After opening multiple portals for the Alipay mini-program, Alibaba took a step further and invested heavily in mini-programs. After 25th of Jan, the news was already circulating that the mobile-based Taobao will launch its mini-programs in March. If that news ring true, it means that Alibaba will put two core resources to deal with the mini-programs competition.
The industry commonly believes that in order to compete against Wechat’s weekly success of 580,000 mini-programs and 170 million active users, Alibaba must now utilize this double-edged strategy for the late market entry gap. Certain groups also point out that Alibaba’s new interest and enthusiasm in the mini-program market doesn’t act as a single-minded competition strategy targeting Tencent alone, it paves the way for a new retail concept too.
One year ago, Tencent’s mini-programs was born unprecedentedly with a silver spoon. Within that single year, mini-programs were capable of releasing 32 times and add up to 100 items. Releases were made at an average once every one and the half-week while daily users reached 170 million with a total of more than 580,000. Mini-programs are not only accepted in first and second-tier cities, the coverage was about 50% in third and fourth-tier cities as well as those below. Meanwhile, the number of backend development users (businesses + individuals) has exceeded one million. Excluding specific industries, the majority of the mini-programs can be up selling on the market platform within two hours. With a third party platform of about 2300, games that are released with a mere duration of a month can retain 65% of their users the next day, 52% within the next 7 days while the 2017 average user retention rate is at 4 %.
However, being a light app, What's mini-programs isn’t first of its kind and light apps are nothing new. Way before Wechat, there was Facebook, Baidu and UC, each launching their own light app products. Nonetheless, after Wechat announced its mini-programs, the come-to-stay factor and the heavy traffic allows the app to be continuously revisited, attracting users of the newer generation, positioning it as a competitor to all other light apps.
In fact, Wechat’s mini-programs weren’t as smooth smailing this whole year. When it was just launched, it peaked till 98,000 but its heat dropped to 140,000. Some of the companies even gave up the development of mini-programs, branding it tasteless and a failure.
The data show that as of June 2017, the number of Wechat mini-program users increased exponentially. Since April, Tencent has continuously updated Wechat’s mini-program, opening up various capabilities such as allowing entry through QR Scans, supporting third-party platforms usage, adding data analysis features, allowing all official accounts to access to mini-programs, and lower the hassle during the registration of mini-programs. Meanwhile, ever since May, Tencent increased their mini-programs forwarding capabilities, improve jumping from official accounts to mini-programs, offers custom keyword searches and adds mini- program links via group chat platforms.
Regardless of the outcome, Tencent doesn’t overhype the mini-programs. With a slight restraint of expansion in place, Zhang Xiaolong, senior executive vice president of Tencent Group and president of WeChat Business Group, has repeatedly stressed that mini-programs will not replace native apps and will not have a centralized flow of traffic, making it appear less of a threat.
Alibaba is the most successful low-key mini-program provider, having the best app ecosystem. After launching mini-programs last September, Alipay welcomed it first large-scale release of its mini-programs the early of January. In this release, Alipay announces neighboring mini-programs, jumping between mini-programs, the notifications center, industry channels, aid in data entry, custom user data analysis etc.
Besides opening up different entry points, Alipay also provides data assistants and screenshot user analysis. At the same time, Alipay included third-party mini-programs, while its ISV is capable of issuing bots to an open third-party platform to help businesses, organizations, and operations. If you were to judge base on the perspective of its release, the steps they have taken are in a similar order with Wechat’s mini-programs.
As for this, Alipay is quite smart. Compared with Tencent, Alipay isn’t as good in products. Hence, rather than allocating a large amount of cash to get it done, they go with the rhythm. An anonymous insider did mention to the Beijing News team that Alipay is more inclined to connect members and credit systems since it stays true to their brand.
However, Alibaba is not easily satisfied. After Alipay’s mini-programs were released, there was news that their mobile department Taobao is developing on mini-programs as well and is expected to release in March, with its pre-release hinted right after spring.
The insider also reveals that the mobile, Taobao joins the market of mini-programs to enhance connectivity. Since the inclusion of live moments, mini Taobao and Taobao headlines, the mobile usage of Taobao has become fragmented and diverse, so it really requires a quick come-and- go platform for users to execute their desired action. As for this, mini-programs have the swiftness required to bring an outstanding performance.
Although mobile Taobao’s release is not officially confirmed, famous data analyst Liu DaPeng views that Alibaba and Tencent launch their mini-programs in their attempt to create their own ecosystem and uses the traffic to attract businesses to sign up so as to get more users and user data. Compared with Alipay, Taobao has a better personalized connectivity with users, making it a wiser choice for the development of mini-programs.
THE E-COMMERCE BATTLE
Why is Alibaba so keen in developing mini-programs? The industry believes that mini-programs acts as a new breeding ground for online merchants and budding retailers. At the e-commerce level, Lynx and Taobao are the two core products of Alibaba’s. With mini-programs the potential to be third, next strong force for the offline market, it even allows offline transactions and payments to be made, making it a necessity in the eyes of Alibaba.
For Tencent, mini-programs are also an opportunity for e-commerce. according to the Aladdin Index Retail List, decentralized retail concepts like mini-programs are important in the ecosystem. Of the top ten mini-programs released by Aladdin in December 2017, 5 of the top ten mini-programs are business related. At the same time, in Wechat’s 2017 Data Report, e-commerce mini-programs are one of the five major industry categories with the highest monthly visit. According to Hu Renjie, Vice President of WeChat Open Platform Foundation, 95% of the e-commerce providers have ventured into mini-programs, such as JingDong, PingDuoDuo, Mogujie etc.
There are indications that Zhang Xiao Long’s phrase “mini-programs are not specifically prepared for the e-commerce market” seems more like a positive nod towards its capabilities. In November 2017, Tencent also insists that it's not aggressively attacking businesses by opting for e-commerce. Businesses need not be that afraid of the customer traffic outflow. They still hope to maintain their decentralized concept in promoting brands and platforms for businesses and retailers alike.
Liu DaPeng believes that for Tencent, mini-programs acts as an offensive weapon. Besides providing a better service to sign up businesses, it opens new beginnings into the e-commerce route. To Alibaba however, mini-programs acts more defensively in the shadows. Allowing existing businesses to expand into e-commerce, it functions similar to Taobao’s initial release.
He further explained that mini-programs are a new retail spot and experimental field. Through the collection of data online, it improves each retail procedure. Not limiting itself to just product-selling, it evens focuses more on the service and user experience end. This coincides with the core feature of mini-programs, that is to collect user data and translate it into services befitting all.
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