If you’re looking to open up your business to the Chinese market, WeChat Pay is the payment method you need to add to your payment mix. Increasing use of digital payments, such as WeChat Pay, has fuelled the growth of eCommerce and mobile commerce in China, making it the top performing eCommerce country with $2.29 trillion in eCommerce retail, with the US and the UK lagging by a significant margin. Businesses setting out to reach Chinese consumers must have a firm grasp of the market’s intricacies and preferences, as the appetite for digital payments shows no signs of slowing down.
The eCommerce landscape in China
The Chinese market is no stranger to eCommerce as nearly 80% of the local population had shopped online by December 2020. Consumers globally are known to switch between channels as they shop, however, Chinese shoppers have a strong preference for their mobile devices. China's affinity for connectivity is inextricably linked with the growth of mobile commerce. Mobile commerce in the region is soaring, with sales via mobile devices taking a 60% share of the local eCommerce market. When you take into account the prioritisation of implementing 5G wireless technology by the Chinese government, China is well on its way to leading the charge of a mobile-first approach.
Tapping into the massive digital engagement of Chinese consumers, WeChat (owned by tech company Tencent) is the most popular local messaging app surpassing 1.2 billion users in 2020. In reality, WeChat has outgrown the standard functionalities of a messaging app, transforming into a powerful hub where Chinese consumers can do pretty much everything; ‘Mini Programs’ are WeChat’s ecosystem of apps within the app, allowing the user to do anything from shopping online to ordering food, gaming and hailing rides, among the most popular options.
WeChat Pay is the digital wallet solution available to the app’s vast network of users, counting 800 million customers in China and across the world. It’s so prominent that Chinese businesses spanning from high-street luxury retailers to small businesses and street food vendors are offering it as a payment method.
What is WeChat Pay?
WeChat Pay is the payments service provided by WeChat that works as a digital wallet. It can be used to make online and offline payments, such as in grocery stores, high street shops, transportation and small businesses, placing it as the top preferred payment method for Chinese consumers.
While WeChat as a messaging app is available for users across the globe, to use WeChat Pay the consumer’s ID must be issued by the Republic of China. Popular Western social media companies like Facebook, Google and Twitter face heavy restrictions in China. Therefore, it’s all the more reason to understand the power of WeChat and offer WeChat Pay to target Chinese consumers living inside and outside of China.
Desktop-to-mobile QR code payments are popular among WeChat Pay users across the globe.
How does WeChat Pay work?
WeChat Pay is a digital wallet that can be loaded with funds by connecting to the user's credit or debit card. One of its most prevalent uses is QR code payments.
Vendors can generate their QR code on their checkout page to collect a payment. Consumers open WeChat to scan the code, confirm the payment amount and finally pay after passing the security checks. As soon as the consumer scans the code with WeChat Pay, the amount is automatically filled in and the payment is completed.
Demographic profile of WeChat Pay users
Statista research shows that the majority of WeChat Pay users in China is 25-34-years-old (34%), followed by 35-44-years-old (28%) and 18-24-years-old (18%). Additionally, 43% of them live in megacities and 25% in large cities, demonstrating how internet adoption is falling behind in Chinese rural areas. The largest share of consumers access WeChat Pay through their mobile phones (93%) and, interestingly, 47% of them are more likely to post texts and status updates on social networks than the average online user.
In practice, these shoppers show a strong potential to share their purchase with their social network which could prove an efficient word of mouth promotion for retailers offering this payment method. Furthermore, travel stands out as an important interest of WeChat Pay users, only followed by music and health and fitness.
Is WeChat Pay relevant to your business?
WeChat Pay is relevant to retail and travel online businesses that currently have, or aspire to, reach Chinese customers. A joint study by WeChat owner company, Tencent, and Tsinghua University's Institute for Global Industry found transaction value increased 62% year-on-year to $1.16 trillion in 2019.
emerchantpay as a global payment service provider can help your business integrate WeChat Pay into your payment strategy and gain traction in the sought-after Chinese demographic wherever they are in the world.
Contact our payment experts to learn more about integrating WeChat Pay into your payments strategy and start growing your business.