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Live from RISE Hong Kong—WeChat’s global expansion through outbound tourism

By Rita Liao

china outbound tourism

Tencent’s social app WeChat has been known for occupying every touchpoint of a Chinese person’s normal life, and now it is extending its reach to China’s 135 million outbound tourists.

“It’s all about improving the customer use case,” Stephen Wang told TechNode at RISE Conference in Hong Kong; Stephen manages both the International Operations team and Data Analytics team for WeChat’s Core Product Group. “There is an issue of converting money into cash when they go overseas. A lot of consumers don’t feel that carrying a lot of cash is very safe. Another issue is that it’s very difficult to convert that currency back. Also, card-based transactions are actually not common inside mainland China. Mobile payment has become a dominant way for people to pay at the counter.” Research shows that the majority of Chinese traveling overseas prefer to pay with Alipay and WeChat Pay, while a little over 10% opt for cash and credit cards.

On July 3rd, Tencent held its WeChat Pay Overseas Open Conference in Tokyo and launched an open platform for foreign businesses. Tensions aside, Japan remains the top outbound destination for mainland Chinese travelers outside of the Greater China region, followed by the US, Thailand, South Korea and Australia. Businesses and financial institutions can now enroll online to join WeChat Pay. On the consumer end, Chinese outbound tourists can now pay by RMB directly via WeChat Pay and merchants receive the payment in ten different local currencies.

May 2017 Mainland China WeChat Users to Destinations Outside of Greater China, presented by Stephen Wang at RISE Hong Kong 2017.

By 2016, WeChat Pay accumulated over 600 million (in Chinese) monthly active users, followed by Alipay’s 450 million (in Chinese). Already available in 15 countries and regions in 12 currencies, WeChat continues to improve its cross-border payment service by forming partnerships. This week, WeChat Pay filed for a license in Malaysia to offer payment services in local currency, and will be partnering with Wirecard, a major German payment service provider, to offer WeChat Pay to retailers in Europe. Silicon Valley startup Stripe also revealed on Monday a partnership with WeChat Pay as well as Alipay, which will allow businesses in the 25 countries where Stripe operates to accept payments from Chinese consumers.

WeChat is also introducing Social Ads and Mini Programs to international businesses, which will allow merchants such as DFS (duty-free stores) to narrowly target users via Moments feed and Official Account. “You can pre-order items on mini program without waiting for 25 minutes in line at DFS. So social ads for awareness and acquisition, and mini program for connecting online services to the actual pickup of the items you’ve ordered,” Wang says.

As WeChat became ubiquitous among Chinese people, its initial plan to advertise and invest in acquiring international users “has sort of come to an end,” as Tencent president Martin Lau described it. Nevertheless, Chinese outbound tourists are presenting a lucrative enough market: in 2016, they spent a total of $261 billion, more than doubling their American counterparts, according to a report by the Nations World Tourism Organization (UNWTO).

“The way we approach the topic of growing our users is really taking a look at who are currently active engaged users, and who are the kinds of people, services and businesses they want to connect to,” Wang says when asked to comment on WeChat’s halt in global expansion. “Increasingly we see more and more links being created between our primarily Chinese base and users and businesses outside of mainland China.”

Source:: Live from RISE Hong Kong—WeChat’s global expansion through outbound tourism

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