WeChat commercial practice a mixed bag for platforms and consumers
A bite of the pie
Published: Sep 10, 2019 04:58 PM
Shanghainese woman You You is one of WeChat's 1.1 billion users, and a huge fan of a bilingual public account run by a media outlet. 

You reads the account's posts everyday and learns how to express hot issues of the day in English. Based on the trust established over the past five years, she sometimes clicks on the advertisements planted in the account, and occasionally even makes purchases.

Whether this experience is pleasant or bitter is largely a matter of luck. Sometimes she spends a little money and gets a good deal, and sometimes she ends up just wasting a small amount of money.

Random ads

"I won't risk large amounts of money on those unbranded goods. I just try some novel items that catch my attention when I browse the posts," she told the Global Times.

"I try to leave messages on the WeChat account to file a complaint about the bad purchases, and they are quick to reply to me. But the editors on duty usually say 'the purchase you made was an advertisement planted by Tencent, the company that owns WeChat. We are just a platform they choose randomly to place the advertisement on. You'd better tell them about your case.'"

You You's experience is backed up by Sunshine Chen, who operates her company's two WeChat public accounts, one with 168,000 subscribers and the other with 99,000 followers by the end of August. 

"Tencent WeChat randomly selects advertisements for the end of our account. The content differs from time to time. For example, attached to the same article we published was an English learning app ad at 3 pm and then at 4 pm it was another ad selling shoes," Chen told the Global Times.

Chen added, "With high quality daily posts, we have a steady number of new subscribers every month. But it's still hard for us to make money through the accounts. Tencent can make money, but not us."

According to the 2019 interim report released in August by Tencent Holdings Ltd, WeChat's parent company, monthly active users with China's ubiquitous messaging service had grown 7 percent year-on-year to 1.1 billion during the second quarter of 2019. The report also revealed that revenues from online advertising increased by 16 percent to 16.4 billion yuan ($2.3 billion) in the second quarter of 2019 year-on-year. Social and other advertising revenues increased by 28 percent to 12.01 billion yuan, mainly benefiting from greater advertising revenue contributions from Weixin Moments and QQ KanDian.

There were 1.76 million WeChat public accounts actively posting by March 31, 2019, according to industry statistics.

On average, Chen's company earns about 4,000 yuan every month from the ads their readers click on. "It's well below the cost we have for the office downtown, salaries for our editors and reporters, and other management fees. We are definitely a bad example of WeChat management."

But there are successful public account operators who not only cover all their related costs, but generate considerable profits, which is the reason why so many individuals and institutions are joining the battlefield in a bid to grab the market share.

Citing confidentiality policies, three successful WeChat account operators contacted by the Global Times declined to reveal their exact income. But one confirmed that with its 1.2 million subscriber account, readership can easily reach 100,000 for every article they publish. They earned over 1 million yuan in 2018.

"We not only share the income from Tencent, which gives us money based on the clicks on the ad link, but also plant tailor-made promotions for certain products and services. The price can be as high as 300,000 yuan per article," the anonymous source told the Global Times.

Not all WeChat users are as welcoming as You You as far as planted advertisements are concerned.

"I just want to get information or knowledge through those subscriptions. How can they waste our time or mislead us by planting advertisements in the posts?" Chen Man, a postgraduate majoring in law at a Shanghai university, told the Global Times.

Bad practice

"Sometimes the advertisements are not 'healthy' for young readers. You find great things in the ad, but when you really buy the product or service, there are traps which will harm you or cost you a lot," Chen noted.

As an example, Chen cited an online "easy access loan" advertisement targeting university students, in which so called low-interest loans turned out to come with extortionate interest rates that trap victims in the contract. In some extreme cases, a few thousand yuan turned into several hundred thousand, which the debtors are unable to pay back.

Chen said that as an account operator, she welcomes advertisements. But since her company doesn't rely on income from WeChat accounts, she screens tailor-made commercials very closely. 

"It could put our accounts at risk if we carelessly put potentially harmful advertisements on them. What's more, it would be terrible if we are also held responsible for any bad consequences resulting from the advertisement. I'd rather say no to it at the very beginning," said Chen.

According to a Xinhua News Agency report, exaggerated news, fake information, substandard quality and unlicensed selling have become common problems in new sales practices both on WeChat and live-streaming platforms. Internet celebrities can earn quick money overnight based on their fame but consumers will find it hard to protect their rights when they are trapped in bad deals.

Liu Deliang, a law professor of Beijing Normal University, was quoted by Xinhua as saying, "First, the platforms should improve their supervision functions and regulate the payment trailing system to guarantee better after-sales services. Second, law enforcement departments should set up an online inspection system and have an online credit system. Third, the penalty for fraud should be increased."

Photo: VCG & GT