WeChat Impact Report 2016

WECHAT

IMPACT REPORT

2016

Translated from Tencent Penguin Intelligence and China Academy of Information and Communications Technology (CAICT), “2016 WeChat Impact Report,” March 21, 2016

Translated Presentation by

WALKTHECHAT

March 2016

Disclaimer

Data source:Data of this report is from Tencent Penguin Intelligence’s online survey and China Academy of Information and Communications Technology (CAICT)’s phone survey. Sample group includes 40,443 participants online and 1,101 participants on the phone.

Data accuracy:Phone interview is done on a random basis, with an accuracy rate of 95%. Online survey is sampled based on user’s gender, and industry.

Statement:This report represents Tencent Penguin Intelligence and China Academy of Information and Communications Technology (CAICT)’s independent research. It does not represent Tencent officially.

Sample Size

40,443Participants online

Data collected onMarch 2016

1,101Participants by phone

Data collected at the end of 2015

1,017WeChat Official

Account Operators Data collected at the

end of 2015

806Enterprise Account

Operators

Data collected at the end of 2015

Report Highlight

67.5% of WeChat users are male

More than 90% of users use WeChat every day, more than half of which use WeChat more than 1 hour daily

28% of WeChat users have more than 200 WeChat friends, and 61.4% of users check WeChat Moments every time they open WeChat

35.8% of WeChat Read users see increase in reading time; more than 25% of WeChat Sport users saw an increase in their physical activity

WeChat Red Envelop is the most used WeChat payment feature; 76% of users transfer/spend more than 100RMB per month

Report Highlight II Social media became the second largest

news channel, market share is more than computer and TV combined. Largest channel for reading news is mobile News Apps

The top reasons trigger sharing on WeChat are: value (usefulness), interest, and emotional value

62.2% of users use life-style features, the top ones are: mobile top-up, movie tickets purchases, paying for restaurants/tickets

More than 25% of WeChat Official accounts are in the General News category; service industry make about 20% of all official accounts

Among all company’s WeChat account, traditional manufactory industry has the highest number of accounts

WeChat official owner are investing a lot more time and monetary investment into account operation

Table of Content

01

02

03

04

05

06

07

08

WeChat development

WeChat Users

WeChat + social media

WeChat + payment

WeChat + media

WeChat + life-style service

WeChat corporate service

Report team

WECHAT DEVELOPME

NT

01

WeChat Development Review

WeChat launched 2011.1

Add WeChat Moment2012.4

Add WeChat Official Acct2012.7

WeChat payment2013.8

WeChat Enterprise Acct2014.9

WeChat City Service 2014.12

WeChat Moment Ads2015

Original Content2015

190

MO

NTH

LY A

CTIV

E U

SE

RS

(m

illion)

2013.3

4002014.3

5002014.12

6002015.9

In the past 5 years, WeChat has developed from a communication tool to a platform that connects people, services, and businesses.

WeChat at a glance

700 million Monthly Active

Users

10 million WeChat Official Accounts

700,000 WeChat articles are

published per day

200 million users linked WeChat with

Credit Card

560,000 Company Official Account

WeChat City Services launched in 78 cities across

16 provinces

8 billion of WeChat Red Envelopes were sent during Spring

Festival 2016

200,000 businesses accept WeChat

Offline Payment in-store

Source Tencent, data as of 2016.2

Financial Service• WeChat Payment • WeChat bank

E-commerce• JD.COM• Weidian• Cross-border shops

Startups• Open platform• Co-working space

AI• Smart device • AI software

Communication service • WeChat life• Government service

Hardware Manufacture• WeChat hardware

Agriculture• Agriculture customization • Authentic verification system

Business promotion • Smart mall• WeChat credit card

WeChat + other industries

Industry improvement

Innovation Service

Community service

E-commerc

e / financial industry

WECHAT

Transportation • Didi Dache• Ticket service

WECHAT USERS

02

Male vs. Female ratio is 2:1 (default gender is male)

94% of users will login to WeChat daily 55% of users user WeChat more than 1

hour per day 40% of WeChat users work in

corporations

More male WeChat users

67.5%

32.5%

WeChat User Gender Distribution

67.5% of users are male

Last year, the ratio was 1.8:1

Source: WeChat Economics Social Influence Analytical Report, China Academy of Information and Communications Technology (CAICT)

Female

Male

User employment distribution

40.4%

25.3%

14.4%

10.8%

4.8% 2.6% 1.8%

WeChat user employment status

Corporation Freelance Unemployed Government/armyFarmer

Corporate worker count as the largest user group, 40.4%

Stable income group means high purchasing power


94% of users use WeChat daily

61% of WeChat users open WeChat more than 10 times per day. 36% of users open WeChat more than 30 times per day

Frequency of using WeChat has strongly increased from last year.

Number of Times per Day that WeChat Users in China open WeChat, March 2016% of respondents

50+

31-50

11-30

5-10

<5

Never open

Unknown

21%

15%

25%

22%

11%

5%

1%


Mor

e fre

quen

t

Users spend hours using WeChat everyday

32% of users use WeChat for longer than 2 hours

WeChat has high user stickiness

Average amount of time spent on WeChatMarch 2016% of respondents

> 4 hr

2-4 hr

1-2 hr

30 min - 1 hr

10-30 min

<10 min

17%

15%

22%

24%

15%

7%


Long

er ti

me

WECHAT +

SOCIAL

03

28% of users have more than 200 WeChat friends

61.4% of users check WeChat Moments everytime they open WeChat

User’s update about daily life content is the most popular type of content

Pictures and videos are more popular than articles

Number of WeChat friends increased from last year

<50 50-99 100-199 >200

37.3%

22.5%

37.0%

12.2%

21.3%23.6%

27.1% 28.0%

How many WeChat friends do you have?

2014 2015

55.1% of users have more than 100 WeChat friends

Only 16% of users have less than 50 WeChat friends

More than 200 friends category doubled compared with 2014


4.1%

6.4%

6.4%

11.4%

12.6%

25.3%

32.5%

33.9%

39.8%

53.5%

58.0%

Top 10 things people do on WeChat

WeChat Activities Conducted Daily by WeChat Users in China, March 2016% of respondents

Source: Tencent Penguin Intelligence and China Academy of Information and Communications Technology (CAICT)

Browsing and posting on Moments

Sharing information (image, voice messages, video, etc.)

Reading content via followed public accounts

Sending/receiving money (e.g., Red Pocket)

Mobile payments

Sharing Stickers/ emoji

Use “WeChat Shake” feature

Use WeChat sports

Gaming

Social commerce

None of these

Most of users check WeChat Moment every time they open WeChat

How often do you check WeChat Moment? March 2016% of respondents

Everytime I open WeChat

Often

Sometimes

Never

61.4%

22.6%

14.7%

1.3%

Note: sample size 40,443 people, excluding non-WeChat users; Source: Tencent Penguin Intelligence

WeChat users are addicted to checking Moments

Users pay more attention to personal life-style content on Moments

What kind of content do you pay more attention to?March 2016% of respondents

None of above

Articles shared by friends

Friends' feedback on my post

Friends' personal life-style post

7.0%

29.8%

35.3%

61.4%

Articles shared by friends only got 30% of attention mostly due to the larger quantity of content being shared


“Like” is cheaper than re-share

Besides reading articles, what other things do you do on WeChat Moments? % of respondents

None of the above

Share content

Post content

Leave comments

Like other posts

11.8%

23.8%

35.1%

38.5%

57.6%

(videos, pictures &text)

Only 23.8% of users would re-share content on their moments. Marketer needs to be more targeted when creating shareable content.


Pictures and videos are more favorable content on WeChat Moments

What type of content do you like to see on WeChat Moments? % of respondents

None of above

Articles

Short videos

Text

Pictures

3.8%

22.3%

45.2%

50.0%

50.7%

Only 22.3% of users likes to read articles on WeChat Moments


WeChat + Social summary

Brands could consider Moments advertising to catch users’ attention since half of users indicates more favorable of pictures and videos

As the sharply increasing number of WeChat friends, content on WeChat moments, and information posted by official account, Tencent is facing a bigger than ever challenge to filter the information.

WECHAT +

PAYMENT

04

Red envelop is the most used payment features in WeChat payment

67% of users spend more than 100 RMB per month using WeChat payment

Offline payment is faster and easier than traditional payment method

Red envelope is the most popular payment feature

WeChat Mobile Payment Functions Used by WeChat Users in China, March 2016

9.0%

12.8%

13.6%

20.0%

33.1%

56.9%

58.1%

84.7%

Note: *payment processed via scanning a QR code generated by an app Source: Tencent Penguin Intelligence

Digital Red Envelope money

Making Payments

Money transfer to contacts

Receivable

WeChat credit card *

Pay off credit card

Splitting payment with friends (e.g., for restaurant bills)

None of these

% of respondents

Users are starting to use WeChat payment for larger transactions, beyond transferring small payment as red envelopes

Near 70% of users spend more than 100 RMB per month

Unknown

> 5K RMB

2~5K RMB

1~2K RMB

500~1K RMB

300~500 RMB

100~300 RMB

< 100 RMB

2.0%

6.0%

7.0%

8.0%

13.0%

14.0%

19.0%

31.0%

67% of users spend over 100 RMB per month, more than doubled from last year.

34% of users spend over 500 RMB per month, six times more than last year (5%).

Note: excluding non-WeChat psyment users. Source: WeChat Economics Social Influence Analytical Report

Monthly Average Amount That WeChat Users Pay/Transfer

% of respondents

Mor

e m

oney

Main reasons to use WeChat offline payment: ease, convenience, promotions

46.2%

44.9%

39.2%

18.7%

h

Easy to use, no need for changes

Can pay with phone, cashless

Others

Discounts & promotional campaigns

Users choose to use WeChat payment because it is easier, more convenient and occasionally have promotion discount campaign

Note: sample size: 31349, excluding WeChat users with no offline payment experience. Source: Tencent Penguin Intelligence

Why do you choose to use WeChat for offline payment?

% of respondents

WeChat Payment Vs. Conventional Payment: Strong Willingness to Use WeChat Payment

46.4%

37.3%

16.3%

Note: sample size: 31349, excluding WeChat users with no offline payment experience. Source: Tencent Penguin Intelligence

53.6% of customers indicates they would consider paying with WeChat when given the option.

Which payment method do you prefer: WeChat payment or cash/credit card?

% of respondents

Prefer to use WeChat Payment

Either way

More likely to use cash/credit card

Pre

fer C

ash

Pre

fer W

eCha

t Pay

men

t

WeChat + Payment summary

1.WeChat payment penetration has rapidly increased due to popularity of red envelope and growth of mobile payment

2.The amount of spending using WeChat has increased rapidly, and spending has been expanded to in-store experiences

3.The mobile payment trend is likely to move from social purpose (red envelopes) to financial and e-commerce transactions

4.The key for expanding WeChat payment’s market share is through offline and banking systems

WECHAT +

MEDIA

05

Following news and information is the No. 1 reason users follow an official account

Social media is the second largest channel to read news

Top three reasons users share a news article are: valuable, interesting, and emotional attachment

More users read news on social media than TV & Newspaper combined

Through which channel do you read news?

% of respondents

Newspaper

TV

News websites

Social media

Mobile Apps

1.5%

8.0%

20.6%

40.4%

55.4%

Note: sample size 40443, excluding non-WeChat users. Source: Tencent Penguin Intelligence

(WeChat, Weibo, etc.)

In another phone interview “The Top Main Channel for Acquiring News and Information”, WeChat is the number one source for reading news.

The key to increase article re-share is: valuable & interesting

Valuable, interesting and emotionally touching content trigger the most sharing on WeChat Moments

What kind of articles will you share on WeChat?% of respondents

Don't re-share

Other

Incentive & rewards

Niche content

Trendy topic

Emotionally touching

Interesting

Valuable

8.5%

5.9%

7.3%

17.7%

20.0%

38.6%

39.2%

48.8%

Note: sample size 40443, excluding non-WeChat users. Source: WeChat Economics Social Influence Analytical Report; Tencent Penguin Intelligence and China Academy of Information and Communications Technology (CAICT)

Official Accounts become a main channel for acquiring information & news

News and promotions are the two main reasons why people follow WeChat accounts

Main Purposes for Users to Follow a WeChat Public Account% of respondents

74.2%

41.9%

30.9%

24.6%

19.3%

11.9%

5.5%

0.7%

Source: WeChat Economics Social Influence Analytical Report; Tencent Penguin Intelligence and China Academy of Information and Communications Technology (CAICT); Industry and Planning Institute

Acquire information & news

Follow a business and receive promotion information

Access services provided by Official Accounts

Read about politics

Business consulting

Don‘t follow any

Government & public service

Other

WeChat + Media summary

1.WeChat becomes the main channel for news reporting

2.Most people read news through mobile phone, instead of traditional channels like TV and newspaper

3.WeChat ecosystem restructured and decentralized the media industry

4.The focus and format of news reporting is greatly influenced by social networking

WECHAT +

LIFE SERVICE

05

Over 60% of the WeChat users have used WeChat life service, mostly for paying for telephone bills

15% of users have donated through WeChat Charity.

Over 60% of the WeChat users have used WeChat life service

Phone Bills

Movies Tickets

Entertainment

Paying Bills

QQ Money

Lottery

Never Used

47.1%

20.9%

17.4%

14.1%

10.6%

6.5%

37.8%

Types of WeChat Life Service being used

Source: WeChat Economics Social Influence Analytical Report; Tencent Penguin Intelligence and China Academy of Information and Communications Technology (CAICT)

Most users use WeChat Life Service to pay for phone bills. The scope of service are also expanding to entertainment and buying movie tickets.

& food

Sports, Charity, and other services are booming

Official Acct service

WeChat Finance

WeChat Read

WeChat Charity

WeChat Sports

WeChat Coupon

4.9%

5.4%

6.1%

15.0%

15.3%

19.7%

Have you used the following WeChat features?


WeChat is also expanding in other areas including coupons, charities, and sports

Survey indicates WeChat Sports could incentivize users to work out more

10.7%

11.3%

23.2%

26.2%

39.9%

62.5%


Convenient method to get exercise data

Effects of using WeChat Sport

No effect

Increase interactions with friends

Increase exercise frequency

Care more about their health

Make more sports-lover friends

62.5% of the WeChat Sports users think the biggest advantage is that it shows the result of their daily exercise.

In addition, because WeChat Sports enables the ranking feature, 39.9% of the users claim that it helped them increase interactions with their friends; 23.2% of the users focus more on sports health.

WeChat Read: make use of fragmented moments of free time

Make good use of small

pieces of time

Content used for WeChat Moment

Increase reading

Others No effect

49.3%41.8%

35.8%

10.4% 9.0%

Feedbacks from WeChat Read Users(not include non-users)


49.3% of the WeChat Read users think that WeChat Read helps them use fragmented time more efficiently

41.8% of them use content from WeChat Read to post on WeChat Moments

35.8% of the users read more frequently

WeChat + Life Service summary

1.WeChat has moved from a social platform to providing more value added service that affects users’ life

2.The more internet-based that an offline industry is, the more effectively WeChat works for this industry in terms of attracting users.

3.Living in a fast-paced life, people need services like WeChat Read and WeChat Sports to help them use fragmented time more efficiently.

4.Comparing to other industries which are relatively mature, Financial Services + WeChat can work together to make a brighter future.

WECHAT +

CORPORATE

06

72% of Official Account is registered through a business entity

20% of Official Accounts are Service Account Traditional manufacturing industry is with the

No. 1 entity to register WeChat Official Account Significant increase in the investments for

Official Account

72% of Official Account are registered through a business entity

27.30%

72.70%

Culture/Media/Entertainment 27.8%Service 20.6%IT/Communication/Internet 17.2%Commerce 10.1%


Industry of registered entity

Business

Personal

Types of WeChat Official Accounts

Official Account operators are investing more into account operation

<10k 10-100k 100-500k >500k

29%

19%

3% 2%

35%

21%

5%3%

Investment amount for WeChat Official Accounts

2015 2016


Over 64% of the operators invested in their own public accounts; the number was 53% last year

In the meantime, the funds invested in each section all increased comparing to last year

Official Accounts are used for: information sharing, campaigns & customer service

Others

Recruitment

BigData Analytics

After-sales

Client Management

Ecommerce Platform

Consulting Service

Client Interaction

Marketing Campaign

Information Release

9.8%

11.9%

12.2%

12.4%

17.1%

18.2%

21.0%

45.8%

64.1%

84.7%

Main uses of WeChat Public Accounts


84.7% of the operators use public accounts for information release. Marketing Campaign and Client Interaction are also important

As Official Account’s feature evolves, operators are finding more creative ways to use it

Enterprise account: traditional manufacturing ranks #1

Culture,Media&Entertainment

Other

Trade/Architecture

Real Estate

Finance

Government/Non-profit

Service

IT & Communication

Manufacturing

3.5%

8.4%

8.7%

9.3%

9.9%

11.2%

12.9%

16.9%

19.2%

Industry distribution of Enterprise Account


Traditional manufacturing industry is the No. 1 industry to use WeChat Enterprise Account

Only 3.5% of companies in the entertainment industry use Enterprise Account, they prefer to use Official Account

Enterprise account users report internal efficiency enhancement


Others

Enhancement of Service Efficiency

Enhancement of Corporation Efficiency

Simplify Business Process

Lower Communication Cost

System Management/Improvement of IT Technology

Increase internal management efficiency

16.3%

22.8%

34.4%

35.6%

38.2%

46.5%

69.7%

Main Usage and influence of WeChat Enterprise Accounts

70% Enterprise Account users use it to increase efficiency for internal management

Enterprise accounts play an important role for internal communication, operations, services, management, and cooperation.

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