Is WhatsApp Copying WeChat with its New E-Wallet?

Once again, China is exporting its digital innovation abroad. Zuckerberg announced WhatsApp will integrate e-commerce features and a payment system soon. But what seems big news for Western consumers, it’s an established reality in the PRC

Today, Western giants seem not to bring anything new in the technological scene. Innovative companies like Facebook are now rather left to strive to keep pace with China instead of providing original solutions.

The People’s Republic is actually influencing many international digital trends and every time foreign tech companies announce a new feature in their platform, it is often something customers are already accustomed to in the Eastern part of the globe.

The last example is Facebook’s founder Zack Zuckerberg announcing WhatsApp’s shift from just a messaging app into a comprehensive e-wallet at last F8 Conference. But this is just the last attempt to achieve what WeChat has accomplished globally, an all-inclusive platform able to dominate social media, the e-commerce sector, and even the fintech market.

Whatsapp is copying wechat - facebook - cifnews

© Unsplash. Mark Zuckerberg recently announced he is expanding Facebook’s business model away from just advertising to a functioning e-commerce model.

In recent years, the signs of China influencing the global trends were many. It all started with live-streaming, which is having increasing success in the Western world but that is already affirmed and continuously setting new models in China.

In 2015, Twitter acquired Periscope – a broadcasting platform – hoping to invest in the newest form of communication. However, in late 2016, over 200 mobile apps in the PRC already had live-streaming features and their success was all about to explode. In that same year, Facebook launched its live-streaming feature and Periscope just fell into oblivion.

Since then, many Western apps like Instagram updated their services to respond to users’ emerging need for real-time content but in no other place like China, it actually changed the whole social network experience. Here, apps like Yizhibohave turned live-streaming into Chinese millennials’ new favorite format. Something, foreign companies are far from reaching.

However, it is in the e-commerce field that the Dragon is actually influencing the global market. With the rapid penetration of smartphones into our lives, among all the aspects of daily activities that have changed dramatically, the one that changed the most is how people do and conceive purchases. And China is leading the transformation.

The Chinese new way of doing online shopping can no longer be defined as e-commerce. Today we talk about social-commerce or conversational commerce, a “hybrid” that comes from the combination of social networks, messaging applications, and shopping platforms.

In this emerging landscape, Tencent and Alibaba are the Chinese tech giants contributing the most to the development of the market. Tencent’s WeChat represents the number one social-commerce but Alibaba’s Taobao has surely contributed to the consolidation of online shopping.

Even during the Single Day, China’s biggest sales event, the e-commerce giant Alibaba live-streamed a fashion show called “See now, Buy now”. The show was broadcasted live on 10 platforms including Taobao, giving to millions of consumers the opportunity to buy products on the spot, therefore contributing to the establishment of a new “live-shopping” trend in the country.

Trying to follow these new trends, in 2017, Facebook introduced its Marketplace, a real shopping platform perfectly integrated into the app where ads relate to the user’s interests and with its own internal search engine.

However, while Zuckerberg’s experiment is experiencing many ups and downs, Instagram is following the same path. Last, year, the image-propelled social network introduced the possibility for brands to tag their pictures with special tags that allow the user to buy the product. It quickly switched from a simple catalog of images for potential customers to a trusted store.

Whatsapp is copying Wechat - alibaba - cifnews

© Alizila. During last Alibaba’s Single Day, the “See Now, Buy Now” fashion show let viewers make real-time purchases of any items on the runway from their mobile phones.

But while Western internet companies were trying to cope with new customers’ behaviors from the East, the Middle Kingdom was already two years ahead, changing the whole payment industry in both the online and the offline world.

Thanks to Jack Ma’s vision of the New Retail, the act of purchasing online is now intertwined with the offline experience and the act of paying is the bridge between the two worlds.

Alibaba and Tencent have both entered the fintech industry with great success. AliPay and WeChat Pay are the most used payment apps in China, where the population recently turned into a “cashless society“, but they are both expanding even beyond Chinese boundaries.

Today, all across the big Asian country, up to 90% of all commercial and retail transactions in convenience stores and cafes are now occurring through AliPay and WeChat. Both giants are global fintech forefront and Hema‘s cashless store, supported by Alibaba, now represents the future of New Retail.

From Urumqi to Shenzhen, from Harbin to Canton, up to 90% of all commercial and retail transactions in convenience stores and cafes are occurring through AliPay and WeChat.

Before Zuckerberg’s announcement to turn WhatsApp into a payment platform, he already tried to open Facebook to digital payment already three years ago. However, due to a lack of trust in the social network’s user data security, the process is getting slow. Therefore, after years of weak achievements, Zack Zuckerberg now turns to WhatsApp, the messaging app Facebook purchased for $19 billion in 2014.

Mark Zuckerberg gave a keynote presentation at the F8 Conference where he revealed that WhatsApp is moving toward hosting web shops where customers can browse a store’s products and make purchases. He is actually expanding Facebook’s business model away from just advertising to a functioning e-commerce model.

It will be an expansion of the WhatsApp Business app with a feature called Product Catalogs, which aims to replicate WeChat’s communication-based ecosystem where retailers meet the customer by creating a relationship based on trust that is very different from that built by classic e-commerce companies.

According to Zuckerberg, the next step is allowing WhatsApp to manage payments within Product Catalogs’ stores. The new payment service will also allow people to send money to each other.

Whatsapp is copying wechat - fintech - cifnews

© Xuehua. While mobile payment seems big news for Western consumers, it is actually an established reality in China for some time now.

The American internet colossus Google also has a three-years-history in the mobile payment system. But what was born as Android Pay and Google Wallet have finally merged into Google Pay just last year.

Western social networks have thus finally entered in the new era. But, what is new for us is not new for China, where trends such as social e-commerce or fintech are already an established reality in Chinese people’s daily lives.

After years of Western technological leadership, especially American, it is now Chinese digital innovations to export technological trends to the rest of the world. PRC is actually leading fintech sector and e-commerce, including cashless payments.

As we see, it is now time for China to export its digital innovations. And to the question of whether international internet companies are copying Chinese trends, the answer is yes. Since both Facebook and Instagram introduced e-commerce features and now even worldwide leaders like Google are trying to include fintech in their services, it really looks like it.

China today is definitely the forerunner of changing the buyer’s habits towards online shopping. The Dragon turned out to be not only a model for its growing technology but it also exports its digital innovation and its New Retail concept together with its uniqueness that combines cosmopolitan modernization and nationalism. Something that fascinates even the world’s largest digital titans.

Chinese new digital model is already ten years ahead of other nations and it is experiencing a high imitation rate, even if foreign attempts come slowly and have less social impact. Let’s see what will happen with the introduction of payment features in the WhatsApp platform. Will it handle the competition?

Categories: China, Online Payment

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