Research on China Didi

Accessing the Impact of an Environmental Change:

Wechat Payment Market Environment Analysis

I. Introduction

A 2014 study showed that Europe remains the leading region when it comes to adopting mobile payments. Europe was first among regions, with 24% of all mobile payments. Asia was second with 17%. Asia was also the fastest growing, with 58% year-over-year growth, according to the report. China makes up about 30% of the global smartphone market and Chinese smartphone users is expected to jump from 519 million in 2014 to 704 million by 2018. China Internet Watch reported that Mobile transactions in Q3 2015 worth 18.2 trillion yuan, and is a year-on-year surge of 195 percent. (Case background，2016)

Weixin/WeChat is the world's fastest growing social app, innovating new ways to connect, communicate and share. Developed by Tencent and released in 2011, Weixin/WeChat has empowered over 396 million monthly active users worldwide by the end of March 2014. In 2013, WeChat included a payment function, part of an effort by parent Tencent to challenge rival Alibaba Group Holding Ltd’s Alipay affiliate. On May 6, 2014, Tencent established the Weixin Group. The group covers Weixin development, open platform and extended services such as Weixin Payments and O2O services. (Tencent.com, 2016) Research company- IResearch report that Tencent’s Tenpay, in which WeChat Payment is a significant part, has expanded its market share from a low sigle-digit percentage to 19.2% in two years, which the company’s biggest competitor-Alipay has a market share of 69.9% in mobile payments market. (YUAN, 2016) One Tencent edge is a feature that lets users send virtual envelopes stuffed with electronic cash—the online version of Chinese Lunar New Year tradition of giving money in red envelopes called hongbao. During this year’s holidays in February, WeChat users exchanged more than 32 billion hongbao envelopes, nine times as many as last year. (Osawa, 2016)

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