The move might affect companies like the social e-commerce platform Pinduoduo, which expanded itself through sending links from Pinduoduo via WeChat, encouraging its users to invite other contacts to form a team to purchase a product at a lower price.
Tencent’s platform is China’s main social network for friends to share information and communicate, and has been leveraged by a slew of companies to gain new users from its 1.1 billion users pool.
Pinduoduo — which has Tencent as an investor — also allows its users to buy a product at zero cost if they succeed in finding enough individuals to help cut the prices by clicking on a link from the Pinduoduo platform. Users who want a free product normally send such links to friends or relatives via WeChat. The price is then reduced with each click.
Among the regulation changes proposed by WeChat, such price-cutting links will be banned. Links seducing others to download new apps or undertaking tasks out of WeChat will also be banned.
Pinduoduo co-founder Da Da told 36Kr on Monday that the company needs to wait until the updated regulation take effect to see how it could be affected.
Huang Zheng, co-founder and chairman of Pinduoduo, said earlier this month in an internal speech that Pinduoduo has already done full justice to rely on WeChat’s user traffic to gain its own users, and added that the platform itself is now evolving from a social e-commerce marketplace to a traditional e-commerce marketplace, according to Late Post.
Although it will take time to see whether and how Pinduoduo could be affected, other companies are already tasting consequences due to WeChat’s policy changes.
Shanghai-based LAIX, which features an artificial intelligence-powered English-learning platform, has attributed its slower growth in the second quarter to WeChat. Its CEO Yi Wang commented in the Q2 earnings release that the growth of the company’s online platform Liuli Reading, and hte online course program DongNi were negatively affected by the tightening of WeChat’s Moments sharing policy.
Caixin Global reported in May that WeChat denoted Liuli Reading as a prime culprit for encouraging users to share their learning status on Moments, a social network within WeChat for users to share content. Users who did so for 80 days would receive a free physical book in return, but WeChat contrasted this move saying that it “severely” altered the user experience within the app.