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Tencent’s WeChat app keeps growing despite Beijing crackdown

Tencent Holdings Ltd’s WeChat super app managed remarkable growth in services from e-commerce to payments and search over the past year, defying a government crackdown that sought to tear down barriers within China’s Internet arena.

Daily active users of WeChat mini-programs – lite apps within the main social media and messaging platform – grew about 12.5% to 450 million in 2021, Tencent executives said during the WeChat annual event Thursday. The app’s native search function – a feature once touted as Tencent’s answer to Baidu Inc’s dominance – added 200 million monthly users over the past year, they added.

Having amassed more than a billion users in China and across the globe, WeChat is the payment and smartphone backbone to Tencent’s sprawling Internet empire that spans social media, gaming and enterprise software. The Chinese behemoth’s signature creation has evolved over the years, offering new features like download-free lite apps and short-video feeds that encroach on the home turf of rivals such as Alibaba Group Holding Ltd and ByteDance Ltd.

Tencent’s last major innovation was mini-programs in 2017, and industry observers have pondered the future evolution of the seminal service founded by Allen Zhang – particularly as Beijing moves against closed ecosystems like WeChat that it deems a monopoly. On Thursday, the company announced that WeChat has started accepting China’s digital yuan or e-CNY in its payments service, a major boost for the central bank-led initiative.

Here are the latest figures showcasing WeChat’s massive growth:

  • Daily active users of mini-programs reached 450 million in 2021 and they used the lite-app services about 32% more every day
  • Number of active mini-programs grew 41% in 2021 while number of mini-programs with payment transactions grew 28% last year
  • More than 700 million people accessed Covid-19 services such as testing and vaccination appointment bookings
  • Transactions in Covid-hit sectors like catering, tourism and retail doubled last year after services moved online
  • The number of mini-programs offered by overseas merchants jumped 268% over the past two years; online commerce transaction volume surged 897%
  • Monthly active users of WeChat Search jumped to 700 million in 2021, up 40% from 500 million a year ago
  • WeChat Pay team tripled to 1,200 people from 400 in 2016; it now has more than 1,800 bank and financial institution partners

WeChat is among the targets of Beijing’s tech crackdown, which has shown no sign of abating more than a year on. The technology overseer warned Internet firms to stop blocking rival services, prompting WeChat to start allowing external links to apps run by the likes of Alibaba and ByteDance. It’s part of a broader campaign by Beijing to dismantle the so-called walled gardens of China’s mobile internet that shore up the online giants’ control over consumer data and profits.

In November, regulators ordered Tencent to stop rolling out new apps or updates after its products violated data protection rules, though the company has since been permitted to resume updates for some services.

China’s premier super-app is likely to play a bigger role in Tencent’s future growth, at a time when sluggish domestic consumption and regulatory headwinds exert pressure on key businesses like video games and advertising. WeChat executives signalled during the Guangzhou event that the app’s units will work more closely to channel users to each other. WeCom, the enterprise version of WeChat, will soon connect to its Channels video service, and mini programs will continue to bring users to search, they said. – Bloomberg



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