WeChat calls beat tele­com com­pa­nies

App’s run­away suc­cess fur­ther squeezes mar­gins of op­er­a­tors as they worry about fall in rev­enue

China Daily (Hong Kong) - - BUSINESS - By HE WEI in Shang­hai hewei@chi­nadaily.com.cn

WeChat has eclipsed tele­com car­ri­ers to be­come the new dar­ling for Chi­nese peo­ple to make calls, a study has found.

The 768 mil­lion ac­tive WeChat users — more than dou­ble the en­tire pop­u­la­tion of the United States — made over 100 mil­lion voice and video calls ev­ery­day via the app in 2016, its de­vel­oper Ten­cent Group Hold­ings Ltd said in a re­port on Wed­nes­day.

With the ad­vent of the faster 4G net­work and wire­less con­nec­tions, the fig­ure was 1.8 times that of last year, the re­port found. A typ­i­cal WeChat user — de­fined by Ten­cent as in his or her 20s and 30s — spent on av­er­age 65 min­utes per month on WeChat-en­abled calls.

That fur­ther squeezed mar­gins for tele­com op­er­a­tors as they worry about a dent in their rev­enue from over-thetop ser­vice providers, the study said.

The coun­try’s big­gest car­rier, China Mo­bile Com­mu­nica- tions Corp by rev­enue, for ex­am­ple, saw its rev­enue from voice ser­vices fall 16.5 per­cent year-on-year in 2015.

The re­port found that half of ac­tive WeChat users linger on the app for longer than 90 min­utes on a daily ba­sis. A typ­i­cal user sent out 74 mes­sages, up 67 per­cent from last year, con­trast­ing with a dou­ble-digit per­cent drop in short mes­sage ser­vice rev­enue for the likes of China Mo­bile.

Ten­cent’s all-pur­pose app en­cap­su­lates the func­tions of Face­book, Uber and PayPal, in­creas­ingly mak­ing it an in­sep­a­ra­ble part of China’s rising mid­dle class. New fea­tures from dig­i­tal ads to dig­i­tal wal­let are also help­ing Ten­cent win new bat­tle­grounds be­yond its tra­di­tional strong­hold, the study found.

For in­stance, typ­i­cal users spend 580 yuan ($83.4) per month on dis­tribut­ing red pack­ets, a play on the red en­velopes tra­di­tion­ally used to give gifts of money dur­ing fes­ti­vals in China. By do­ing so, Ten­cent is in­tent on cul­ti­vat- ing cus­tomer habits to use WeChat as a pay­ment chan­nel and a gate­way to other busi­ness sce­nar­ios it hopes to cap­i­tal­ize on.

The re­port also found that China’s elderly peo­ple, aged 55 or older, have be­come the big­gest ben­e­fi­cia­ries of the app. Many leapt from the pre-web era straight to the mo­bile in­ter­net, skip­ping the per­sonal com­puter al­to­gether.

Data showed they spent 17 more min­utes ev­ery month in au­dio and video chats than their younger peers, and out­per­formed them in WeChat Sports, a fit­ness track­ing func­tion that al­lows mo­tion track­ing to share the num­ber of steps users take each day.

WeChat has be­come a life style in China, as half of its users open it more than 10 times per day, ac­cord­ing to Li Chun­yan, founder of Feida Con­sult­ing.

WeChat cre­ator Zhang Xiao­long said it was set to rev­o­lu­tion­ize the app in­dus­try by in­tro­duc­ing “mini-apps” which are apps that do not re­quire in­stal­la­tion.

“This will boost the ease of use and re­li­a­bil­ity of the app, with­out it be­com­ing in­con­ve­nient in terms of stor­age space and clut­ter for the user,” said Zhang dur­ing a re­cent de­vel­op­ers’ event in Guangzhou.

The mini apps will not be ac­cessed from WeChat, but most likely through scan­ning quick re­sponse or QR codes.

the num­ber of ac­tive WeChat users world­wide

DENG YINMING / FOR CHINA DAILY

A woman makes a phone call in front of a WeChat QR code poster in Taiyuan, Shanxi prov­ince.

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