Since January 2011, Tencent‘s WeChat (better known as “Wēixìn” in China) has been building a community allowing free chat and voice messaging around the world. It now has nearly 300 million users, though mostly in China, and the chat app has proven so popular as a replacement for ordinary SMS text messaging that it has Chinese mobile telecom operators complaining about lost revenue and threatening to curb data usage for the service.
China’s favorite chat app is now looking to monetize, and not just with the recent addition of in-app purchases like special emoticons or links to (especially Tencent’s own) mobile games where in-game boosts can be purchased. They have started to place vending machines around Beijing’s subway, allowing users to purchase discounted beverages using the WeChat app.
This move might seem small or meaningless to the average user but this is part of a larger strategy to compete with Alipay (Chinese equivalent of PayPal). To use this vending machine, WeChat requires users to sign up by linking their banking information to Tenpay, Tencent’s own financial online and mobile payments platform. Only then are users eager to save a bit of money able to buy drinks from the vending machines. WeChat is expected to add additional services in the coming months.
WeChat is also experimenting with celebrity endorsements. According to Quartz, WeChat introduced in September a “new service that lets users pay 18 yuan (~$2.94) a month for extra content from celebrities like Chinese actor Chen Kun—pre-recorded wake-up greetings, diary entries, photos and the like.” Add this to Tencent’s user-acquisition strategy to convert the 300 million WeChat users into being Tenpay users as well for a larger portion of the online and mobile payments market.
On October 25th, Campaign China reported that Tencent hired ad agency Leagas Delaney Shanghai to enhance WeChat’s visibility in the growing field of mobile app payments. We can expect to see an ad campaign rolled out over the next few months.
So, what does this all mean for the app and users? Tencent is looking for different ways to monetize WeChat so the app can remain free. There will be no change in service and users are not required (at this time) to sign up for Tenpay. The app should continue to function without advertisements and users will not be required to participate in any of the new programs, but over the next year, users can expect to see new offerings as WeChat experiments with monetizing the app.