Is WeChat losing its appeal to luxury brand marketers? · TechNode

The world of WeChat marketing is changing. For years, the super app was the alpha and omega of digital marketing in China, with more than a billion monthly active users and a whole industry’s worth of supporting services. But as user growth plateaus and other social media challenge WeChat’s lock on eyeballs, a report finds that WeChat is morphing from ad platform to a marketing Swiss Army Knife for luxury brands. 

In a report issued April 9, the Digital Luxury Group (DLG) and marketing automation specialists JINGdigital wrote that WeChat is evolving from a broadcasting platform into a broader customer relationship system, even as competing apps eat into its ad share.

Along with a user growth and engagement time slowdown, WeChat saw decelerating WeChat community growth in 2019. The growth rate of luxury brands that have over 100,000 followers on their WeChat official accounts slid to 18% in the first half of 2019 from 38% for the same period last year, according to the DLG and JINGDigital report. Those with less than 100,000 followers saw an even steeper slide to 6% in the reporting period from 31% a year ago.

Meanwhile, users are spending more time on short video and livestreaming, helping apps that lead in these formats emerge as the profitable new forms of marketing. Top luxury brands are trying to leverage the new models, marked by Louis Vuitton’s launch of livestreaming sessions on Xiaohongshu. Livestreaming is gaining popularity with the rise of content-driven e-commerce trends, although the format typically features a less premium shopping experience, akin to a traditional TV infomercial.

The shift in user attention to short video and livestreaming is reflected in the migration of ad budgets from brands, a major source of revenue for tech firms. ByteDance, the creator of Douyin, TikTok and news aggregation app Toutiao, has eroded ad revenue share from older tech peers Tencent, Baidu, and Alibaba.

Back on WeChat, brands are adjusting marketing strategies to focus on what the platform is best at. In addition to moving to a full-service model, they’re also shifting to a more focused, closer relationship with customers through WeChat.

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Written by Aakash Malu


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