A billion users on, WeChat user growth, engagement slowing

After years of frenetic growth, the red-hot pace of WeChat, the Chinese super app, may be cooling.

Other apps like Douyin and Weibo are beginning to provide more value when building brand awareness, according to Totem Media's new 2020 China Marketing Trends report. Data from Tencent shows WeChat’s latest MAUs at 1.15 Billion (Q3 2019). Other sources such as TrustData pin WeChat current MAU at 1.016 Billion (Sep 2019).

While WeChat's numbers were yet a positive for brands surveyed, these gains were made at a steep price, relative to the competition. Other channels such as Douyin, Red and Weibo showed larger gains for brands, but on a smaller base. For marketers, Weibo still ends up looking like the most cost-efficient channel for top-of-funnel social media metrics - awareness, reach and fan count.

The losses that WeChat has seen during the course of daily use in 2019 were most profound during
peak audience entertainment hours; lunchtime and evenings. This implies that the decrease in usage during those hours is a result of other, more entertaining apps stealing attention away from WeChat. Douyin, Kuaishou and a host of other video and entertainment apps have been edging into this space over the past few years.

To try to squeeze more out of their investments, the focus for brands using WeChat has shifted firmly toward Mini-Programs. However, brands will need to fight for the attention of ussrs, who may be distracted by unrelated usage of these programs.

Games drive the highest volume of traffic, followed next by utilities, location based services and media. Big ecommerce players (eg. Pinduoduo) drive the bulk of the GMV. So, while there are important opportunities, brands must compete against other apps and think about how to maintain engagement, within a very busy landscape.

The quandary facing brands: WeChat Mini-Programs have 300 million DAUs, with 60 “MPs” used on average. And, in 2019, ecommerce revenue grew 160% to 800 Billion RMB. Even as WeChat's growth cools overall, brands may be compelled to invest in this offering, given these compelling statistics. 

With these changing trends, brands may see better value in competing offerings such as Weibo, with more reasonable pricing and better access to Tmall. This access allows brands with official shops there to transfer over cost-efficient attention to an ecommerce opportunity.

WeChat has also faced growing pressure from the massive growth of ByteDance's platforms over the last couple of years. The growth of ByteDance has been phenomenal, with its share of spend more than doubling from 2017 to 2018. And from 2018-2019 it nearly doubled again, taking its share from 5% in 2017 to 22% in 2019. While Alibaba and Tencent have set their sights on ecommerce revenues as the primary long-term goal. ByteDance is much more focused on ad revenue and holding audience interest with entertainment, news and content.