Chinese mini-apps hold big appeal for businesses hit by virus

Linda J. Dodson

HONG KONG — The coronavirus outbreak has kept many Chinese at home, but that is not a problem for Mo Xingxuan, who owns a string of game arcades. Every day, roughly 1,000 people flock to try their luck on Mo’s claw crane machines — and as infections spread the numbers grew.

That is because MOMO Fun Star, his arcade business, recently expanded into the digital realm with a so-called “mini-app” that works inside Alipay, the e-wallet developed by Alibaba Group Holding’s fintech affiliate.

Mo’s mini-app attracted more than 200,000 players during its first 24 hours, thanks to Alipay’s huge reach — it has 900 million users in the country — and the convenience of being able to play the game without having to download it.

“I did not expect the mini-program to be so helpful,” said Mo, whose 15 brick-and-mortar arcades in China are only attracting half the customers they enjoyed before the country’s coronavirus lockdown. “The mini-app will continue to be our lifeline for a while.”

Chinese internet companies were among the first to be hailed as “super apps” — big ecosystems with more than a dozen functions. Now they have moved to the next level of digital infrastructure construction by making it easier for all sorts of businesses to set up low-cost, quick-to-build mini-apps inside other apps. There are 1.7 million apps on Alipay alone, offering services from banking to real estate trading to online shopping. The company said it will help 40 million businesses digitize their operations by 2023, through mini-apps and other means.

In March, the number of daily active mini-app users in China reached 440 million — a figure that Aldzs, a Beijing-based industry portal, had expected would be achieved by year-end. “The outbreak has demonstrated the value of mini-apps and this user behavior will not be changed easily. Mini-apps will become a must for more and more people in China,” its analysts said in a recent research note.

Further growth in mini-apps would be good news for Alibaba and many other Chinese internet companies keen to tap corporate demand as the country’s sluggish economy weighs on consumer spending.

Mini-apps are not new. Alibaba’s great rival, Tencent Holdings, introduced the concept to its WeChat messaging app as early as 2017. Since then, Chinese internet companies like Alibaba and search engine giant Baidu have followed suit, rolling out their own mini-conquerers one after another to fend off increasingly fierce competition.

“China’s internet is app-dominated,” said David Dai, an analyst at Bernstein Research in Hong Kong. “If one app does not offer the service users are looking for, they would find it on another app and may never come back.”

In a country where the number of mobile apps has already surpassed four million, mini-apps help their host build a walled ecosystem and give users no reason to look elsewhere, Dai said.

For Alibaba and Tencent, which compete head-to-head in digital payments, mini-apps offer another benefit. Since businesses running on Alibaba’s Alipay cannot accept payments via Tencent’s WeChat, and vice versa, the more mini-app operators the two companies can lure, the greater share they can grab in China’s multibillion-dollar mobile wallet market. Alibaba and Tencent then charge a small fee when mini-app operators cash out their mobile wallets.

Perhaps with that in mind, Alibaba and Tencent have poured substantial amounts into getting companies on board during the pandemic. Tencent has offered 200 million yuan ($28 million) in subsidies for anyone creating virus-fighting solutions with mini-apps. Alibaba has also given mini-app developers financial resources and technical assistance.

Market observers say Chinese companies will embrace mini-apps regardless of incentives.

“I used to receive three to five inquiries per month before the coronavirus crisis, but now I have inquiries every day,” said Liang Zhushan, marketing director at Guangxi Fu Code Network Technology in Nanning.

Liang said that when he used to talk to companies he had to “talk their ear off in order to close a deal.” Now brick-and-mortar businesses in the city forced to shut their doors have begun seeking his help. “Mini-apps are the easiest and cheapest way for them to hook on the internet,” Liang said. “The coronavirus outbreak has educated the market. Everybody now understands the importance of having a digital presence.”

Piggybacking on existing features like payments and messaging on WeChat, usually takes one week and a budget of 3,000 yuan to 8,000 yuan for Liang to create a mini-app. Developing a conventional app could cost 100 times more and take at least six months, he said.

Some cash-strapped companies are also counting on mini-apps to help cut out the middleman and capture more profits.

Adam Kalimi, a programmer at Shanghai-based A3Collective, last month received inquiries from three restaurants to build mini-apps, even though Chinese diners can order from those restaurants via Meituan Dianping or other mainstream food delivery apps.

“The restaurants want to have their own mini-program to really cut down the cost,” Kalimi said. With food delivery companies taking a 20% to 40% cut of each transaction made on their platform, Kalimi said his clients are struggling to survive now that Chinese consumers have tightened their belt.

Mo, the claw crane arcade owner in Beijing, has seen the benefits. He recently decided not to renew the lease on three of his arcades. Instead the 36-year-old and his team have joined an online workshop to learn how to make more of the e-shop.

“The mini-app has opened up a whole new world,” he said.

Source Article

Next Post

Coronavirus threatens first residents of India's Andaman Islands

NEW DELHI — After 33 coronavirus cases were reported in India’s Andaman and Nicobar Islands, a remote crescent of 572 islands in the Bay of Bengal, experts began worrying about the indigenous people who live there. “Even though all reported cases are among nontribals, our biggest challenge is to protect […]

You May Like