#WeChat lands in Europe

Imagine , selling  globally your complete stock of consumer goods in only 18 hours and closing the day with total revenues of 640,000 EURO. Imagine that you could achieve this while comfortably sitting in the headquarters of your company, with no physical store in any of the targeted market.

In fact, you do not have to imagine.

This was actually achieved two years ago, by the luxury goods company Dior controlled by the French businessman Bernard Arnault, through the use of the Chinese social network WeChat.

WeChat, created by China’s tech giant Tencent less than six years ago, is by far the preferred chatting platform of Chinese people. WeChat is used monthly by 847 million people inside and outside the country. Virtually everyone owning a smartphone in China is a WeChat user. WeChat does not only stand first in China’s social apps rankings, but it stands far above competitors with an 80% penetration rate. WeChat is followed by QQ, also owned by Tencent, with a penetration rate of 49%. Number three is Weibo with only 7.5% penetration.

But numbers don’t depict the most promising feature of WeChat, which many argue has managed in only few years’ time to create a completely new ecosystem, or better put, to re-create the very concept of the Internet in China and to entrench the use of WeChat in Chinese people’s daily life. People don’t only use the platform to chat with friends and colleagues, but also to call, to send photos and documents, to share cheerful moments of the day, to purchase goods in physical shops via QR codes, to read and share news, to play games, to search and buy things online, to hail taxis, to order food and settle the bill at restaurants, to send one another digital money, and much more.

Good news for Europe: WeChat has arrived in Europe. Having set a first office in Milan in 2015, the plan for 2017 is to reach out to other European capitals, including London and Paris, in particular to help European brands to sell, or increase sales to Chinese consumers.

China is increasingly criticized for its oftentimes complicated market entry requirements. WeChat offers an affordable – marketing costs in the range of 15,000 EURO – and straightforward solution to open an online presence and effectively sell on the Chinese market without having to pay for a Chinese business license or having to partner with a not always trustful local agent.

On 26 January WeChat held the first presentation of its European roadshow at the brand new Tangla Luxury Hotel in Brussels. During the two-hour workshop, organized with the assistance of ChinaEU, Andrea Ghizzoni, the new Director of Tencent-WeChat Europe, was on the central stage presenting the functionalities of the platform as a powerful export tool to China. Around 40 representatives of the luxury, fashion, retail, food, tourism and hospitality industries from across Europe participated to the workshop, including some famous names such as Jil Sander, LVMH, Ferrero, FederlegnoArredo, Marriott and Radisson Blu Balmoral. Very eager participants were also the permanent representations of several European countries interested to attract more Chinese tourists.

In her introductory remarks, Claudia Vernotti, Director of ChinaEU recalled that  “Chinese will be making 700 million overseas visits in the coming five years”, referring to figures announced by President Xi Jinping in his recent speech in Davos,“Chinese tourists are among the biggest spenders in the world, making up to 40% of global luxury sales, of which 80% are made overseas.” Chinese spent 1.2 trillion RMB (approximately € 163 billion) overseas in 2015. In the same year, twelve million tourists from China visited Europe. If the numbers are to increase this would all go to the benefit of the European industry, be it the luxury brands, the hospitality business or the tourist providers, which today employ one fifth of the European services industry.

“What makes WeChat particularly interesting in the eyes of Western brands is that it can roughly forecast when a Chinese is to make a visit to Europe, thus providing a powerful tool to influence consumer choices and shopping experience,” explained Andrea Ghizzoni at the workshop. Triggering what is called “super targeting”, WeChat allows merchants to target a well-defined audience, based on age, gender, purchasing power, geographical location, likelihood to visit a country soon, etc., attract them as followers and send them personal communication messages, special promotions or coupons both in China and once they are travelling.

Australia and several countries in South East Asia have already started to use this channel. It is time for Europe to do the same and fully leverage the potentiality of WeChat. Attending the workshop among others were the Chinese Mission to the EU and the European Commission, who are coordinating the activities for the EU-China Year of Tourism 2018. Eric Philippart (DG GROW) the Special Counsellor of the initiative, listened to the workshop very carefully and noted that preparatory activities will kick off in May this year, with B2B match making and high level institutional moments running throughout 2018.

Anticipating concerns regarding competition and e-privacy concerns, which have recently put under fire a number of American tech companies operating in Europe, Ghizzoni pointed out: “Users are not upset by the marketing messages on WeChat because there is a limit in the frequency they can be sent with no more than message being sent per week and no algorithm is used by WeChat to filter posts or ads to users. On the same token, brands are not concerned by entering on the platform because they are not required to give WeChat any corporate data, so they have nothing to lose.”

More information

Please click here to enjoy a video with highlights of the event including a selection of the interviews to some of the participants.

The full presentation given by Andrea Ghizzoni at the workshop can be found here.

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