Author:Butao Wang Feb 19, 2020 08:36 AM (GMT+8)

The coronavirus outbreak has driven up demand for China’s online grocers. WeChat Pay’s latest upgrades confirm the spike in online shopping and Tencent’s will to boost the smart retail business ever further.

Image credit: Brooke Lark on Unsplash

On February 18, 2019, WeChat launched a ‘Smart Retail’ entry point on its payment page, where the mini-programs of merchants such as Miss Fresh, Yonghui Superstores, Uniqlo and Walmart are handier for online buyers to access. The new function is available for users in Shenzhen and will be accessible in cities including Beijing, Shanghai, Guangzhou, Chengdu, Chongqing and so on.

Known as apps inside apps, mini-programs are lightweight portals that run inside another app like WeChat, Alipay or Baidu. WeChat smart retail is a new entrance to help merchants gain more users, leveraging their strength both online and offline. Moreover, the location-based service (LBS) in the WeChat app will gather real-time product information and promotions in the physical stores of its co-operating merchants and send them to users based on their current locations.

The coronavirus outbreak has triggered a widespread shutdown of stores and malls, which has taken a heavy toll on China’s retail & consumer sector. Many retailers offer ‘contactless’ pickup via WeChat mini-programs to ensure safe delivery to customers and to lower their operational risks.

On February 12, WeChat released the data of mini-programs during the epidemic period. From January 20 to February 8, the orders of fresh groceries increased by 149%, and the number of transactions in community-based e-commerce surged 322% year-on-year. Miss Fresh, one of the top players in this sector, reported a 309% jump in online orders and a 465% increase in transaction volume compared with the same period last year.

Therefore, to accelerate the smart retail sector now is a serendipitous move for Tencent.

Tencent’s smart retail strategy dates back to 2017. On December 15, 2017, Tencent invested CNY 4.2 billion ( USD 636 million) in a 5% stake in Yonghui Superstores, the supermarket chain in China. Soon after that, Tencent and Yonghui invested in Carrefour China in a move to revive the French company’s mainland business. More importantly, to work together on smart retail, mobile payments and data analysis.

As the most crucial investor and the biggest shareholder of JD.com, Tencent has collaborated with JD.com in expanding its smart retail landscape, including the investment of Vipshop, the co-operation with Suning and Wanda, and the acquisition of an 11% stake in BBK Commercial Chain, the largest retail entity in southwest China and the ninth-largest retailer in the country.

Via WeChat Pay, Tencent Cloud, mini-programs and so on, Tencent has built an ecosystem that can expand fast to follow demand in the smart retail sector.