The Battle of Titans: WeChat’s Channels Eying E-Commerce Supremacy over Douyin and Kuaishou

 

Source from 搜狐

In the rapidly evolving landscape of digital commerce, Tencent’s WeChat is positioning itself to capture the attention of hundreds of millions of viewers on its short-video platform Channels, striving to outpace ByteDance’s Douyin in the race for sales and profits. The WeChat super app, boasting nearly 1.3 billion users worldwide, is shifting gears to drive more traffic and incentivise merchants to shop on its platform, thus creating a new revenue stream.

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As the most impressive business in WeChat’s portfolio, Channels has the full support of Tencent’s CEO, Pony Ma, who envisions building a complete e-commerce ecosystem. This move comes as rivals Douyin and Kuaishou Technology pivot their video-sharing and live-streaming businesses towards e-commerce, directly challenging online retail giants Alibaba Group and JD.com.

With 813 million daily active users as of June 2022, Channels have already surpassed Douyin’s 680 million users and Kuaishou’s 390 million within three years of its launch. The platform’s rapid growth can be partly attributed to the pandemic-driven live-streaming boom, which has propelled apps like Douyin and Kuaishou to expand into e-commerce and leverage their massive fan bases.

Source from 胖鲸

WeChat has built an extensive network of official accounts operated by businesses, enabling them to link text-based advertisements with videos on Channels to attract shoppers and facilitate sales. As transactions increased, WeChat began collecting 1% to 5% commissions from merchants in late 2022, creating a new revenue stream. The company is also actively inviting more brands to open accounts on Channels and introducing incentive programmes to boost sales.

While Tencent’s executives have consistently emphasised the need to explore new revenue sources by accelerating Channels’ commercialisation, WeChat founder Allen Zhang prefers a more cautious approach. He advocates for gradual business model exploration and adaptation, prioritising steady growth over rapid expansion.

However, Channels face significant challenges in its e-commerce push. Users spend less time on Channels (less than 40 minutes) than Douyin and Kuaishou (almost 2 hours daily). Additionally, Channels lack leading streamers and rely heavily on content redistributed from Douyin and Kuaishou. To effectively compete with its rivals, Channels must carve out a niche in the e-commerce market, offering specific product categories that appeal to shoppers and differentiate itself from other platforms.

In response to the rising threat from WeChat, Douyin has implemented incentives to attract more content creators and encourage them to publish, directly challenging WeChat’s official accounts. WeChat, in turn, has directed more traffic towards business accounts to reclaim its user base. The battle between these digital titans promises to redefine the landscape of e-commerce in China, and the winner will likely be determined by their ability to adapt, innovate, and cater to the evolving preferences of their users.

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