Culture + Government: What WeChat needed to successfully bridge social with eCommerce that the US doesn’t have

Even as the stars aligned for WeChat to dominate a social and eCommerce integrated experience, WeChat has had two more factors that helped it build its empire: the Chinese concept of money as a social item, and the unique relationship of government and corporations with the Chinese people.

Adopting WeChat Wallet: Money is social

After seeing the incredible growth of cashless options, eCommerce, and online shopping in the West, China’s tech industry knew that the country was ripe for creating the infrastructure and experience that put all of these together. Without the strong, preexisting banks and credit card systems of the West, whoever could get all of China on board in unified system would take it all.

But how could Tencent make the push for their vision of China’s new mobile, online payment platform?

They took their chances with the platform that had already gathered people, companies, brands, and continued to expand as all of China took to the Internet: WeChat.

So how could Tencent incorporate a digital wallet into their primarily messaging and social platform? The answer was digital red envelopes or red packets.

Red packets, or hong bao, have a long and well-established tradition within China (along with many other East Asian and Southeast Asian countries). These ornately decorated red packets with gold embroidered characters representing wealth and fortune are monetary gifts to celebrate a holiday, weddings, or other social and family gatherings.

A year after the introduction of WeChat Wallet in 2014, WeChat helped celebrate the Chinese New Year by debuting WeChat red packets in a partnership with the Chinese Central Television Channel’s (CCTV) New Year’s Celebration, watched by an estimated 700 million people.

700 million people.

During the show, viewers with WeChat installed were prompted to shake their phones during breaks to win over $80 million (USD) in red packets. In one night, over 20 million users shook their phones over 11 billion times. In order to receive any gift money, users must have registered with WeChat Wallet.

Over this one six day holiday, the number of users using WeChat Wallet more than tripled from 30 million to 100 million, and over 20 million red packets were sent.

And in just 3 years, Chinese New Years celebrations were filled with the crackling smoke of even more digital red packets in the air.

“More than 420 million WeChat users sent a total of 32 billion red envelopes — a tenfold percent increase from 2015.

Even more, China’s established money giving tradition represents more than just a once a year occurrence. At the end of the day, in China, money is accepted, welcomed, and social communication.

Rather than feeling ashamed of handing over a 20 dollar bill or another Target “I don’t care enough to figure out something you’d like” gift card, in China, straight money exchange, and now digital money exchange, is the norm.

When joining a new group chat or social circle on WeChat, new members are welcomed by small red packets.

During Chinese Valentine’s Day, couples might send 5.20 yuan to each other to signal their love. 5.20, 五二零, wu er ling, wo ai ni, 我爱你。I love you.

China, through its culture and history, has built a unique environment for the melding of word-based messages and the implicit communication passed through money exchange. Through ingenious development strategy, marketing, and leadership that play to Chinese idiosyncrasies, WeChat in 5 short years, was able to transform itself into a mobile payment player that is practically universally accepted, alongside Alipay.

With WeChat Wallet adopted, Tencent merely had to take a short walk to leverage its huge network of digital consumers to expand into eCommerce offerings like JD shopping, WeChat’s online shops, ride sharing, hotel booking, food takeout, and more.

Privacy and regulations: Why China supports super-apps

Even with the opportunity to take and customs playing into the hands of Tencent, an equally important, if not even more important consideration into the rise of super-apps has to be how the Chinese government, and in turn, the Chinese people examine these growing tech and app ecosystems. With the Western world turning to heavier privacy protection policies, the United States’ antitrust apparatus preparing to do battle against Big Tech, and growing skepticism from the public in the West, where does China fall within all of these lines?

At the end of the day, they don’t.

In the US, privacy has its roots in the very founding of the nation itself.

“If you want to talk about privacy, what would be less private than having a platoon of Redcoats living in your house, eating your food, listening to your conversations?” says Neil Richards, a law professor at Washington University in St. Louis.

“In the Constitution itself — the quartering of soldiers, the execution of general warrants — all have to do with the privacy”

The formation of the US government was done precisely in opposition of an oppressive government. The people are fundamentally opposed to the government. We maintain the right to: assemble, have free press, oppose quartering, protect against unreasonable searches and seizures, maintain “a well regulated Militia, being necessary to the security of a free State…”, [and] “…keep and bear Arms.” This opposition is fundamental in the system of checks and balances.

Privacy is in the blood of the United States

With privacy and oversight in the blood of the US, recently tightened data privacy requirements in the EU, and Cambridge Analytica just behind us, people are more and more reluctant to take part in all encompassing data collection. Imagine not only having your location, friends, conversations, and interests gathered, but also those in tandem with your shopping habits, your banking information, your travel plans, food preferences, work life, and traffic violations.

In fact, China is experimenting with an all encompassing citizen identification system, the Society (Social) Credit System that is intended to be rolled out by 2020.

This concept of privacy and that only the parties directly and voluntarily involved should have access to related informations heavily leans into the individual app culture in the US and in the West. However, on the other hand, privacy with regards to the government and similarly tech companies, have a much different history in China.

Even today, much of governance has its roots in traditional Confucianism. In Confucian society, the state had its model in the family. There was an intrinsically intimate and overseeing role for the state to lead in educating and transforming the people. In modern society, the Chinese term for state is “guo jia” or “nation-family”, “suggesting the survival of the idea of this paternal and consensual relationship.

Rather than being inherently opposed against the state, the Chinese people accept the government as much a part of the home as any family member.

This concept transforms the idea of privacy in Chinese government. Data collection and usage are the government’s, in tandem with tech companies’, efforts to educate, protect, and promote the long term success of the nation. Even as some citizens are voicing their maturing understanding of Western data privacy concerns, can eras of history and decades of government censorship be that easily overturned? For the regular Chinese citizen, data collection still exists as:

If I do no wrong, no problem.

Then taking a look at super-apps with this concept in mind, I, too, would be happy to sacrifice privacy for convenience.

Another topic worth noting is China’s antitrust practices. Are there concerns with growing monopolies and a few absolute tech behemoths in the arena? Historically, Chinese antitrust laws have typically been put in place to limit the influence foreign multinationals can have domestically rather than to promote a more competitive marketplace. With Chinese big tech’s close ties to the government (as highlighted in CCTV’s CNY WeChat Wallet promotion), the Chinese government is more likely to continue to support and in turn, maintain influence, on the companies that have lifted China from the ignominy of a cheap labor nation to the leading visionaries of what cutting edge technology can be.

What tech should look like, and what it’s relationship should be with its constituents are being defined right now in China. With influences from the Confucius state, and the huge ambitions China has to reclaim its former glory in its “Chinese Dream”, super-apps are creating an experience bigger and more all-encompassing than ever seen before.

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