Watch out, US tech giants. Last week, Tencent became the first Asian tech company to join Facebook, Apple, Amazon, Google, and Microsoft in the elite class of companies that have exceeded $500 billion in market value. Reaching a record high market capitalization of $534.5 billion, Tencent surpassed Facebook as the world’s fifth most valuable company.
Tencent’s messaging app WeChat is virtually ubiquitous in China among mobile users, with a global adoption rate nearing a billion monthly active users. Nearly all international brands in the China market are active on the platform: 97% of brands tracked in L2’s Digital IQ Index: Luxury China had an official WeChat account as of February. Since then, Céline became one of the last luxury holdouts to join WeChat—making the Chinese app the second social platform that the technologically reclusive brand has joined after Instagram.
Although brands’ WeChat adoption is almost ubiquitous, they could do more to take advantage of WeChat’s wide range of functions for CRM. Currently, less than half of brands in the watches & jewelry category have geolocation that can be used on features such as store locators, while only 16% of luxury fashion brands offer live chat.
Luxury brands are also slow adopters of WeChat commerce. Only 6% of fashion brands and 14% of brands in the watches & jewelry category have WeChat stores. Mass-market brands are more comfortable with WeChat commerce: 64% of brands tracked in L2’s Digital IQ Index: CPG China sell through the app, mainly via JD.com stores connected to their WeChat accounts.
Even Facebook’s messaging platform has taken a growing resemblance to WeChat and other Asian messaging apps over the years. Spun off into the independent Facebook Messenger app on mobile in 2014, it has followed in WeChat’s footsteps by adding features like chatbots, peer-to-peer payments, and e-commerce. But China remains an elusive market for Facebook as it remains blocked in the country, despite Mark Zuckerberg’s persistent efforts to make his way into the Chinese government’s good graces.