China’s mobile payment giant WeChat Pay launched its mobile wallet feature WeChat Pay My in Malaysia last week.
To promote this new function among Malaysian users, WeChat is running a week-long “red packet ” promotion to give users free money between $0.95 to $21.7 who signs up the new wallet feature. The money will be transferred directly to users’ mobile wallet balance.
WeChat has established a wide user base in Malaysia for the past few years. According to the company officials, it counted over 20 million active users throughout the nation in late 2017, out of the 31 million people in Malaysia. The introduction of WeChat Pay to Malaysia will mark the country the first destination for WeChat to localize its payment service overseas.
The WeChat Pay My will mainly focus on peer-to-peer functionality and will allow local users to pay offline merchants in local currency. Previously, WeChat Pay’s global strategy is to attract Chinese tourists to use its mobile wallet while travelling in another country.
The deeper mobile penetration also gives WeChat hope to repeat its success in the Malaysian market with 31 million people owning an estimated 40 million cell phones. Government welcomes digital payment as a strategy to fight against corruption, by reducing cash payment. The central bank has approved 44 e-money licenses to nonbank entities in the last two years.
Active market and positive policy, however, means fierce competition. WeChat Pay has to face competition not only from its Chinese counterpart Ali Pay but also from local player Grab, the biggest car-hailing brand which also developed its Grab Pay late last year.
Grab Pay has partnered with Malaysia’s largest bank and owned a wide-reaching network through its ride-sharing business. The company has claimed that Grab Pay already acquired half of mobile phones Malaysia, which puts pressure to WeChat Pay to win the market.
WeChat Pay is not the only payment giant who looks overseas for further growth. Its all-time competitor, Ali Pay also bets that its payment model will succeed outside the Chinese market.
Both companies’ expanding strategy has initially targeted Chinese tourists overseas. According to China’s OTA giant Ctrip, the five countries receiving the most Chinese tourists are Thailand, Singapore, South Korea, Japan and Malaysia. WeChat Pay and Ali Pay are therefore looking to extend their operations into these countries.
However, the companies are expected to eventually expand and target the local population.
WeChat has been facing a hard time for expanding internationally. Since 2013, WeChat has signed up soccer stars such as Lionel Messi, Brazilian youngster Neymar, Hollywood starts to expand its WeChat massager in South America, India, North America and other Southeast Asian markets. However, as a late entrant in almost every overseas market, WeChat always faces threat from WhatsApp, Facebook and sometimes BBM and Line services.
Of the 15 countries where WeChat has invested heavily to aim at: Argentina, Brazil, Hong Kong, India, Indonesia, Italy, Malaysia, Mexico, Nigeria, the Philippines, Singapore, South Africa, Spain, Thailand, and Turkey, the results look grim for WeChat, since in not one single country does this Chinese social networking giant appear to beat WhatsApp or Facebook, according to sources.
If WeChat Pay MY is successful in Malaysian market this time, Tencent can, therefore, regard it as a milestone for its mobile wallet business to target other Asian countries that can ultimately allow the giant to grow its overseas market.