As the battle between China and the coronavirus outbreak stepped into its fifth week, the Chinese economy has without doubt taken a serious hit. Millions of corporations, especially small-and-medium enterprises, are fighting to survive. In a world with empty streets, where all brick-and-mortar stores are forced to close, merchants in all industries look for ways to accelerate their transition to online operations, while also moving offline distribution channels online.
Other than established e-commerce platforms like Alibaba and JD.com, WeChat’s mini-programs are still new to a large number of business operators and Westerners; however, it is expanding into non-negligible channel for consumer transactions, especially in catering and fresh food industries. Yesterday, Tencent’s WeChat team officially announced an accelerated approval process for businesses to launch their own mini-programs within WeChat’s ecosystem.
What is a WeChat Mini-program, really? Mini-programs are built-in apps within WeChat, the instant messaging turned super app that is woven into all aspects of Chinese people’s lives. It allows users to have access to millions of apps, from games to e-commerce platforms, to government service providers, without downloading anything. While the mini-program initiative has only existed for three years, WeChat Mini-programs have attracted more than 300 million daily active users, launched 2.3 million existing programs, and generated 800 billion yuan in transactions through e-commerce sales in 2019.
Here’s a relevant personal anecdote: I recently forgot to bring my government ID when trying to check in at a hotel. While I was upset with myself and annoyed by the fact that I might have to sleep on the street without an ID, the front desk smiled calmly and asked for my phone. She simply opened my WeChat, looked up the Shenzhen city council’s official mini-program, and asked me to type in my personal info to get a temporary ID.
From ordering dishes at a restaurant to purchasing air-plane tickets, businesses and entities from all fields can launch their own mini-programs within WeChat. The advantages are crystal clear – from businesses to governments, mini-programs can be accessed via a social media app that covers 98% internet users in China, while the customers enjoy enhanced convenience.
Merchants are becoming more and more aware of the importance of WeChat mini-programs. Since the outbreak of coronavirus in early February, consumers have been staying at home to quarantine themselves, which led offline business volume to drop by between 60% and 80% on average. On the other hand, transactions via mini-programs in the fresh food industry have tripled since the Chinese New Year. In addition to supermarket chains, fashion and lifestyle brands are testing new ways to attract traffic within the mini-program ecosystem in preparation for an impending offline retail. Companies took advantage of live-streaming, WeChat group sales operations, and WeChat Moment ads to reach customers and increase online conversion rates.
One burning question every retail brand asks is how to increase and guide traffic to mini-programs. Tencent’s retail team is also wrestling with the very same issue. According to 36Kr, Tencent opened a Smart Retail Entrance on WeChat payment portal for users located in Shenzhen, in an effort to support retail partners with its private traffic pools. Industry leaders such as Uniqlo, Walmart, and Yonghui Supermarket already launched their mini-programs into through this new portal. According to WeChat official data, Yonghui supermarket’s home-delivery services in Fuzhou saw revenue increase by 600%, reaching 200 billion yuan in sales during Chinese New Year.
As an observer of the coronavirus epidemic, other than witnessing the sadness and pain to both the Chinese economy and health of the society, I am also seeing opportunities for industry innovation. When a community with more than one billion people are forced to stay at home for more than a month, what does it mean for the economy and commerce? What impact will it have after coronavirus is over? Let’s wait and see.