Ever heard of WeChat and WeChat Pay? Whenever we go to a restaurant or shop, we always see a small green logo beside the service and checkout counter. That’s right, the WeChat logo, featuring the popular application that changes the lifestyle of Chinese. WeChat is not just the basic primitive social communication platform, but an inspiring application app that promoted online digital sharing, social media communication, enhanced online payment, public educations. Let’s explore and see how WeChat has led the networking technology and analyze on the transformative impact that has changed the social lifestyle of China.
In this internet ecology analysis, The social networking platform- WeChat will be introduced and analyzed. The analysis will be separated into three main parts. Firstly, an introduction of the historical development and business model of WeChat; Secondly, address the ecosystem and the actors of WeChat, and provide an infographic to relate each actor; Thirdly, analyze the transformative effect in terms of social, cultural, economical, and political.
What is WeChat?
WeChat- The social networking application that is free and user-friendly for everyone to use. First, introducing the most basic function of WeChat-messaging. Comparing with short message services(SMS), WeChat focus on mobile instant messaging (MIM), which is widely used by individuals to achieve better and faster communication. MIM provides user-friendly and convenient features such as voice chat, group chat, video conference, calling, location sharing(Peng,X. & Zhao, Y. & Zhu, Q ,2016). WeChat also bundled with mini programs such as games, user moments and stories and public services. As WeChat has a slogan of “WeChat is a lifestyle”, it has a mission to provide the best social and communication platforms to connect users in a few clicks. This can be seen from the vision of Tencent Company, which focus on promoting technology innovation, cultural vitality, industries digitally upgrade, collaborate for sustainable development of society. WeChat has built the largest online community which combined the communication, commerce, entertainment, information and education. In this era of social digital sharing and communication, WeChat successfully promoted the theory of social media utilization and enhanced social interaction to a next level. (Clavio, G., & Frederick, E.,2014)
The Historical Development of WeChat
In 2011, Tencent Company launched WeChat, (Wei Xin). It was a project at the Tencent Guangzhou Research and Project center, which was founded by Allen Zhang, the Founding Father of Weixin, who is the first generation of internet software developers in China. According to the milestone of Tencent, the users WeChat has exceeded 100 million. According to Li, S., Wang, H., & He, J. (2016), The success of WeChat is closely related to the government policy on the development of e-commerce in China. The Policy of 12th Five-Years Plan rebalance China’s economy to tackle rising inequality and improve social sustainable growth and wealth distribution. As the user population keep increasing, a built in function ‘people nearby’ has launched in 2012 to allow users to match with strangers, solving the problem of long distance and countries. This function is launched to tackle a popular dating application ‘Tinder”, which people can become friends with strangers. This stranger meeting function has a significant impact on human interaction and social-cultures, according to Timmermans, (2017), dating and stranger meeting apps can enhance people’s interaction and more sociable, as well as improving their self confidence by interacting with people of opposite sex. This also allows people to be less shameful when dealing with homosexual problem. The function of scan was launched as well, which allows people to scan QR codes, which allows fast readability and greater storage ability. This function is used to access websites, product tracking, and most importantly, used as the payment method, which changes the Chinese paying method into a newest, advanced era. In 2013, the innovational moment of WeChat appeared when it officially launched the function WeChat Pay.
Business Model Of WeChat
In 2013, According to Wang, J., & Gu, L. (2017), The business model of WeChat has been transformed by the WeChat Pay function. Strategically, WeChat was originally used as a social networking platform that allows interactions and sharing. With the innovation of WeChat Pay, Tencent successfully turned WeChat in to the most essential application that every citizen of China needs. With WeChat Pay, users can just bring their phone to do any banking transections and consumption without bringing a purse or money physically. As users need to bind their banking cards or top-up into their WeChat account, this has significantly impact the consumption style and the economy of China, as well as starting and popularizing mobile e-commerce service (Kendall, K.,2000).
In 2018, Tencent’s WeChat Pay mobile payment services has achieved a milestone of exceeding 1billion total daily transaction volume, and recorded a combined monthly active user of WeChat exceeding 1 billion. This shows the penetration rate of WeChat users and the huge user base has turned into a social phenomenon that WeChat has become the most essential and important application of citizens’ daily lives. According to Plantin,J and de Seta, G.(2019), WeChat has become the history of ICT infrastructure and the development of the internet in China, regarding its early success to its platformization and into infrastructuralization. WeChat business model has successfully promotes Chinese society into sustainable growth of digital economy, and developed a culture of e-payment and e-commerce.
WeChat’s internet ecology system
According to Illarionova, L. P., et al. (2019), internet ecosystem are the organizations and communities that help the internet transform and process. Which the rapid and continued development of internet technology are affected by a pool of different actors. Firstly, the major actor of WeChat is the Owner. As WeChat is developed by Allen Zhang’s team, the project is belonged to Tencent Holdings Ltd. As Tencent owned WeChat, the decision making of policies are made by the Pony Ma, the Chief Executive Officer of Tencent. As Tencent is the major player of e-commerce and social application business in China, users of WeChat has become their targeted customers group. Normal Citizens are the targeted users and they use WeChat as communication, social-networking and payment tool. Companies of different sectors are also users of WeChat as they advertise through WeChat and sell products through WeChat Pay. (Lien, C. H., & Cao, Y. 2014). As WeChat Pay bond bank cards to achieve advance mobile payment, WeChat partners are domestics banks that allows citizens to pay with their credit cards or saving cards locally. According to Hu, M., & Deng, I. (2019), as Tencent tried to expand their business globally, to promote online-paying for customers internationally, WeChat joins hands with major international credit cards such as Master Card, VISA, American Express. This feature is especially useful for Chinese users in other countries, such as international students. As WeChat has become very popular in China, competitors will adapt and follow. The company Alibaba has developed Alipay, which has become the most important rival of WeChat Pay. As Chinese Government internet security policies does not allow its citizens to use foreign social networking sites such as Facebook, Instagram or Twitter, these social networking platforms will not directly rival with WeChat. As WeChat belongs to Tencent, Tencent is the supplier of WeChat, providing new updates and new policies for WeChat. Android Play Store and Apple App stores are the two platforms for users to download the WeChat application, so that these two software are the suppliers of WeChat application as well. As Chinese government highly concern about the development of Social Networking in China, they have a department of Cyberspace Administration Of China, which monitor the actions and services of social media platforms and internet usage. And the Internet is regulated and monitored by the Cybersecurity Law of China, therefore, WeChat is regulated by it as well.
Below is the ecosystem map of showing the actors of WeChat.
Transformative effect brought by WeChat
Firstly, WeChat has changed the society’s traditional culture of sending red pockets face to face in Chinese New Year, which is the most important festival in Chinese Culture. In this culture, elderly and married couples and family relatives has to gift red envelopes/pockets to children and teenagers which is a symbol of Good Luck and Good Health. According to Siu, K. W. M. (2001), the tradition of giving red pocket is changing, and less people pay attention to the culture. With the launch of red pocket function of WeChat in 2014, this has promoted the tradition into a popular habit of citizens where parents give their children red pockets as a prize or as an motivation to finish their homework. As this function has brought convenience to citizens, people tended to use WeChat Red Pocket over traditional red paper envelope. According to the Tencent milestone, nearly 20 million WeChat Red Pockets were exchanged on Chinese New Year’s Eve in 2014. Moreover in 2015, Over 1 billion WeChat Red Pockets were exchanged on Chinese New Year’s Eve. This showed the transformative impact that WeChat has on the habits and tradition of Chinese society.
WeChat has another major benefit to the public health of society. In the past, people turn on their television and radio to get updates of health information. With WeChat notifications and articles from government, citizens can now access to newest health information in an instant. According to the research by Zhang, X., Dong, W., Liang, J., & Lei, J. (2017), more than 35% of users will read health-related articles from WeChat public accounts. According to Wu, P., & Zhao, D. (2020), during the outbreak of Covid-19, WeChat work with China government to provide updates of Covid-19 and health education, so that the public can increase awareness and learn prevention methods to tackle the spread of the virus. According to Tencent, WeChat has also developed a new function “WeDoctor” during Covid-19 , which provides online health enquiry service, psychological support, prevention guidelines and real time pandemic report in China Moreover, WeChat Moments allows people to do social news sharing, users can obtain information and maintain relationship with family and friends through chatting and video calling of WeChat . WeChat users can share public health articles and government warnings to their friends, so that more people can be aware of public health problems. Public Health education level of citizens in China will rise steadily in long term.
Economically, WeChat Pay has played a major role in mobile e-payment and e-commerce. According to the report by Research and Market(2020), 47% of mobile phone users use mobile payment and digital wallets in China, more than 500 billion transactions are being handled in 2018, in which more than 900 million people use WeChat Pay on a monthly-basis. According to Hasan, M. R., Daryanto, Y., Roy, T. C., & Feng, Y. (2020), the advancement of WeChat Payment increases profit of retailing businesses. As WeChat Pay utilized the e-commerce platform, different payment options are being developed, such as calling a ride, buying movie tickets, online shopping, charity donation, mobile fees top-up, food delivery and buying flight tickets. Business marketing strategies are being used to promote WeChat Pay, such as discount offers, preorder discounts, online payment services. With this user-friendly and convenient payment method, public buying and consumption can be enhanced, which are ultimately beneficial to growth of China’s GDP.
With the advance of technology and social networking services, the government has introduced new policies to maintain cyber-security and tackle cyber crimes. As WeChat Pay function brought fast and convenient payment methods to society, it also brought safety issues of personal data and bank accounts. According to Arsène, S. (2015), users of WeChat Pay has to bond their identity card so that every user can be identified by their real name. With this policy, government and police can monitor users activity to protect citizens from cyber crimes and fraud. The rise of WeChat has also stimulated the development of the Cyberspace Administration of China office(CAC) in 2014. The popularity of WeChat has directly affect the change of cyberspace security in China. According to Yuen, S.(2015),as WeChat social platform allows users to spread information freely, the CAC is operated to control cyberspace security and regulate internet content. The Cybersecurity Law of China was enacted to strengthen personal data protection, and redefine the security obligations of internet products and service providers, and monitor the speeches on social platform to maintain a healthy environment for the social networking users.
In summary, this article has introduce the social networking application WeChat. Firstly, explained and analysed on the historical development of the application, followed by an analysis on the ecosystem of WeChat and its relationship with its actors, and finally analyse on the transformative impact of WeChat in Cultural, Social, Economic, Political aspects. WeChat has significantly impact the social lifestyle of Chinese citizen in China, successfully showed an internet transformation in China to become the lead influencer for the Web 2.0 era.
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