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Tencent's e-commerce drive takes off in 2023 on the back of super app WeChat's short video and live streaming function

South China Morning Post
·3-min read

Tencent Holdings, China's video gaming and social media giant, saw its ubiquitous super app WeChat achieve significant growth in its live-streaming e-commerce business last year, thanks to the popularity of its TikTok-style short video function.

WeChat's short video and live streaming function enabled the platform to record nearly triple gross merchandise volume (GMV) in 2023, according to information released on Thursday during the app's annual Open Class Pro developer conference held in Guangzhou, capital of southern Guangdong province.

While the platform's exact GMV figures were not released, conference attendees were told that the number of orders made through WeChat's video function - marketed as Channels - grew more than 244 per cent in 2023 over the previous year, according to a report by Chinese online media outlet Thepaper.cn.

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A number of attendees at the conference, which was held as a closed-door event exclusive to industry partners, on Friday confirmed the reported growth rate. Tencent did not immediately respond to a request for comment.

Tencent Holdings founder, chairman and chief executive Pony Ma Huateng told an internal town hall meeting in December 2022 that short video was "the hope" of the company. Photo: Reuters alt=Tencent Holdings founder, chairman and chief executive Pony Ma Huateng told an internal town hall meeting in December 2022 that short video was "the hope" of the company. Photo: Reuters>

WeChat's high GMV performance last year showed how prescient Tencent founder, chairman and chief executive Pony Ma Huateng was in December 2022, when he told an internal town hall meeting that short video was key to the company's future.

The progress of WeChat Channels has been closely watched in China's internet industry, as Tencent quietly made inroads into the live-streaming e-commerce market to take on ByteDance-owned Douyin and Kuaishou Technology - the country's two largest short video platforms.

Tencent was expected to hit 100 billion yuan (US$13.9 billion) in e-commerce GMV, a measure of the total value of goods sold online, through WeChat Channels last year, according to a report last month by Chinese media outlet LatePost.

While the e-commerce turnover on WeChat Channels is small compared with those of Kuaishou and TikTok's Chinese sibling Douyin, Tencent has bet on swiftly building its online retail business on the back of the country's vast number of WeChat users, estimated at 1.34 billion.

WeChat short video function Channels has become a force in Tencent Holdings' advertising and live-streaming e-commerce operations. Photo: Shutterstock alt=WeChat short video function Channels has become a force in Tencent Holdings' advertising and live-streaming e-commerce operations. Photo: Shutterstock>

Tencent also plans to expand its live-streaming e-commerce-related headcount and broaden its product categories, as the WeChat Pay team builds the vital transaction infrastructure to facilitate online payments, according to the LatePost report.

WeChat Channels has already become a major driver of Tencent's advertising business, which increased 20 per cent year on year in the third quarter, the fastest growth achieved by all of the company's business segments in that period. During the second quarter, WeChat Channels raked in 3 billion yuan (US$421 million) in advertising revenue.

Launched in 2020, Channels has been growing rapidly and had about 813 million active users as of June 2022. That number was ahead of Douyin's 680 million users and the 390 million on Kuaishou, according to estimates by Chinese data analytics firm QuestMobile.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.