Tencent's WeChat Channel to start charging merchants as it accelerates commercialization

December 30, 2022 7:15 pm

WeChat Channel, a TikTok-like service built into the popular Chinese super app WeChat, will start charging merchants “technical service fee” on January 1, 2023.

Like Douyin and Kuaishou, WeChat Channel features short video streaming and live-streaming, and has become an online sales channel for merchants. Thanks to WeChat’s huge traffic pool, WeChat Channel has 813 million monthly active users as of June 2022, according to Quest Mobile, when WeChat has a MAU of 1.309 billion, per Tencent’s Q3 financial report. The number is quite significant, considering Douyin and Kuaishou’s MAU are 680 million and 400 million, respectively.

As the latecomer to the short video scene, WeChat Channel is speeding up its commercialization plans, and the pressure is high — Pony Ma, the founder and CEO of Tencent, recently stated at an internal staff meeting that WeChat Channel is the company’s new hope.

According to WeChat Channel’s recent announcement, a technical service fee ranging from 1% to 5% would be charged for all merchants on the platform. New merchants are entitled to fee deduction to 1%  for the first 30 days if their transaction volume is less then 1 million RMB.

Daily transactions of WeChat Channel has surpassed 100 million yuan for the first time in September this year, according to LatePost. If the transaction volume remains, then WeChat Channel’s service fee can reach 2 million - 5 million yuan per day. Naturally, as the transaction volume grows, there is a considerable room for growth in the service fee revenue.

Other short video platforms and WeChat’s Channel's rivals — Douyin and Kuaishou both charges merchants technical service fees. Kuaishou started charging the fees on July 20, 2019, for 5%, while Douyin started charging the fees on February 1, 2020, for 1% to 10%.