Nov 20, 2013 06:54 PM

Closer Look: Who Rules the Virtual World? WeChat Does

(Beijing) – Businesses of all stripes are trying to figure out ways to make use of Tencent Holding's WeChat app, lured mainly by the messaging service's large number of users.

On November 18, Tencent held a conference in the southern city of Guangzhou to meet potential WeChat partners and no fewer than 5,000 representatives from various businesses attended.

WeChat started appearing on smartphones in October 2010 and the app was an instant hit. The company can brag that 270 million people use it every month to send typed messages, voice clips, photos and emoticons. Naturally, this got people wondering how Tencent will open the app to businesses and all sorts of services.

In August last year, WeChat started allowing these entities to have accounts on the app. Since then, 2 million have been opened in a dizzying array of offerings. Users of the app can now use it to read news, shop, do some banking and get information from the government. 

The operators of WeChat used the conference in Guangzhou to send out two important messages. First, the app will remain free to business accounts even as more services are offered. Second, WeChat will begin promoting its own payment service.

This echoes previous comments made by Tencent's chairman, Ma Huateng. He has said that in the future the Net will "connect everything," so WeChat aspired not only to connect people to other people, but also to a range of products and services.

Tencent also used the recent conference to show how users of the app can buy goods and get information. It pointed out that WeChat has partnerships with a vending machine provider (Ubox), a chain of coffee shops (Pacific Coffee Co.), an appliance maker (Haier) and a police force (Guangzhou's).

It seems Tencent is trying to make it so users of mobile devices turn to the app for just about all their e-shopping needs. With bank cards linked to their apps, WeChat users can make quick online purchases by scanning quick response (QR) codes (those squares of splotchy black and white markings), track deliveries, review products and services, and tell their friends how it all went.

Users of mobile devices will never be far from WeChat either, it seems. More than 20,000 other apps have a link to WeChat.

However, the lynchpin of WeChat's e-commerce aspirations is its payment service. On August 5, it launched an updated version of its payment service, which is embedded in the app.

Many e-commerce experts say the launch of the payment service is a key step for Tencent to tap into the industry, not to mention challenge the sector's undisputed leader, Alibaba Group.

The operator of two popular shopping websites (Taobao and Tmall) and the online payment service Alipay, the country's version of PayPal, has taken note. Alibaba has started to switch its focus from standard computers to mobile devices.

The company recently announced that money transfers on its Aplipay app would be free but those on traditional computers would be charged a fee. Analysts interpret the move as the company urging its users to use mobile devices more.

Alibaba has also launched its own mobile messaging apps, Laiwang and Weitao, to compete with WeChat.

If executives at WeChat are worried they roused a sleeping giant, they are not letting on. Zhang Ying, deputy general manager of WeChat's product department, said the app needs to continue to connect to as many sectors as it can so it can reap the benefits of new ideas.

"We are happy to see innovation," he said. "It will diversify WeChat's platform."

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