RESHAPING THE GIFT-GIVING CULTURE
China’s e-commerce market is the largest in the world, generating billions in revenue and outpacing the United States.
Giving money and gifts is a huge part of Chinese culture and in 2014, WeChat introduced virtual red packets linked to its digital payment service.
The virtual red packets were a hit with users who received amounts of money in the form of transactions quickly and conveniently through their apps, and digitised a deeply-rooted Chinese tradition ahead of the new year.
It also gave Tencent the edge in the digital payment battle against e-commerce rival Alibaba’s Alipay system, industry experts said.
In 2017 alone, WeChat users exchanged around 46 billion digital red packets over the new year period in January.
Just as WeChat changed the way people gave out traditional red packets, can it do the same with its new “gift-giving” feature?
“Gifting is something deeply rooted in Chinese culture, just like red packets are,” said Li Jianggan, CEO of Singapore-based venture firm Momentum Works, adding that spending habits and gifting behaviour of younger Chinese differed substantially from elders.
Analyst Dave Xie from the Oliver Wyman global management consulting firm, called the new feature “a strategic move” on Tencent’s part.
“China’s e-commerce landscape has undergone significant transformations in recent years, driven by emerging platforms, evolving consumer behaviors and strategic adaptations by established players,” Xie told CNA.
WeChat’s “extensive” user base and established social connections could provide a unique advantage in driving e-commerce engagement, he added.
With more than 1.3 billion active monthly users, WeChat is a “powerful tool” and has something “none of the Chinese e-commerce platforms have”, Li said, a huge user network and trusted social map.
“As WeChat gradually gets deeper into social commerce and live commerce, there is a good possibility that the e-commerce competitive landscape (in China) will be reshaped.”
But it is still “hard to predict” if the new gift-giving function will be as popular and widely used among WeChat users as digital red packets, Li said, adding that it was “safe to assume” it would have a smaller use as compared to payment.
“That said, we believe that gifting is just one of the many attempts to effectively embed social commerce into the WeChat ecosystem.”
Source: CNA
