Dubbed WeChat Minishop, the offering will allow merchants to create an eCommerce mini-program inside WeChat using Tencent’s tool instead of paying for developers. While it won’t be a centralized system similar to JD.com or Alibaba’s Taobao, it could help Tencent lure smaller businesses away from those platforms, CNBC reported.
Tencent also said that WeStore will support live streaming, a mode of payment that an increasing number of Chinese consumers are using.
There’s no charge for merchants to open a virtual store and there will be no service charges. Alibaba’s platforms charge fees for merchants, the report noted.
Tencent developed WeChat, a mobile text and voice messaging service, in 2011. The app is available on Android, iPhone, BlackBerry and Windows phone platforms and has more than 700 million downloads and 300 million active users, Tencent says on its website. It competes with WhatsApp and Viber.
Experts told CNBC that Tencent has the advantage of a huge base of users, as well as the potential ability to tap into a large amount of data.
“Tencent broadly sits on quite a bit of both online and offline consumer data,” Jacob Cooke, CEO of WPIC, an eCommerce tech and marketing firm that helps foreign brands sell in China, told CNBC.
Still, Pedro Yip, partner and the head of the retail and consumer goods practice for Greater China, at Oliver Wyman, the New York management consulting firm, told CNBC Tencent could face some challenges. Yip noted that Tencent will need to have a clearly defined proposition for its new offering, as well as strong quality control to prevent counterfeit products from emerging on the platform.
Tencent appears to be on solid footing to grow. In March, Tencent reported that its revenues increased 25 percent to 105.8 billion yuan ($15 billion), and analysts had expected 102.9 billion yuan ($14.6 billion). In terms of earnings, profits of 21.6 billion yuan ($3 billion) were lower than the 22.9 billion yuan ($3.2 billion) expected.
Last month, Tencent and private-equity heavyweight Primavera spearheaded a $300 million investment in Xingsheng Youxuan. The startup, based in Hunan, has enjoyed a significant boost from the COVID-19 epidemic, which has forced Chinese consumers to seek food delivery services and other alternatives.
In May, Tencent revealed plans to invest 500 billion yuan ($70 billion) in cloud computing, artificial intelligence (AI) and cybersecurity over the next five years.
In an interview with state media, Tencent Executive Vice President Dowson Tong said the company also wants to invest in experimenting with blockchain, servers, Big Data centers, supercomputer centers, Internet of Things operating systems, 5G networks and quantum computing.