Chinese consumers embrace apps like WeChat with gusto
Chinese consumers embrace apps like WeChat with gusto
A view from Peng Yan, director of operations Qumin, Shanghai

Why China's social media scene outshines the 'static' West

Despite working in Chinese social media for many years I keep in touch with developments in consumer digital communication in the UK. What always strikes me is the fact that there have been no real changes for many years. Compared to China, the West appears to be static.

For Chinese consumers, dynamic change in the digital arena is accepted as an inevitability that is warmly embraced. Radically new applications and services are introduced and adopted at a truly astounding pace.

Take WeChat, for example. It is an incredibly popular micro messaging app that provides a huge range of options for users and also includes a proprietary payment system called TenPay that allows for social e-commerce and m-commerce. Plus, it integrates with TVs manufactured by owner Tencent.

However, WeChat has just launched a taxi hailing and fare paying service in conjunction with Didi Dache, one of country’s biggest taxi booking service providers. It works based on sending out a message with journey details which are picked up by taxi drivers within the relevant geographic footprint.

In the first week and a half of launch 100,000 taxi were hailed and paid for via the service. On the first day, which was for iOS mobiles only in Beijing, there were more than 20,000 taxi bookings, over 6,000 of which were paid for using TenPay. It was subsequently rolled out to more cities and in three days from January 10 to January 12 bookings and transactions clocked in at 27,000, 36,000, and 38,000 respectively.

It is tempting to point a condescending finger at the West and ask what its great 2014 social media innovation is

As well as demonstrating the dynamic development of social media, the taxi facility also provides a good illustration of how marketing and logistics in China combines with technical applications.

To promote the new WeChat service taxi drivers who use the system receive a fare bonus of RMB 10 – about 90 pence. Customers also get a fare discount, and 10,000 free journeys paid for by WeChat are given out each day. Of course, this was all backed up with an integrated media launch with social media being the main communications conduit. To date more than 21 million taxi journeys have been booked.

Given such developments it is tempting to point a condescending finger at the West and ask what its great 2014 social media innovation is? Instagram has a new digital filter option?

But seriously, can you imagine Facebook rounding up black cab drivers in London and incorporating them into a social e-commerce operation? Well the job would be much bigger than that. To replicate the scale of WeChat’s achievement you would have to include cab drivers in all UK cities, plus New York, Chicago, San Francisco, Paris, Berlin, Rome, Moscow and Milan.

New innovations

But the new taxi service has not been a central focus of WeChat. It is constantly launching new innovative products. It has now entered the personal finance market with a ‘wealth’ section through which users can store their savings straight from their smartphones via TenPay, and backed by Huaxia Bank. The savings limit is currently capped at £100,000 - this may well change – and the interest rate is an annual 6.435 percent with no minimum investment.

Another major initiative which is shortly expected to rollout is a service through which it will be possible to buy from vending machines using TenPay. Testing shows it does work. What is more, it is important to realise that though hugely popular, WeChat does not have as many users as Sina Weibo, and nor does it undertake anything like as many transactions as TMall or several other online marketplaces.

Radical developments in social media and e-commerce are, of course, possible because of the sheer scale of the consumer market, but just as important is the will of social media owners and consumers that have the required imagination and commitment to what is new. Back in the UK social media is based on simple commodity based messaging, and looks to stay that way for the foreseeable future. Incidentally, a simplified version of WeChat is available in English and useable on all types of smartphone.

In China’s tier one cities there is internet connectivity throughout the entire underground rail system

Innovation and adoption of new services in China is also matched by communications infrastructure. In China’s tier one cities there is internet connectivity throughout the entire underground rail system, and there are very few areas in China in which I have not been able to get a good mobile signal. In fact, in outlying regions that have unreliable electricity supply you can normally get a good 3G reception.

Another illustration of consumer enthusiasm to embrace technology is the high usage of mobile devices as opposed to PCs. The number of consumers using landlines for connection is falling and those using mobile is greater than the total population of Europe and rising fast. The trend is beginning to influence online buying behaviour. Historically work computers have been used for making high volumes of consumer purchases. There is little doubt this will change to buying on the way to and from work, particularly in the larger cities. In part this is driven by greater internet access, but also due to technology and social media.

The influence of social media is hard to overestimate. Peer recommendation through the medium is the most influential factor in making buying decisions, and using it to research products and find recommendation plays a huge part in Chinese commercial life.

So if consumers see an item advertised on public transport, or clothing being worn that they like, they can research it to find out what the peer group consensus is and just as important, what KOLs say (Key Opinion Leaders), and if satisfied buy it using social e-commerce. This process can also be enhanced by brand owners and retailers using outdoor interactive advertising, which is expected to become widely seen in coming years.

The pace of progress will get faster as the digital platforms compete in an arms race for consumer attention. For digital marketers this is hugely exciting if not demanding given the amount of attention required to keep on top of developments.

Meanwhile, back in the UK friends merrily post bits of information on Facebook and Twitter about what they are doing, who they have seen and their opinions. It is a good way to keep in touch, but it is not digital communication as we know it in China.