On a hot summer’s day last year, ’90s boy band Backstreet Boys took to a stage in Pennsylvania and hit an audience of 44 million thousands of miles away for an online concert organized by China’s WeChat channels.
The show is one of the many programs organized by WeChat Owner Tencent to promote the app’s short-video platform – described by the tech giant’s founder Pony Ma as “the company’s hope”.
Tencent Holdings Ltd. has also tapped other entertainers like Taiwan’s Jay Chou and Irish boy band Westlife for livestreamed concerts and has set up a team to build a community of content creators, according to a source, as it looks to Wants to challenge dominance. bytedanceOwnership TIC Toc and Douyin, and Kuaishou in the short-video business.
“Tencent hopes it can turn the channel into the next WeChat Pay. It has a shot. But it’s also going to be difficult,” said Liao Juhua, a senior analyst at research firm Analysys.
WeChat Pay became the second largest player in China’s mobile payments market within a year of its 2013 launch, after Alipay owned by the Jack Ma-founded Ant Group.
Two sources familiar with Tencent said the channel’s importance has been repeatedly pointed out within the company.
The two-year-old platform has been a bright spot for Tencent in 2022, when revenue for its other products, such as games and payment services, was slammed by tighter gaming regulations and stricter regulations. COVID-19 hook.
The total number of views on the channels more than tripled last year, Tencent said this week as it revealed its latest growth figures for the platform.
Daily active creators and video uploads have more than doubled.
The company said that gross merchandise value (GMV) from livestreaming e-commerce, where telegenic celebrities sell goods online in real time, increased by over 800 per cent across channels.
It did not disclose the full figures.
A report by Latepost says that the channel’s daily transactions from livestreamed sales pitches reached more than CNY100 million ($15 million, or roughly Rs. 122 crores) in September 2022 for the first time, amounting to nearly CNY36 billion (about Rs. 43,000 crores). indicates the annual rate of Rs. ,
But Douyin was already aiming to bring its GMV to more than 1 trillion yuan ($155 billion, or about Rs 12 lakh crore) in 2021, more than six times the 2020 level, sources said at the time. . ByteDance does not publicly disclose official GMV numbers.
integrate products
Tencent is integrating several of its products, from Tencent Meetings to WeChat mini programs, with channels to help creators livestream content, like US band Backstreet Boys.
Tencent Meetings is a teleconference service like Zoom, while mini programs are like apps of apple iOS And Google’s Android operating system but less data intensive and runs within WeChat.
One integration would allow, for example, a podcast host to conduct an interview on Meetings and livestream it across channels. If the host recommends a product during the chat, a link may pop up on the screen to take viewers to a mini program where they can purchase the product using WeChat Pay.
Tencent has also lowered the threshold for monetization on channels, allowing users with as few as 10 followers under 1,000 to start earning money through ads.
TikTok requires content creators to have more than 10,000 followers to start monetizing.
Li Yikai, general manager of Americas and EMEA at advertising agency Netivex vs WeChat, said the channels have opened up advertising opportunities like “never before”, pushing a few ads a day.
“When you’re already scrolling and see an ad, you don’t think twice about it. So naturally you see a lot more ads with shorter videos,” Lee said.
In November, Tencent chairman Martin Lau said that the channel’s advertising revenue is on track to reach 1 billion yuan in the fourth quarter of 2022.
Research firm Insider Intelligence estimated in April last year that advertising revenue for TikTok and Douyin together would reach over $30 billion (roughly Rs. 2.4 lakh crore) by 2022.
The channels have also started charging 1 per cent to 5 per cent commission from e-commerce merchants from this month.
Douyin is charging 1 percent to 10 percent from 2020.
against
While some analysts see the channel as Tencent’s best chance to catch up with ByteDance, others believe it will find it difficult to become as big as Douyin, the Chinese version of TikTok.
“When you have to start with a social network app and then get into the short-video space, you have to build an entire e-commerce system to support it… I wouldn’t say they can’t get there. But it’s very difficult,” Liao said.
But Shawn Yang, managing director at research group Blue Lotus Capital Advisors, is bullish on channels given WeChat’s traffic potential.
WeChat is the most popular chat app in China with over a billion active users.
“For example, in Douyin or Kuaishou, you won’t be able to ask your viewers to add you on WeChat. But on Channel, you can quickly add someone on WeChat,” Yang said.
“It’s very beneficial for people who already have their own personal traffic on WeChat,” he said.
© Thomson Reuters 2023