on the social networking section WeChat Moments and 120 million publish updates. The content network WeChat Official Account has 360 million users.

WeChat has evolved from an instant messaging app to a service meeting the digital needs of over 1.27 billion MAU in Q4 2021. Each day, more than 120 million active users post in social networking Moments, 360 million users read Official Accounts articles, and 500 million users access Mini Programs (Q1 2022) daily.

For Q4 2021, WeChat daily active advertisers expanded by over 30% year-on-year. Over one-third of Moments’ advertising revenue was generated from advertisements using Mini Programs as landing pages and advertisements connecting users to customer service representatives via WeCom.

WeChat Video Accounts’ time spent per user and total video views more than doubled year-on-year as Tencent enriched content diversity and enhanced the product experience.

WeChat Mini Programs

The daily active users on WeChat Mini Programs reached 450 million according to WeChat official data in January 2022. The transaction volume of catering, tourism, and retail increased by 100% year-on-year. Mini Program DAU reached 500 million (Q1 2022).

The number of Mini Program developers has exceeded 3 million.

In 2020, the daily active users of WeChat Mini Programs exceeded 400 million, according to its official data shared at its annual event WeChat Public Lecture.

The number of mini programs used per user increased by 25%, the average transaction value per user grew by 67%, the number of programs with transactions increased by 68%, and the annual transaction volume of more than doubled in 2020.

In 2020, more than 100 million people purchased in shopping malls and department stores on WeChat Mini Programs. With the help of mini program pre-sale + offline self pick-up mode, more than 300 million users purchased fresh fruits and vegetables.

WeChat Mini Programs overview

WeChat Games

In 2020, the commercial realization of WeChat mini games increased by 20%.

Last year, the proportion of male and female users in the distribution of mini games accounted for 50% respectively. 40% of the users in the first and second-tier cities, and 65% of the users aged 30 and above.

Compared with 2019, the per capita game duration of mini games increased by 50%, and the average number of games played increased by 20% in 2020.

China game live streaming revenues to double by 2021

WeChat Search

The number of monthly active users of WeChat search has reached 700 million according to WeChat official data released in January 2022.

WeChat search staff said that in the mobile Internet era, search should not be limited by the search box, but need to be accessible by the touch. Users can search while chatting.

WeChat search will screen out the high-quality content of WeChat and produce a more accurate connection with users.

In the future, it can expand the search scope to the whole internet-based the needs of users. The search results are currently mostly provided by WeChat Official Account and Sogou.

Top search trends in China

WeChat Pay

In January 2022, WeChat shared the latest progress on WeChat Pay:

• 23 thousand monthly service providers
• Over 10 million merchants
• More than 1800 banks and Payment institutions
• 23 thousand monthly merchants
• In the next three years, WeChat Pay will continue to carry out digital upgrading of WeStore, with a planned investment of more than 10 billion yuan

In 2020, Zhifufen, a credit score on WeChat Pay, saw more than 240 million users. It boosted the conversion rate of e-commerce orders by 14% and the repurchase rate of retail merchants by 73%.

In 2021, WeChat mini stores and Zhuanzhuan (a secondhand-goods marketplace) will integrate Zhifufen.

In the e-commerce industry, WeChat Pay’s Zhifufen enables post-payment after receiving the delivery and faster refund. Users can quickly receive a refund after submitting return logistics information.

As of January 2022, more than 50% of users have activated Zhifufen, whose solutions cover more than 3000 industries. WeChat Pay unit cooperates with the e-commerce industry on “buy first and pay later”, which has been used by more than 100 million users.

Zhifufen also announced the launch of audio and video members’ services such as “watch first and pay later”, which helped solve the problems that bothered audio/music and video users to deduct fees in advance and forget to terminate their contracts.

China’s online payment users penetration reaching 86%

Enterprise version of WeChat: WeCom

In 2020, there were 80,000 enterprise WeChat partners, with a year-on-year growth of 400%. 

Acquire, convert, and retain customers through WeChat Ads + WeChat Work (WeCom)

According to WeChat, search ads will support six promotion goals, including WeChat Official Account promotion, sales lead collection, products promotion, branding events promotion, app promotion, and WeChat Mini Games promotion.

It supports three landing page types, namely, native promotion page, WeChat Mini Program, and custom link. And, based on the search ability of WeChat, WeChat search advertising can support the sale of brand keywords, keywords words, generic keywords, and generic keywords.

At present, Tencent’s mobile search advertising scenarios mainly include WeChat Search and QQ Browser search. In these scenarios, advertisers can do brand and performance marketing.

Since the launch of search feature on WeChat in 2017, it has been at the top of the main interface.

However, after five years of iteration, it has now become a “global search” that includes WeChat Moments, Official Account, and Mini Programs from the early days when it could only search local chat records and contacts.

At the same time, the search scope has also expanded to all content and services related to search queries in WeChat.

WeChat Mini Programs Insights

UnionPay Flash supports the top-up payment of QCoin, QQ Music, and Tencent Videos. WeChat Mini Programs will gradually support Flash Pay, being in beta test since 22 September.

On October 2nd, Alipay announced the progress in promoting interconnection with China UnionPay. it has opened online payment scenes to the UnionPay Flash app, covering the first batch of 85% Taobao merchants.

For offline, it has also implemented QR code scanning and mutual recognition with UnionPay Flash payment in multiple cities and plans to cover all cities in China by March 2022.

UnionPay, also known as China UnionPay or by its abbreviation, CUP or UPI internationally, is a Chinese financial services corporation headquartered in Shanghai, China. It provides bank card services and a major card scheme in mainland China.

Founded on 26 March 2002, China UnionPay is an association for China’s banking card industry, operating under the approval of the People’s Bank of China (PBOC, central bank of China).

It is also an electronic funds transfer at point of sale (EFTPOS) network, and the only interbank network in China that links all the automatic teller machine (ATMs) of all banks throughout the country.

In 2015, UnionPay overtook Visa and Mastercard in a total amount of value of payment transactions made by customers and became the largest card payment processing organization (debit and credit cards combined) in the world after the two.

China’s 3rd-party payment market 2021-2025e: mobile vs. internet

The launch of Mini-Game “Jump” (Tiaoyitiao)  made WeChat Mini-Programs (or WeChat Apps) an instant hit in early 2018. On average, 230 million users used WeChat Mini-Programs daily, 60 million more than 2017. It is estimated to exceed 350 million by the end of 2019.

Read the latest insights on WeChat apps and mini programs here.

WeChat’s Mini-Programs has covered over more than 200 industries and provided over 100 billion times of requests. The sector of public services has been available among 362 prefecture-level cities and created over 500 billion commercial value. The total transactions were 600% more than a year ago.

At the end of 2018, over 2.3 million WeChat Mini-Programs has gone online since its launch in January 2017, which increased by nearly 300% from early 580 thousand.

In terms of the total number of applications, WeChat took less than two years to surpass Apple’s App Store, which held 2.1 million apps with ten years. Aldwx.com’s Mini-Programs data statistics platform forecasts the total mini-apps on WeChat will surpass 5 million by the end of 2019.

It is becoming more and more difficult for a mini-programs to get enlisted in the top 100 ranking on WeChat.

Tongcheng-eLong and Pinduoduo took the first two spots in December 2018. 34% of the top 100 mini-programs turned out to be newcomers. On average, 30% of the top 100 would be replaced by new ones every month in 2018.

All WeChat mini-programs attracted more than 8 billion yuan (US$1.19 billion) from 110 funding rounds led by 120 investment agencies. The figure was eight times higher than it was in 2017.

Offline retail and online shopping mini-programs were the two most popular areas, which together accounted for nearly 70% of total funding.

9 Brands see great results from WeChat Mini Program live streaming campaigns

The advertising market of WeChat Mini-Programs is projected to grow from 5 billion yuan in 2018 to 20 billion yuan by 2019. The retail transactions made with WeChat ecosystem is to exceed 3 trillion yuan by 2019.

Following the launch of Nearby Mini-Programs feature, some leading retailers have successfully connected online marketing scenarios with offline. For example, IKEA WeChat Mini-Program saw 2.26 million visits in 24 hours on the day it went online.

On average, each user accesses WeChat Mini-Programs 4.25 times a day and spends 8.7 minutes on it. WeChat Mini-Programs has seen 600 million users as of the end of 2018. 72% of WeChat users have used WeChat Mini-Programs; 34% of whom used it frequently.

Business guide to WeChat Mini Program live streaming

WeChat Apps Usage Scenarios

53% of users use WeChat Mini-Programs mainly for temporary usage, 40% didn’t want to download mobile apps, 33% are automatically redirected to it after scanning QR code or clicking, and 31% just want to give a try.

User profile & usage preference

Among WeChat Mini-Programs users, 58% were men, 70% under 40 years old, 76% college educated or above, and 52% lived in tier-3 or lower tier cities.

42% of users played Mini-Games on WeChat, 39% used lifestyle services mini-programs, and 28% viewed news.

Specifically, those aged 17 years or younger mainly used WeChat Mini-Games. Users between 18 and 49 years old like to use Mini-Games and lifestyle service mini-programs. And, older users over 50 years old prefer news mini-programs, such as People’s Daily, and lifestyle service mini-programs.

Out of the 69 entry paths to access WeChat Mini-Programs, chatting, sharing, search, QR code, and shortcuts are most frequently used.

44% of users chose shortcuts from My Mini-Program in the main chat interface, 40% accessed from friends’ sharing (especially preferred by older users), and 35% entered through Official Account redirection.

Usage scenarios

53% of users use WeChat Mini-Programs mainly for temporary usage, 40% didn’t want to download mobile apps, 33% are automatically redirected to it after scanning QR code or clicking, and 31% just want to give a try.

Mini Program platforms in China: WeChat vs. Alibaba vs. Baidu

In the eyes of users, what makes WeChat Mini-Programs attractive is its ease to use (60%), no need to download apps (57%), no RAM usage (31%), and convenience to share with friends (28%).

71% of users have shared Mini-Programs to others because they deem it valuable (57%), they were asked by friends (22%), or attracted by rewards (15%).

56% shared practical tools for office collaboration, 48% shared interesting contents to create topics and enhance interactions, and 32% shared Mini-Games to show gaming advancement, earn red envelops, or invite someone to compete against themselves, etc.

30% of WeChat users have used Mini-Programs to shop. 43% of them are willing to download apps, 40% found the product offer was cheaper, and 34% were redirected from posts on WeChat Moments.

However, some program designs affect users’ experience while shopping, such as profit-provoking shares and useless vouchers.

Users’ impressions on WeChat Mini-Programs

For those not using WeChat Mini-Programs, 30% found it not easy to find the one they want as many users mainly get access from friends’ sharing. 25% found the interface choppy especially when they played Mini-Games. And, 23% are worried about a specific function because it seems only useful for temporary usage.

Overall, users hold positive impressions toward WeChat Mini-Programs. 44% of users thought Mini-Programs could replace apps for occasional usage, 36% believed it could help save the smartphone storage, and 32% only viewed it as a tool.

40% of users expect WeChat Mini-Programs to improve the interface switching fluency between chat and mini-programs. 37% expect more useful mini-programs. And, 37% wish it more active in interactions.

One-third of users are willing to download the app after they have a try with a mini-programs. However, most of the users are primarily provoked by profits to download the app.

WeChat’s new social e-commerce platform integrates Shopping Accounts

“Shopping Accounts” is under Tencent Huiju, which is a mini program for select brand products, launched by Tencent Smart Retail in December 2020. Huiju aggregates different household name brands’ WeChat mini programs including Walmart and Starbucks, similar to Alibaba Taobao’s upgrade Tmall, a platform for well-known brands.

Tencent Huiju currently covers about 11 categories of products, namely supermarket fresh food, leisure snacks, household department stores, catering and food, beauty shop, men’s clothing shop, sports hall, shoe and bag shop, women’s clothing shop, baby and children’s shop, and medicine shop.

As of May 15, a total of 354 brands have set up their Huiju stores.

Huiju is defined as “the social e-commerce practice solution of Tencent Advertising”. Huiju subsidizes the platform users with the traffic acquisition cost for social community distribution to achieve a lower acquisition cost and help the “private domain growth” of businesses.

In the future, Huiju will introduce new interactive play methods, such as group buying discounts, brand live streaming, and new user red envelope.

Tencent Huiju’s new function “shopping accounts” is more eye-catching.

The steps for users to register “shopping account” are very simple. Any WeChat user can open the Tencent Huiju mini program to easily get a “shopping account” linked to her own WeChat personal account to sell products from Huiju to potentially earn commissions.

The “shopping account” is equivalent to a virtual store where individuals share their “favorite” products from Huiju platform. Users can select product from Huiju platform and put them on the “my product list”.

The initial shopping account has only four product listing locations and one can’t change the listed product in three days.

The higher the “influence” of the shopping account, the more recommended places they can get. The account owner can share these products with WeChat friends, who could buy the products at a price lower than the platform, also known as “exclusive price”.

For merchants, they can potentially enjoy the huge traffic with much lower cost from WeChat’s 1.2+ billion users, which remains to be proven. Currently, shopping account owners can’t get cash rewards from successful referring products to their WeChat connections. And, the lacks of shopping habits on WeChat and customer support are both hindrances.

There’s a community feature where shopping account owners can see recommended products from friends as well as the accounts’ referred sales and visits:

This product seems to be still in its early stage with many frictions to clear to realize the social e-commerce potential. Check out another product Tencent officially launched as a Pinduoduo competitor here.

This week, Tencent launched an independent mobile app for Xiao’E Pinpin, which currently has a similar design as the mini program.

The home page adopts a similar design as Pinduoduo, with a popular products row set on top, including beauty products, food supermarket, etc.

The middle part is the welfare for new users, which speeds up the acquisition of new users through low price concessions. The bottom showcases recommended products.

The core of Xiao’E Pinpin is social e-commerce, so a function called “friends like” is designed in the app.

This function is similar to Pinduoduo’s “Pinxiaoquan”, which can publish the product news on this page, and other friends can comment, like, and share in WeChat Group, so as to promote the success rate of transaction while maintaining shopping interaction.

Social e-commerce Pinduoduo’s road to brand upgrade

Nowadays, the social e-commerce segment in China is still becoming more and more competitive.

Taobao integrates the daily special sale and Juhuasuan, competing with Pinduoduo through 10 billion yuan subsidies. Jingxi, the Jingdong shopping platform targeting lower-tier cities, has also been officially connected to the first level entrance on WeChat.

Xiao’E Pinpin app has built-in game shopping functions. Through Xiao’E Treasure Hunt and Xiao’E Manor, users can play games while winning products, integrating shopping and entertainment. In addition to Xiao’E Pinpin, Tencent’s latest attempts also include WeChat Shopping Accounts for its Huiju social e-commerce platform.

China social e-commerce market insights 2021

83.0% of its average MAUs was attributed to Tencent-based platforms with the majority of the traffic coming from WeChat Pay portal and the dropdown list of users’ favorite or most frequently used mini-programs.

The average MPUs increased by 84.5% year-to-year from 14.8 million in the same period of 2020 to 27.3 million, mainly attributable to its stable traffic on WeChat channels. Read our WeChat Mini Programs Insights 2021.

Paying users for the 12-month period ended March 31, 2021, increased by 12.9% year-on-year from 149.9 million in the same twelve-month period of 2020 to 169.3 million. And, Tongcheng Elong’s paying ratio recovered to 11.7% for Q1 2021.

Revenues increased by 60.6% year-to-year to RMB1,613.8 million from RMB1,005.1 million in the same period of 2020.

Compared with Q1 2019, it has achieved 45.0% growth in its domestic room nights sold, with more than 70.0% growth in lower-tier cities, around 20.0% increase in domestic air ticketing volume, and nearly 150.0% increase in bus ticketing volume.

Its total GMV increased by 83.0% year-on-year to RMB33.3 billion.

The adjusted EBITDA increased by 162.7% year-to-year to RMB417.4 million from RMB158.9 million in the same period of 2020. Adjusted EBITDA margin increased from 15.8% in the same period of 2020 to 25.9%.

The adjusted profit for the period increased by 279.5% year-to-year to RMB296.3 million from RMB78.1 million in the same period of 2020. The adjusted net margin increased from 7.8% in the same period of 2020 to 18.4%.

Tongcheng-Elong cooperated with short video platforms to promote its hotel and tourist attraction products. Besides, it has commenced cooperation with a leading e-commerce platform in China by providing its travel-related products and services on the platform, to explore new traffic sources and further penetrate into lower-tier cities market.

It also cooperated with hotels to set up QR code scanning function to convert traffic from offline to its WeChat mini-program.

Mini Program platforms 2021: WeChat vs. Alibaba vs. Baidu

From January to November, China’s online retail sales reached 10,537.4 billion yuan, a year-on-year increase of 11.5%, 0.6 percentage point higher than that of January to October.

Among them, the online retail sales of physical goods reached 8,779.2 billion yuan, an increase of 15.7%, accounting for 25% of the total retail sales of social consumer goods; among the online retail sales of physical goods, the sales of food, clothing and consumer goods increased by 32.9%, 5.9% and 17.1% respectively.

Top 100 Chinese brands in 2020

The Top 100 Chinese brands increased their worth by $106.8 billion to reach $996.4 billion, demonstrating the resilience of strong brands and their ability to build and sustain value in the most difficult of years.

Alibaba remains China’s most valuable brand for the second year, growing +9% to $153.3 billion, followed by Tencent with +9% growth to $151.0 billion.

China Cloud Market

Alibaba Cloud continued to lead the Chinese market with 41% market share in Q3, where cloud computing is a key part of the government’s development plans. It is also the overall leader in the Asia Pacific region. Alibaba Cloud accounted for 6% of the worldwide market.

China Smartphone Shipments

China’s 5G smartphone shipment is about to reach 140 million units in 2020, and all new models released by major manufacturers in the Chinese market will be 5G mobile phones. In Q3 2020, worldwide smartphone shipments reached 348.0 million units, at a 1% decline year on year (but up 22% in Q2).

Samsung regained the lead, up 2% to 80.2 million units. Huawei slipped into second place with a 23% fall to 51.7 million units. Xiaomi took third place for the first time, reaching 47.1 million units with 45% growth.

Top Mobile Apps & Platforms in China 2020

The top mobile apps by MAU growth are QQ Browser, Taobao, Pinduoduo, DingTalk, and TikTok Lite in September 2020. The top lifestyle mobile platforms are led by Meituan, Meituan Delivery, and Alibaba’s Ele.me including mobile apps and mini programs.

Mini Program platforms: WeChat vs. Alibaba vs. Baidu

Mini Programs (MP) are light applications designed to run on top of a specific mobile app. Top technology companies in China have designed and run their own mini-program framework; and, the most popular ones include WeChat platform, Alibaba (Alipay platform; Taobao platform), Baidu Smart Program, and QuickApp.

Mobile reach in 2020: Tencent, Alibaba, Baidu, ByteDance

Tencent has the highest reach of 96.3% of China mobile internet users in Sept 2020. Alibaba and Baidu reach 95.3% and 91.0% mobile internet users respectively while ByteDance follows closely with over 67% reach.

The most innovative Chinese companies in 2020

Huawei has ranked the top Chinese company in Boston Consulting Group’s Most Innovative Companies 2020 list, or the sixth globally, followed by Alibaba, Tencent, Xiaomi, and JD.

Of the 162 companies that have been on BCG’s top 50 “most innovative companies” list over the past 14 years, nearly 30% appeared just once—and 57% appeared three times or fewer. Only 8 companies have made the list every year: Alphabet, Amazon, Apple, HP, IBM, Microsoft, Samsung, and Toyota.

Short video market trends in China for 2020

Online video has a penetration of 94.5% in China internet users as of the first half of 2020, reaching over 888 million users. Short video market saw fast growth in the first half of 2020 with almost 818 million users and a penetration rate of 87%.

China online advertising market overview in 2020

China’s online advertising market saw the largest growth from short video ads (107.7%) and social ads (62.5%) in Q3 2020 while e-commerce ads had an increase of 14.9%.

The short video platforms with the largest advertising revenue growth are Kwai (Kuaishou), Xigua (owned by ByteDance), and Haokan (owned by Baidu).

WeStore is fully open to enterprises, businesses, and individuals. The individual only needs the Chinese identity card information to be able to open the shop directly.

After binding the bank card, the withdrawal can be completed. It supports the sale of first-hand and second-hand goods. One WeChat account can launch one WeStore store for individuals only.

Businesses can only open stores by uploading business licenses, operator information, settlement bank account information, and filling in the nickname/category of the WeStore mini programs. One WeChat account can support the opening of three WeStore business stores.

Personal stores manage the backend through the mobile terminal – WeStore Assistants; enterprises and individual businesses will manage it through a desktop computer.

Value-added service providers can directly join the developers’ program, and more service types will be gradually open. At present, the WeStore service market has opened up commodity management services such as one-click moving, product bulk management, and cross-platform management, as well as order logistics management services such as batch order processing, batch printing, and logistics.

The ability of fast building a mini store mainly meets the needs of small businesses without development ability. Businesses with personalized development needs or existing e-commerce mini programs can directly access the open components of WeStores.

At the same time, WeChat’s official team will continue to iterate and open the interface and function of components to help businesses realize personalized development while reducing development costs.

Businesses can click the button below to apply for the internal test, access to the small store open components, and enjoy the relevant services and capabilities provided by the small store.

WeChat’s WeStore looks like a simple and quick way to set up a mobile store. The Enterprise version also supports up to 500 users to co-manage the store. Merchants can set different access levels for different employees.

WeChat expanding e-commerce reach with mini program integration on JD, Xiaohongshu

It also support WeStores to buy delivery insurance for users.

If the user needs to return and exchange the goods after purchasing in the WeChat shop, the deliver insurance will compensate for the logistics expenses caused by the return and exchange, and help the businesses improve the transaction conversion rate and the user’s shopping experience.

Transaction guarantee certification is another important feature on WeStore. It aims to help users find more stores with good service and bring more exposure opportunities for high-quality stores. If the service of the WeStore shop is up to standard, it can be certified automatically.

Burberry launched its first luxury social retail store, empowered by WeChat

WeStore started testing in 2020

Some WeChat Official Accounts received the invitation to try WeStore (Weixin Xiaodian) in June 2020. The invitation shows that this is a mini program for selling products that can be launched with one click and operated independently.

After opening, businesses can quickly start live streaming and sell products on WeStore. Speculations from China internet show this might be building a foundation for WeChat Channel Account (short videos).

WeChat hasn’t made Channels (Video Accounts) publicly available. This obviously carries Tencent’s hope for a share in China’s short video market as it restricts the videos to be within one minute. Check out this demo video if you are not familiar with WeChat Channels:

There’s no data yet about the user base or engagement on Channels; if taking off, it will be very powerful when combined with WeStore creating an additional e-commerce sales channel with short videos:

9 Brands’ great results from WeChat Mini Program live streaming campaigns

WeStore is a SaaS mobile store building tool created by the Mini Program team to help businesses quickly launch a mobile store. Currently, the online functions include:

• Basic store opening and operation capabilities, including product management, store operation, live broadcast management, fund management, etc.
• Good shopping experience capabilities on the user end, including product details page, shelf tools, live streaming plug-ins, etc

Currently, some third-party “shopping malls” are widely adopted and help the WeChat Official Account to build shops. They can also directly provide the supply chain, product details page, and so on, which greatly reduces the difficulties of running content e-commerce.

In comparison, this WeStore currently provides limited features. But, launching and managing a store with this mini-program is completely free and WeChat is constantly improving it.

WeChat Mini Programs overview

Entering the Mini Program, the user becomes a “Mom” by virtually adopting a Burberry elf for free. And, Tencent and Burberry expect this to be an attractive feature to the female audience in China. Customers can also unlock exclusive content and personalized experiences and share them with their friends.

As customers interact more in the store and online, the elf will constantly transform themselves, upgrading new roles and new styles for customers to explore. Rewards include Burberry’s exclusive Cafe meals and digital content.

Burberry also launched “social currency”, which rewards customer interaction by issuing social currency to unlock exclusive content and personalized experience. In addition, there are many places in the mini program with the voice guide service of spokesperson Zhou Dongyu, and the celebrity will provide room tour.

Through the WeChat mini program, customers can get all kinds of contents such as in-store guide and product information. User can choose to book “Burberry Space” fitting room. Each fitting room has a unique theme, and there are 10 different spaces.

At the same time, users can choose the clothes they want to try on in advance, and Burberry can play different types of music according to their preferences.

Offline shopping experience service is more than just fitting on. “Burberry Space” offline is a place of shopping and fitting, afternoon tea, and style design.

“Fitting in” selfie is a necessary procedure for many girls to go shopping. Burberry has set up a self-portrait spot in each offline fitting room to encourage customers to take photos and share them with friends.

In addition, high luxury theme cafes are no longer new, such as Dior café and Chanel café in Shanghai, but Burberry has played something that China doesn’t have.

Burberry launched Thomas’ café, which is not just an ordinary coffee shop, but a special area for the Burberry community to connect and interact. It offers lectures, workshops, and live performances in addition to various kinds of snacks echoing the “British and Chinese tea culture”.

Users can book or register upcoming events on the WeChat Mini Program. This is the second in the world; the first is in its flagship store in London, UK.

WeChat advertising trends for luxury products in 2020

Total transactions during China’s 618 shopping festival in 2020 reached 16.91 trillion yuan (about US$2.38 trillion), up 42% from last year, according to Chinese online payment clearing house NetsUnion Clearing Corporation (NUCC).

During the “618” online shopping festival from June 1 to June 18, a total of 26.18 billion transactions were made, an increase of 52% year on year, said the NUCC.

Alibaba Taobao/Tmall 618 2020

More than 100,000 brands have signed up for this year’s Tmall 618, double that of last year’s 618. More than 10 million items have been discounted to participate, which is in line with last year’s Double 11.

Tmall 618 generated a total sales of 698.2 billion yuan (US$98.49 bn). SME merchants saw one more billion orders during this year’s Tmall 618.

The import consumption of Tmall Global increased by 43% year on year. The direct purchase transactions of overseas warehouses increased by 199% year-on-year. As of June 18, more than 4,000 overseas brands doubled year-on-year growth.

Over 2 million merchants opened stores on Alibaba’s Taobao e-commerce platform since the pandemic, creating over 40 million jobs. C2M orders have grown by 500% YoY.

Tmall 618 Warming Up

On May 19, Tmall announced that during the period of 618, Tmall will, together with many local governments and brands, issue the largest scale of cash consumption coupons and subsidies this year, with an estimated amount of more than 10 billion yuan.

Chinese cities have been issuing billions worth of e-coupons to stimulate consumption.

Mini Program platform compared: WeChat vs. Alibaba vs. Baidu

According to Tmall, more than 100,000 brands have signed up for this year’s Tmall 618, double the number last year.

In addition, more than 10 million products will offer discounts in this year’s Tmall 618, which is in line with last year’s Tmall Double 11. All these figures have broken the historical record of Tmall 618.

In this year’s Tmall 618, Alibaba took “consumption voucher” as a new way of “festival making”, leading the national consumption recovery, promoting the release of China’s domestic demand potential, and bringing the biggest growth opportunity for the brand in the first half of this year.

Tmall said that the cash consumption coupons and subsidies issued by Tmall 618 will cover the broadest population ever. Besides, the conditions for using cash vouchers and subsidies will also be the most relaxed this year.

Tmall 618 presales started from 0:00 on May 25, with official sales starting on June 1 until June 20, 2020.

The epidemic has affected all aspects of society, and businesses have also suffered from different degrees of damage. They are looking forward to “a key battle”, either to turn the tide or to ensure growth.

Tmall 618 is such an opportunity. According to the analysis of the insiders, the biggest wave of consumption subsidy will come in Tmall 618 after the epidemic enters the stage of normalization prevention and control.

Tmall and over 100 furniture sellers, such as IKEA, Kohler, KUKA, QuanU, and Linshimuye, will launch a 3D shopping feature, allowing customers to “see” how the furniture fits into their homes.

Affected by the epidemic, since February of this year, a large number of offline stores have launched stores on Tmall, including IKEA, Tesla, and etc.

Close to 180 luxury brands are participating this year, nearly double the amount from Double 11 2019 Global Shopping Festival. Burberry, Montblanc, Cartier and Michael Kors are offering customized special edition items co-created with Tmall just for 6.18.

Coach, MCM, and Theory are participating in the campaign for the first time, and all recently launched outlets on Tmall Luxury Soho.

To many merchants in China, previously participating in the 618 promotion was a growth engine; but, now it’s more “life saving”.

Tmall 618 First Day Sales

In the first hour of Tmall 618 pre-sale, the total transactions increased by 515% year on year. Within the first two hours of the pre-sale, the transactions of several brands including Lancome and L’Oreal exceeded 100 million yuan. Subscribe to get more timely insights.

At the opening, an hour and 29 minutes of Tmall 618, the total transactions referred by Taobao Live reached 2 billion yuan (US$280 million), far more than that of the same period last year.

Since the launch of Tmall 618’s pre-sale on May 25, the number of live shows on Taobao has exceeded 1.4 million.

On June 1, Taobao Live delivered total sales of 5.1 billion yuan with over 20 brands and merchants exceeding 10 billion yuan in live streaming.

Jingdong (JD) 618 2020

JD 618 total transactions (1-18 Jun) reached 269.2 billion yuan (US$37.98 bn), up 33.6% YoY.

• Top categories by growth rate: fresh food, medical & health care, kitchenware
• Top categories by sales: mobile phones, home appliances, PC & digital products
• Top categories by the total number of customers: food & beverages, baby & maternal, beauty products

JD’s 7Fresh GMV increased by 100% year on year, and the turnover of more than 1000 fresh brands doubled during JD 618 sales (1-18 Jun).

More than 25,000 live broadcasts of Jingdong home appliances during 618 delivered the more GMV than the first five months’ total.

In addition, during the whole 618 periods, the cumulative turnover of air conditioners doubled over the previous year; the cumulative turnover of refrigerators and washing machines increased by 130% over the previous year; there are 10 third-party stores with a turnover of more than 100 million yuan on JD home appliance platform, and more than 1000 third-party stores with a turnover of more than one million yuan.

This is the 17th year for JD.com to hold its 618 Grand Promotion. JD will provide RMB 10 billion yuan in subsidies, hundreds of billions of discounts, and 10 billion yuan consumption coupons during the JD 618 event this year, announced on 25 May.

JD 618 Planning

This year’s 618 is the sales promotion with the largest amount of discounts ever with most new product launches. Among the many discounts and promotions offered, JD.com provided over 200 million units at a 50% discount and sell over 200 million units of new products.

JD.com would also help more than 150 brands to sell over RMB 100 million in products through innovative empowerment initiatives, subsidy support and other measures, and help more than 100,000 small and medium-sized brands and merchants to double their transactions.

JD would host over 300,000 key live streaming sessions during this year’s 618. It will also work with partners including Kuaishou, Douyin (TikTok), Wesee, Bilibili, Huya, Douyu, and others.

JD would invite top executives from brands such as Huawei, Honor, and Haier to interact with consumers directly, offering big discounts. JD’s executives and sales managers will also join JD Live.

JD Live would invite more than 100 civil servants, such as mayors, county heads, and directors of commerce to act as live streaming anchors to promote local agricultural products to help farmers and industries affected by COVID-19.

Home Appliance

Over 40 brands have created over 200 special production lines to produce over 1,000 exclusive products.

For example, Dyson would offer 70% of its Dyson Airwrap inventory to JD during 618. Some other promotions include a 60-inch 4K TV for less than RMB 2,000 yuan, a 55-inch 4K smart TV for RMB 1399 yuan, a Panasonic dishwasher for RMB 1899 yuan, and a new Midea air circulator for RMB 459 yuan – prices are significantly lower than usual.

JD has upgraded its service during 618 so that customers can enjoy a 30-day price protection policy for home appliances bought on JD’s first-party platform, and the option to replace a new home appliance with a quality problem within 180 days.

JD would also provide integrated delivery and installation service for TVs, and fast installation service for air conditioners.

JD would also offer RMB 300-600 yuan subsidies for people who trade in old air conditioners for new ones. It would provide a pre-sale video service to help guide consumers in the purchase of home appliances.

In addition, offline stores JD’s E-Space would participate in a 24-hour promotion on June 18th, providing customers with subsidies and discounts. JD’s over 12,000 home appliance experience stores would leverage live streaming for marketing promotion, covering Hebei, Henan, Hunan, and Guangdong provinces.

JD 618 First Day Sales

JD 618 started at 0:00 on June 1. According to JD, in the first hour, the transactions of Apple products were three times of that of the same period last year; luxury goods achieved a 400% growth and completing full day sales last year.

June 1st, the first day of JD’s 618 Grand Promotion, saw total transaction growth of 74% YoY. Forty brands individually achieved sales of over RMB 100 million. Check out the 7 consumption trends based on first-day sales data.

Sales of JD Super, JD.com’s online supermarket, increased by 100% compared with the same period last year. Sales of JD.com’s 7FRESH increased by more than 140% compared with the same period last year and JD New Markets grew by more than 100% year on year.

Compare with the same period last year:

• On June 1^st, sales of food categories in JD Super was three times.
• Sales of baby and maternal categories increased by 100%
• Sales of pants-type sanitary pads in the individual care category and female care increased by 12 times.
• Dental patches under the subdivision of oral care increased 19 times
• Sales of smart pet devices increased nearly 7 times
• The two-hour sales of toys exceeded the all-day sales of last year.

JD.com’s customized products also witnessed explosive growth including C2M, exclusive brands, first sales of new products, underwriting of tail goods, exclusive specifications, etc., and in only 4 hours exceeded the all-day sales in the same period last year.

JD Super brand merchants and retailers made efforts to reach the lower tier market. JD Super got off to a good start for 12 hours on June 1st. Sales in the lower tiers market increased by 160% compared with the same period last year, and the number of users from lower-tier markets increased by 83% compared with the same period last year.

JD.com’s outbound e-commerce platform witnessed a 742% growth in transaction volume on June 1st , compare with the same day of last year.  The top five markets are the United States, Hong Kong, Taiwan, Japan and Canada.

The number of customers in Hong Kong grew by 370% year-on-year, while transaction volume by 266% year-on-year.

JD Worldwide (Cross-border e-commerce platform)

On June 18th, sales of JD Worldwide (JD’s cross-border import e-commerce platform) increased 110% y-o-y. Imported pet products increased nearly 400% y-o-y, imported beauty products increased 180% y-o-y, and imported electronics products, maternal and baby products, health care products, fashion products have all increased over 100% y-o-y.

From June 1^st to 18^th, over 30% of countries saw sales of their products more than doubled.

JD Worldwide has introduced over 1,000 new brands as of May 2020, and welcomed over 500 stores on third-party platform, including Abbott, Nestlé, as well as international chains such as South Korean department store AKPLAZA and Japanese drugstore Daikoku Cosmetics. During this 618, sales of the stores increased by over 100%.

This 618, JD Worldwide introduced 30,000 new international products to JD customers. On June 18^th, sales of new products were 15 times that of the average daily sales in May. From June 1^st to 18^th, sales of over half of the new products increased by over 200% compared with the same period of May.

Other Retailer & E-commerce Platforms

Gome’s one day GMV on 18 June increased by 73.8% YoY. 65 inch TV sales increased 186% year-on-year, and OLED TV showed 285% growth. Its 618 sales (1-18 Jun) exceeded May’s total sales.

Xiaomi’s total sales have reached 10 billion yuan across all platforms during the 18-day sales period.

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Top traffic driver compared: TikTok/Douyin vs. Kuaishou vs. Bilibili vs. RED

Kuaishou (Kwai) Technology and Jingdong (JD) Retail Group signed a strategic cooperation agreement on 27 May 2020 that enables users to buy JD products on Kuaishou platform directly.

The two companies will cooperate in the supply chain capability building, brand marketing, and data capabilities building of the Kuaishou Store, and jointly create a new ecosystem of short video live streaming.

Sales from Alibaba live streaming platform grew by 150% for 3 consecutive years.

JD Retail provides superior products to Kuaishou Stores and Kuaishou anchors will select and sell the products. Users can buy JD.com products directly on Kuaishou Shop and enjoy the delivery and post-sales services provided by JD.

This partnership is happening soon during China’s 618 Shopping Festival and will kick off during JD’s 17th Anniversary Grand Promotion (“618”) and Kuaishou’s June 16th Shopping Festival. From June 16th to 18th, products from JD’s first-party business will be available for to a portion of Kuaishou’s live streaming KOLs.

At the same time, JD Retail and Kuaishou will collaborate to strengthen brand marketing capabilities. Kuaishou’s anchors will do live streaming and short video marketing, and JD will provide joint marketing capabilities and fulfillment services, to enhance the core competitiveness of both brands.

The two parties will also explore targeted marketing based on JD’s insights on customer shopping behavior and Kuaishou’s understanding of short video and e-commerce live streaming.

“The retail industry is facing the opportunities and challenges of more and more diversified consumer demand and consumption scenarios. JD Retail has China’s leading retail supply chain, and is trusted by hundreds of millions of customers because of its quality product offerings and services. It is committed to driving the transformation of the retail industry through opening up its own capabilities. Kuaishou is a short video social platform loved by hundreds of millions of users. The partnership between JD Retail and Kuaishou will provide Chinese consumers with a high-quality experience in richer shopping scenarios,

said Lei Xu, CEO of JD Retail.

Since the beginning of this year, short video live streaming in e-commerce has been developing rapidly. Check out Taobao Live’s Stunning Growth in 2020.

As a short video live broadcast platform with more than 300 million daily active users, Kuaishou is the earliest explorer in the e-commerce live streaming industry with leading advantages in the number of users and the creation of new scenarios.

As early as June 2019, Kuaishou announced that users can view JD products in the Kuaishou app and be redirected to the JD app to make a purchase.

The latest cooperation is an upgrade and will supplement and advance Kuaishou in terms of product offering, and is also in line with Kuaishou’s goal to expand its boundaries to brands and high-quality goods.

JD will gain in terms of being able to reach new users and push into new scenarios in the emerging e-commerce live streaming market.

Explore 9 Brands’ great results from WeChat Mini Program live streaming campaigns

These coupons are for all people in Wuhan. WeChat real-name verified users can enter the corresponding mini program to collect the coupon.

At the same time, there are 1.8 billion yuan (US$254.63 million) worth of business coupons issued by online platforms. The first phase started at 12:00 p.m. on April 19 and will last for six weeks until May 31 2020. And, the second phase will start on 1 June 2020.

One coupon can be collected at a time, with a face value of 10 yuan, 20 yuan, 50 yuan, and 80 yuan. The first phase will have 30 million yuan coupons, redeemable from 20th April onwards.

The Wuhan consumption voucher received by consumers through the WeChat mini program is applicable to the merchants who use WeChat merchant payment settlement. However, merchants who use the personal WeChat payment code, will not accept those vouchers.

According to Hangzhou Municipal Bureau of Commerce, the city’s fifth round of e-consumption coupons was issued at 8pm of 20 April, with a total of 1.5 million digital card packages. Each has a total value of 50 yuan, including 5 general consumption coupons with a value of 10 yuan each and 10 yuan further subsidy for every 40 yuan consumption.

As of 24:00 on April 16, 321 million yuan (US$45.41 mn) of Hangzhou government subsidies had been claimed in the first four rounds of coupon campaigns driving a total consumption of 3.422 billion yuan (US$484.05 bn).

As of 20 April 2020, cities in Guangdong province have issued 1 billion yuan worth of e-coupons.

Update (5 Jun): Since the worst of the Covid-19 outbreak in China, the country has issued over RMB5.6 billion ($788 million) in such incentives.

China GDP declined by 6.8% in Q1 2020

Tongcheng-eLong’s average MPUs increased by 21.5% year-to-year from 22.3 million in Q4 2018 to 27.1 million in Q4 2019.

Its revenue increased by 24.4% year-to-year to RMB1,956.5 million in Q4 2019. And, the adjusted EBITDA increased by 47.7% year-to-year to RMB415.1 million. Adjusted EBITDA margin increased from 17.9% YoY to 21.2%.

The adjusted profit for Q4 2019 increased by 67.7% year-to-year to RMB 331.1 million in Q4 2019. The adjusted net margin increased from 12.6% in Q4 2018 to 16.9%.

In 2019, the average MAUs of Tongcheng-eLong increased by 17.1% year-to-year from 175.2 million in 2018 to 205.2 million. And, the average MPUs increased by 34.5% year-to-year from 20.0 million in 2018 to 26.9 million.

The total GMV grew by 26.3% to 166.1 billion yuan in 2019. eLong’s paying ratios also increased from 11.4% in 2018 to 13.1% in 2019.

In 2019, Tongcheng-eLong’s total revenue increased by 21.4% from RMB 6,090.8 million in 2018 to RMB7,392.9 million in 2019.

Adjusted profit for the year increased by 35.4% from RMB1,140.7 million in 2018 to RMB1,544.3 million in 2019 and adjusted net margin for the year was 20.9% in 2019, representing an increase from 18.7% in 2018.

As of December 31, 2019, approximately 85.6% of its registered users resided in non-first-tier cities in China. About 62.4% of newly acquired paying users in WeChat were from tier-3 or lower-tier cities in China, which increased from 61.1% over the same period of 2018.

Currently, WeChat users can access its mini program within the WeChat ecosystem through:

1. WeChat Pay (Wallet) portal and a drop-down list of users’ favorite or most frequently used mini programs, which generated an average MAUs of 113.6 million in 2019, accounting for 65.7% of the total average MAUs of its Tencent-based platforms.

2. Interactive advertisements placed on the Tencent-based platforms, which generated an average MAUs of 37.7 million in 2019, accounting for 21.9% of the total average MAUs of its Tencent-based platforms.

3. The sharing and search functions in WeChat, which generated an average MAUs of 21.5 million in 2019, accounting for 12.4% of the total average MAUs of its Tencent-based platforms.

In addition, the average MAUs in its native apps recorded a faster growth than that in WeChat channel in the second half of 2019, mainly due to the expanding investments in marketing and R&D resources.

As of December 31, 2019, Tongcheng-eLong online platforms offered over 6,800 domestic routes and around 1.4 million international routes operated by more than 400 domestic and international airlines, over 2.0 million hotels selections and alternative accommodation options, approximately 346,000 bus routes, over 500 ferry routes and approximately 8,000 domestic tourist attractions ticketing services.

It has launched an accommodation upgrade service “WeChat Payment Point” with Tencent and an online seat selection service for international flights with China Southern Airlines with the implementation of NDC technology.

For the first quarter of 2020, it expects net revenue to decrease by about 42% to 47% year over year due to COVID-19.

In the first quarter and the whole year of 2020, the number of domestic tourists will decrease by 56% and 15.5% respectively according to China Tourism Academy. 2020 will see a decrease of 932 million person-trips. See the forecast here.

The average mobile MAUs of Likee (formerly known as Like) increased by 208.3% to 115.3 million in Q4 2019 from 37.4 million in Q4 2018.

The average mobile MAUs of JOYY’s global live streaming services increased by 21.5% to 158.9 million from 130.8 million in Q4 2018, 102.8 million of which were from China, including 41.2 million from YY, which increased by 3.8% year over year, and 61.6 million from Huya, which increased by 21.5% year over year.

56.1 million live streaming MAUs were from outside of China, including 23.1 million from BIGO LIVE, which increased by 18.6% year over year, and 33.0 million from HAGO (casual-game-oriented social media platform), which increased by 57.9% year over year.

Average mobile MAUs of imo was 211.0 million.

The total number of paying users of YY increased by 9.8% to 4.5 million from 4.1 million in Q4 2018. Total number of paying users of Huya increased by 5.9% to 5.1 million from 4.8 million in Q4 2018. See Huya’s competitor Douyu here.

YY’s financial highlights in Q4 2019:

• YY’s net revenues increased by 64.2% to RMB7,618.2 million (US$1,094.3 million) from RMB4,640.9 million in Q4 2018.
• Net income attributable to controlling interest of JOYY Inc.1 was RMB172.8 million (US$24.8 million), compared to RMB694.7 million in Q4 2018.
• Non-GAAP net income attributable to controlling interest of JOYY was RMB600.8 million (US$86.3 million), compared to RMB846.9 million in Q4 2018, primarily due to the impact of the consolidation of Bigo Inc (“Bigo”)

YY’s net revenues increased by 62.2% to RMB25,576.2 million (US$3,673.8 million) from RMB15,763.6 million in 2018. Net income attributable to controlling interest of JOYY Inc. was RMB3,445.2 million (US$494.9 million), compared to RMB2,209.0 million in 2018.

Non-GAAP net income attributable to controlling interest of JOYY was RMB2,252.6 million (US$323.6 million), compared to RMB3,274.1 million in 2018.

9 Brands’ great results from WeChat Mini Program live streaming campaigns

Here are nine brands that took the lead in showing their achievements according to WeChat.

Alibaba’s DingTalk beat WeChat in total downloads amid coronavirus outbreak

Brands like Innisfree, a beauty make-up brand, Septwolves, UrbanRevivo, Lily, Jack&Jones, VeroModa, MISS SIXTY, Ochirly, retailer Watson, Rainbow, Jiangxiaobai, have all been connected to the Mini Program’s live streaming. Let’s see some quick case studies below.

An Jiao La, a beauty make-up blogger recently launched a live streaming session at the webcast room of the “Perfect Diary Member Store” Mini Program.

This is the first time that she made sales in the form of a live streaming. She demonstrated beauty make-up products in front of over a hundred thousand people.

In two and a half hours, the live broadcast received 1.709 million likes. Products like Queen’s Day Gift Box, Make-up Brush Set were sold out, the average sales volume of the Mini Program live broadcast sessions increased by 8 times.

How Taobao’s social affiliate platform Taoxiaopu works

In February 2020, WeChat Mini Program live broadcast of the fashion brand Perfect Diary saw the average number of people watching the show increased three to ten times from the previous month, while the purchase conversion rate was two to three times higher than other platforms, according to WeChat.

The retail brand Han Guang Bai Huo first tested live broadcast of its franchised stores, which witnessed over 10 thousand views per session and online sales increase of 300% for a single item within one day.

VGRASS, a women’s apparel brand, presented a brilliant result of its debut webcast on the 26th of February – over 120K views of a single session, 740 thousand interaction and likes.

The short two and half hours live streaming created sales value of over 1 million yuan, with the average order value of 2,500 yuan while the highest single item price was 8700 yuan.

Another women’s apparel brand Eifini debuted on the 6th of February, the number of the Mini Program visits increased by 566% compared with the previous month while the sales increased by 372% over the previous month.

On February 21, the debut of the women’s apparel brand Inman‘s live streaming attracted over 1 million views and gained 260 thousand likes; and, total comments during the live broadcast exceeded 110 thousand.

BBG, a retail brand, launched the live streaming function on its Mini Program on February 26, within the first 30 minutes, the sales exceeded 400 thousand yuan, the click to purchase conversion rate of the debut session was 15.3%.

The number of new users of the beauty make-up brand Misifu’s Mini Program – Misifu Smart Store, increased by 500% over the previous month since the brand launched Mini Program live broadcast on February 18.

The sales increased by 300% and the average transaction value increased by 70% respectively as compared to the previous month.

The leisure clothing brand Fast Fish gained 200 thousand views through its debut Mini Program live streaming on February 5, which ended with sales of 500 thousand yuan. The next day, the sales soared to 1.3 million yuan.

Out of the 1.135 million yuan sales of the fashion branch Aike, which was gained during its debut Mini Program live broadcast back in November of 2019, about 200 thousand yuan was contributed by new users.

All the above-mentioned brands have leveraged WeChat Mini Program live streaming function, which was officially developed by the WeChat team.

Check out our business guide to WeChat Mini Program live streaming