WeChat Is Expanding Into Europe, US To Get More High-End Brands On Its Platform
WeChat, the China-based social media and messaging service, is aiming to expand in Europe and the U.S. to develop a payment service and lure new advertisers.
According to a report in Bloomberg, WeChat, which is owned by China’s Tencent, is opening an office in the U.K. and another European country. WeChat is already in Italy. Tencent has an office in San Francisco but is looking to increase the number of WeChat employees in the U.S. as it goes after advertisers and payment providers.
“We needed to make a step closer in serving European brands,” said Tencent Europe Director Andrea Ghizzoni in an interview with Bloomberg.
While WeChat has greater than 889 million users in China, Bloomberg noted it hasn’t made much inroads outside of that country. This isn’t the first time WeChat has gone after consumers in the West. Bloomberg reported that in 2013, WeChat hired Lionel Messi, a soccer star for a campaign outside of China.
“There were lots of downloads” of the app, said Ghizzoni in the interview. “However, stickiness was slow.”
With its latest push in the West, Bloomberg reported WeChat is going after business-to-business market, encouraging Western brands to sell their products and services on the WeChat platform and is going after what it calls “high-value” brands in the U.K. and Italy. Burberry and Chanel are already on WeChat’s platform and are considered high-end brands. For its European expansion, WeChat is focusing on fashion and high-end goods but will eventually expand into travel and retail services. By expanding into Europe, WeChat is hoping to lure higher-end brands to its platform for Chinese consumers as well as those Chinese visiting Europe. Bloomberg cited Goldman Sachs, which estimates 220 million Chinese tourists will travel overseas by 2025, which is an increase from 120 million in 2015.
“Tencent could be following Chinese travelers to Europe and the U.S., as many of these consumers are going overseas for shopping,” said Marie Sun, a Shenzhen-based analyst at Morningstar Investment Service, in the report. “It would make sense for brands to advertise on WeChat, which is a large and effective platform.”