Tencent just released statistical comparisons on WeChat Pay transactions for the first three days of May Holiday and the first three days of this year’s Golden Week holiday.
What is WeChat Pay?
Similar to Apple Pay/Samsung Pay or other digital wallet and onl
ine payment systems, it allows users to make in-app and tap-to-pay purchases via WeChat. However, unlike the western payment apps where certain machines with contactless readers are needed, users can simply scan the vendor’s WeChat Pay QR code or show their own WeChat Pay QR code for the vendor to scan to complete transactions. Brands can also offer WeChat Pay on any of their WeChat assets such as e-commerce mini programs or HTML5 pages.
Offering WeChat Pay is crucial for driving sales on WeChat. Lack of WeChat Pay integration will cause a severe reduction in conversions and loss of opportunity to collect data on the user’s stage of customer lifecycle.
Now, back to the data. Here are some key statistics from WeChat Pay:
The data shows that WeChat Pay spending in the first 3 days of Golden Week (Oct 1st-3rd) is significantly higher than that of the May Holiday (May 1st-3rd) for travel, travel retail, and retail industries alike. Even though the Ministry of Culture and Tourism reported a tourism revenue of 312 billion yuan for the first four days of this Golden Week holiday, which is down 31% from the same period last year. This could indicate that the travel and retail industries in China are slowly recovering from the effects of the pandemic, but users are growing an affinity towards e-payment/e-commerce.
The significant increase in WeChat Pay spending could be because of these main factors:
- Different Holiday Expectations: May Holiday is a shorter break with less time & emphasis on traveling compared to the two-in-one week-long holiday with cultural expectations to travel for family reunions, a holiday comparable to Thanksgiving
- Effects of the Pandemic: Traveling was considered a higher risk in May due to the severity of COVID-19 then with only around 104 million travelers for the first 4 days of the May Holiday whereas it has already reached 425 million travelers in the first 4 days of this holiday
- Changes in Consumer Behavior: Measures taken to stop the spread at offline touchpoints such as closing stores, limiting in-store traffic, or only accepting contactless payment all contributed to the rapid digitalization of businesses and the adoption of e-commerce offerings such as WeChat mini programs and WeChat Pay
Whatever the cause of this rise in WeChat Pay spending may be, the fact remains to be the increasing importance of a WeChat-centric e-commerce strategy. Here’s why:
By integrating your WeChat Pay with the rest of your WeChat properties, you would be able to have a single source of truth for every one of your followers and the stage of the customer journey they are at. Then drive them to the next stage by optimizing acquisition, engagement, conversion, and retention efforts such as customer service, live streaming portals, or loyalty program mini programs.
As for your customers, you would be able to offer a seamless experience from sharing recommendations with friends to making reservations with pre-filled information to one-click payment via WeChat Pay to receiving reminder notifications — efficiently moving through the entire customer journey on the app they use most.
In our initial touchpoint reports, we found that among the luxury fashion brands or the destination marketing organizations we surveyed, only 60% and 41% offered WeChat Pay respectively. As WeChat and the growing possibilities of its ecosystem grows to adapt to the new e-commerce-savvy consumers, WeChat Pay and mini programs will only play a more crucial role in user conversion. Make sure to get in touch with us today to learn how you can optimize WeChat experiences and drive results!
In case you missed it — Here’s a case study on how we supported one of the world’s largest luxury jewelry brand to set up their e-commerce store on WeChat so they could fully control traffic, custom data, and the customer experience!