Alibaba Cloud Subsidizes Mini-gram USD 300 Million
Mini-gram, a lite version of application embedded in some apps, is popular in China. Alibaba's move in mini-gram is aggressive and in a rush when Tencent is well ahead of it.
On 2019 Alibaba Cloud Summit, CEO ZHANG Jianfeng (张建锋) published the mini-gram cloud and announced the CNY 2 billion (USD 298.5 million) subsidy plan for mini-gram (mini version of programs or applications) development based on Alibaba ecosystem.
Half of the CNY 2 billion will be used to subsidize the cloud technology related to mini-gram and the other half will be used to subsidize the operators of mini-grams in Alibaba’s ecosystem. The subsidy aims to promote Alibaba’s mini-gram and attract more users to Alibaba’s ecosystem.
Mini-gram is a side function firstly invented by WeChat (微信), a communication application with integrated functions like third-party payments, news push, and so on. The function was on in early 2017 but not popular until early 2018 due to a game mini-gram named “跳一跳”. According to JisuApp (即速应用), Wechat mini-gram users exceeded 700 million and DAU (daily active user) reached 230 million by the end of 2018. 72% of Wechat users are Wechat mini-gram users and the portion of frequent mini-gram users among all Wechat users was approximately 34%.
Comparing to Wechat’s mini-gram, the mini-gram function was not on until September 2018 in Alipay (belongs to Alibaba ecosystem). By the end of November 2018, the number of Wechat mini-grams was over 1.2 million but the number of Alipay mini-grams was approximately 65 thousand. The DAU of Alipay was approximately 1.7 million at then.
Mini-gram’s emergence is due to the booming of applications. The top three reasons that users will user mini-grams instead of downloading a full-version app are 1) easy to use, 2) no need to download, and 3) use-as-you-go, which saves the smartphone’s storage space.
Users will use mini-gram when they just need to use the app for once and do not bother about download and cell’s storage space. Use-as-you-go is a feature for mini-gram and the integration of the mini-gram’s parent app helps itself to keep users stay at its app for a long time since users do not need to switch among apps to use the functions they are looking for.
Wechat mini-gram’s DAOT (daily average online time) is approximately 14 minutes. The convenience provided by mini-gram not only saves the user’s cell phone storage space but also reinforce the parent application’s user stickiness. Wechat’s strength is in social network environment but Alibaba’s strength is in financial related area. Wechat mini-gram users are willing to share or forward the mini-gram to their friends – approximately 70% of mini-gram users.
Alibaba ecosystem’s social network property is weaker than Wechat, but its strength of financial will be attractive to those who have needs in financial solutions to its platform to use mini-grams. Due to the barely-to-non conversion cost in mini-gram, using mini-gram on Wechat or Alipay make few differences for users if the mini-gram does not heavily rely on financial services or social network.