Ap­ple ac­cepts WeChat Pay to halt sales drop

China Daily European Weekly - - Business - By HE WEI hewei@chi­nadaily.com.cn Ma Si in Bei­jing contributed to this story.

Ap­ple Inc an­nounced on Aug 29 that its iconic app store and mu­sic-stream­ing ser­vice Ap­ple Mu­sic now ac­cepts WeChat Pay in China, a clear sign of eas­ing ten­sions with in­ter­net gi­ant Ten­cent Hold­ings Ltd amid an in-app pur­chas­ing spat.

Ex­perts say Ap­ple had lit­tle choice but to rec­on­cile with Ten­cent, a bell­wether of the mo­bile in­dus­try and a dom­i­nant so­cial me­dia force in China, as it tries to sal­vage fall­ing sales and re­tain users in the world’s largest con­sumer mar­ket.

In a state­ment, Ap­ple said it is “ex­cited” that Chi­nese cus­tomers can now use WeChat Pay to pur­chase apps or sub­scribe to Ap­ple Mu­sic, and will con­tinue to of­fer pay­ment op­tions that are sim­ple and con­ve­nient.

The in­clu­sion of Ten­cent-backed WeChat as a pay­ment op­tion fills the void of hav­ing China’s sec­ond-largest mo­bile wal­let on board when 963 mil­lion WeChat users be­come ac­cus­tomed to mak­ing pur­chases via the all-in-one app.

App store, which houses a num­ber of mo­bile ap­pli­ca­tions from gam­ing to en­ter­tain­ment to din­ing for the iOS sys­tem, is a main gate­way for the US tech gi­ant to earn fees from iPhone users. It pre­vi­ously sup­ported credit card trans­ac­tions, Ap­ple Pay, China’s UnionPay and Ali­pay, which is WeChat Pay’s big­gest ri­val.

The Chi­nese main­land has been a crit­i­cal bat­tle­field for Ap­ple’s app store. As of June, the re­gion gen­er­ated nearly one-third of the app store’s world­wide rev­enue, ac­cord­ing to App An­nie, a com­pany that tracks met­rics for apps.

With peo­ple await­ing the new iPhone line­ups and Chi­nese brands el­bow­ing into the premium phone mar­ket, Ap­ple is in dire need of al­ter­na­tive rev­enue streams to make up for the sales slump, and that means dou­bling down on soft­ware, says Li Chao, se­nior an­a­lyst at iRe­search.

“Ap­ple has noth­ing to lose to in­clude a pay­ment method that is fa­mil­iar to the Chi­nese. It can even boost sales in the short term,” he says.

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