- Importance of communicated channels within Tencent – sources
- Total Channel Views Jumped Over 200% Last Year – Tencent
- Will be difficult for chains to become as big as Douyin analysts
HONG KONG, Jan 13 (Reuters) – On a hot summer day last year, 90s boy band Backstreet Boys took to a stage in Pennsylvania and belted out hits as 44 million viewers tuned in. connected thousands of miles away for the online concert hosted by Chinese WeChat channels.
The show is just one of many events organized by WeChat owner Tencent to promote the app’s short-video platform – described by the tech giant’s founder, Pony Ma, as ” the hope of the company”.
Tencent Holdings Ltd (0700.HK) has also brought in other artists like Taiwan’s Jay Chou and Irish boy band Westlife for live concerts and, according to a source, has set up a team to build community. content creators as it seeks to challenge the dominance of ByteDance, the owner of TikTok and Douyin, and Kuaishou in the short video sector.
“Tencent hopes to turn Channels into the next WeChat Pay. It has a chance. But it’s also going to be difficult,” said Liao Xuhua, senior analyst at research firm Analysys.
WeChat Pay became the second-largest player in China’s mobile payment market less than a year after its launch in 2013, behind Alipay, which is owned by Ant Group, founded by Jack Ma.
Two sources close to Tencent said the importance of channels has been repeatedly communicated within the company.
The two-year-old platform was a bright spot for Tencent in an otherwise dismal 2022 when revenue from its other products, such as games and payment services, came under fire from tougher gambling regulations and strict COVID-19 restrictions.
Total channel views more than tripled in the past year, Tencent said this week as it revealed its latest growth figures for the platform.
Daily active creators and video uploads more than doubled.
The gross merchandise value (GMV) of live e-commerce, where telegenic personalities sell merchandise online in real time, has jumped more than 800% across channels, the company said.
He did not disclose absolute numbers.
A report by LatePost indicates that Channels’ daily transactions from live sales pitches reached more than 100 million yuan ($15 million) in September 2022 for the first time, indicating an annual rate of around 36 billion yuan.
But Douyin was already aiming to boost its GMV to more than 1 trillion yuan ($155 billion) in 2021, a sixfold increase from 2020 levels, sources said at the time. ByteDance does not publicly disclose official GMV numbers.
Tencent has integrated many of its products, ranging from Tencent Meetings to WeChat Mini Program, with channels to help creators stream content live, much like US group Backstreet Boys.
Tencent Meetings is a Zoom-like teleconferencing service, while mini-programs look like apps on Apple’s iOS and Google’s Android operating systems, but consume less data and run in WeChat.
An integration would allow, for example, a podcast host to conduct an interview on Meetings and broadcast it live on Channels. If the host recommends a product during the chat, a link may appear on screen directing viewers to a mini program where they can purchase the product using WeChat Pay.
Tencent also lowered the monetization threshold on channels, allowing users with as few as 10 subscribers, down from 1,000 previously, to start earning money from ads.
TikTok requires content creators to have over 10,000 followers to start monetizing.
Channels has also opened up advertising opportunities “like never before”, said Li Yikai, managing director of Americas and EMEA at advertising agency Nativex, compared to WeChat which airs a few ads a day.
“When you’re already scrolling and come across an ad, you don’t think twice. So naturally, you come across a lot more ads with short videos,” Li said.
In November, Tencent Chairman Martin Lau said Channels advertising revenue was on track to hit 1 billion yuan in the fourth quarter of 2022.
For TikTok and Douyin, research firm Insider Intelligence estimated in April last year that ad revenue would together reach more than $30 billion for 2022.
Channels also began charging e-commerce merchants a 1% to 5% commission starting this month.
Douyin charges 1% to 10% since 2020.
While some analysts see Channels as Tencent’s best chance to catch up with ByteDance, others believe it will be difficult for it to become as big as Douyin, China’s version of TikTok.
“When you have to start as a social media app and then get into the short video space, you have to build a whole e-commerce system to support it…I’m not going to say they can’t get there but it’s very difficult,” said Liao of Analysys.
But Shawn Yang, managing director of research group Blue Lotus Capital Advisors, is bullish on the channels given WeChat’s traffic potential.
WeChat, China’s most popular chat app, has over 1 billion active users.
“For example, in Douyin or Kuaishou, you won’t be able to ask your viewers to add you on WeChat. But on channels, you can quickly add someone on WeChat,” Yang said.
“It’s very beneficial for those who already have their own private WeChat traffic,” he said.
($1 = 6.7348 Chinese Yuan)
Reporting by Josh Ye; Editing by Brenda Goh and Himani Sarkar
Our standards: The Thomson Reuters Trust Principles.