A missed opportunity: WeChat

Source: marketingtochina.com

"Ignorance is bliss” seems to dictate the outlook of many Australian businesses that for too long have neglected customers and ignored marketing and promotional platforms in the world’s second-largest economy – China. As Australian companies slowly become aware of the need to establish themselves in the Chinese market and avoid losing customers to their more internationally-minded competitors, why haven’t social media opportunities such as WeChat been taken up more broadly by industry?

What is WeChat?

WeChat is the super-app of China, a one-stop shop for everyday needs that most resembles a mobile personal concierge service. WeChat’s main competitive advantage lies in its enormous functionality: it is a messaging platform like WhatsApp, a social information sharing platform like Facebook, a marketplace like Amazon, a trading app like eBay, and a taxi ordering service like Uber. In China alone, WeChat has a staggering 700 million users and growing.

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Apart from its incredibly diverse functionality, WeChat’s best feature is that customers can pay for all these services through an in-built payment platform that doubles as an electronic wallet. Recently, WeChat has expanded its service by allowing users to make payments in international currency when using the app outside of China.

This recent initiative is part of a strategic play by WeChat to broaden its international presence. Compared to 700 million users within China, WeChat has only 100 million users outside of China. This may be partially attributed to WeChat’s reduced functionality outside of China, with platforms in the UK, US and Australia not including some of WeChat’s most popular features. Furthermore, in most Western economies WeChat must compete with established social media platforms such as Facebook, WhatsApp, Twitter and Instagram, the majority of which are banned from the Chinese market, for which WeChat was specifically developed for. Nevertheless, any future removal of these limitations will expose WeChat to unfathomable market opportunities.

Chinese consumers and the opportunities for Australian businesses

Chinese consumers represent an enormous market opportunity for Australian businesses. As Chinese consumers become more affluent, their belief in the superiority of foreign goods, due in part to higher production quality and stronger consumer protection laws, has driven unprecedented appetite for high-quality Australian, American and European products.

Chinese millennials, in particular, are a uniquely placed consumer group. The former One-Child Policy has left many single-child generations with an abundance of wealth as the sole heir to their family’s inheritance. Furthermore, millennial Chinese consumers are very digitally engaged, and gaining the brand loyalty of this growing demographic is generally cheaper and more durable than attracting new customers. This makes WeChat a perfect platform for global brands to reach this wealthy and disproportionately loyal consumer group.

Some Australian companies, including real estate agents and Australian cosmetic and health food brands such as Bellamy’s Organic, a2 Milk and Capilano Honey, have recognised this opportunity and launched campaigns to promote their products through WeChat. However, these products are usually promoted in a completely different way to normal social media advertising. Agents called “daigou” are used as the middleman, earning hefty commissions by promoting and selling Australian goods in China via platforms including WeChat. The ability of “daigou” to thrive is partially due to the lack of effort by many Australian businesses to woo Chinese consumers, and Chinese customers have no issue paying the markup to access high-quality Australian products.

Source: Wikipedia.org

To use WeChat effectively, Australian businesses should maintain a healthy online presence on the platform and dedicate adequate resources to supporting two-way conversations with users as well as conduct sales transactions. Australian businesses must be mindful of the commercial and cultural nuances of selling goods to Chinese consumers on social media via a third-party “daigou”, which can be ruinous if not conducted sensitively but can set the business apart from its competitors if navigated successfully.

Universities are also beginning to appreciate the marketing opportunities presented by WeChat. With education being one of Australia’s largest exports, Australian universities were amongst the first to establish a virtual presence in WeChat, allowing universities to connect and engage with a large number of prospective students. The University of Sydney and the University of Sydney Union have both integrated WeChat into its student programs, resulting in a significant rise in international student engagement. This style of outreach builds faith among students that universities care about their needs and that representative student bodies are willing to engage with them through social media platforms familiar to them. These students, in turn, become advocates for Australian universities when they advise their friends, relatives and colleagues about where to pursue higher education.

Opportunity or necessity?

The benefits of using WeChat are limited only by the extent of the business’s dedication. The direct benefits of a robust marketing presence on WeChat are the market size and conversion rate of users. Increased customer engagement will drive greater customers and stronger revenue growth, whilst maximising name recognition amongst Chinese consumers, who clearly see that overseas companies value them as individuals. Sensitivity to cultural marketing strategies will help companies to bolster their image, foster customer loyalty and strengthen long-term retention.

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With WeChat providing Australian businesses vast opportunities to tap into the Chinese market, Australian businesses ignoring WeChat are losing potential customers to international competitors. Now is the time for businesses to act before they get squeezed out of an increasingly competitive market. Australian firms need to manoeuvre quickly and adopt strategies that can help them place a strong foothold on this platform.