Voice assistants like Amazon’s Alexa, Google Home, and Apple’s Siri have become a staple for consumers around the world, but in China, the technology is still nascent as the tech giants like Tencent, Alibaba and Baidu sell smart speakers as standalone, while Alexa and Home are not available.
Integrating Xiaowei into WeChat, which has a billion users worldwide, will allow users more options to share their social life to cashless payments, hail a cab, buy movie tickets, order food delivery, pay utility bills or send money to friends without leaving the platform.
Tencent is also keen to further monetise its Mini Programs, which are similar to apps and have been downloaded 1m times since launch in early 2017 — just less than half the size of the Apple App Store. Mini Programs allow users to post images, post text, post comments, share music, share articles and post ‘likes’, and have become a key part of digital marketing strategies for many brands in China as they can open an account and gain a following on WeChat and use these features for free, unlike with Facebook.
Brands use these two features to develop their relationships with users through promotions on their official accounts and provide true app-like experiences without traditional native apps as they seamlessly link offline and online experiences together.
There are also plans to introduce more ad formats on WeChat. One experiential and interactive ad format on WeChat that is popular with brands in China at the moment is HTML5 (H5), which makes use of artificial intelligence and augmented reality and has become the dominant creative format for both local and major brands to use social shopping to reach the young middle-class consumers because brands can make use of both writing and visual storytelling to tell a very detailed story.
The move to improve WeChat by Tencent comes as the Chinese government freezes the approval process for new games produced by the world's largest gaming company. The regulatory changes have had a significant impact on Tencent, which reported its first profit decline in a decade and has lost more than $200bn in market value since the start of 2018.
This has forced it to look to overseas markets for its gaming business, signing an agreement with Singapore-based Sea, of which it is the largest investor, to allow Sea's digital entertainment arm Garena to publish Tencent’s mobile and computer games in Indonesia, Taiwan, Thailand, the Philippines, Malaysia, and Singapore.
It announced its first restructuring in six years at the start of October 2018, consolidating its business units combining online and mobile internet into one unit and will launch a new division to focus on business services and cloud computing.
As part of the restructuring, it cut the marketing budget of its gaming division and reduced the branding budgets for mature games into half and cutting spending to games not coming out until 2019, as well as for underperforming games.