Why WeChat is not the next big thing for foreign companies

WeChat (a.k.a. Weixin) is the social-media app that has taken over China. Primarily a messaging application, it is also an all-in-one platform that allows its users to send and receive money, share articles or write their own posts, play games, and more.

Given that the app had attained 700 million active users last year, WeChat is an appealing tool for US businesses looking to break into the Chinese market. There is one major hold-up, however: Non-Chinese businesses cannot create verified WeChat accounts.

In order to create a verified business WeChat account to market to Chinese users, a company must submit a Chinese business license. You could use your US business license, but Chinese users cannot view accounts created in this way, which defeats the purpose. The foreign and Chinese markets are kept separate deliberately, which allows Chinese companies to dominate their own country’s market, while foreign companies struggle to find a way in.

Given that Google is blocked in China, simply translating and localizing a company’s existing website may not mean that it will be accessible to Chinese consumers. Therefore, a web presence on Chinese social media is a must. For that reason, many non-Chinese companies have found creative ways around the Chinese-business-license rule.

For example, there are numerous Chinese firms that market themselves as deputy companies, in essence selling the right to use their business license to create your WeChat account. This creates some risk, however, on both sides. If you use the account to do anything illegal or to provoke the Chinese government, it will be the local business whose license is associated with the account that will face repercussions.

On the other hand, the deputy company has a certain measure of control over the account (how much control depends on your arrangement; some of these companies offer translation and marketing services as well) and may use that to post articles and messages without your permission. The cost of these services can range anywhere from US$800 to $8,000.

Another method of getting around the rules is simply to create a personal WeChat account and use that to market your business. This is free and requires only a phone number or QQ (Tencent’s messaging app) account to set up. However, unverified WeChat accounts lack advanced features such as surveys, payments and third-party apps, not to mention the credibility that a “verified” badge lends.

If WeChat seems too much of a nuisance, you could consider making an account on Weibo (China’s microblogging site akin to Twitter) instead. Unlike WeChat, Weibo accepts foreign business licenses to create verified accounts. However, you may still require the help of a Chinese company for the Third Party Authorization letter required by the application.

Weibo may not be quite as popular as WeChat, but it still has 200 million active monthly users. It also fills a different niche in the social-media world than WeChat. WeChat is like a combination of Facebook and Facebook Messenger (though with a heavier emphasis on the Messenger aspect). It is ideal for staying in touch with personal contacts, or in a business context, interacting with clients and maintaining client loyalty. Weibo, like Twitter, is better for pushing content – for disseminating information broadly and quickly, be it industry articles, news of a sale or opportunity, or just clever commentary on current events.

In any case, it does not seem that foreign businesses will have full unhindered access to the benefits of WeChat any time soon. While WeChat is certainly invaluable when it comes to your personal relationship with China, it may not be the answer for your business needs.