Social media giant plans European expansion
A few years ago, when European consumers were making payments with credit or debit cards, Chinese people were still carrying around wallets stuffed with cash.
Andrea Ghizzoni, European director of Tencent, is charting growth.
Today, following the rise of the smartphone, most Europeans are still using bank cards but Chinese buyers have made things easier by embracing the social media platforms on their phones. Their mobile activities include hailing taxis, buying breakfast, snagging luxurious brands, reserving hotels and booking flights. For many, cash is no longer necessary.
WeChat, a unit of China's internet giant Tencent, boasts 800 million active users－the equivalent of the population of the European Union and United States combined. It has taken the lead in offering more than chatting and communication.
Now, the company has started to work as bridge between European brands and Chinese consumers.
Andrea Ghizzoni, European director of Tencent, said the company will expand into the United Kingdom and France this year, after it opened its European headquarters in Milan, Italy, in 2015.
"We plan to start operations in London and the team will be in place soon to kick of promotion activities by the end of March," Ghizzoni said.
In the UK, the company aims to enter into cooperation partnerships with local companies. Digital Retex is one. It will help find potential clients wanting to advocate their products on the social media platform.
Digital Retex has already supported WeChat in Italy and "the partnership proved to be extremely successful".
Ghizzoni unveiled the European plans in Brussels at an event organized by ChinaEU, a digital and communication promotion organization.
After one year in operation, the WeChat Europe-Digital Retex team employs around 20 people.
WeChat's second step in Europe will target the UK because it is a "strategic market" and has an appeal among Chinese consumers, and because it is a trendsetter and innovation hub in Europe.
Ghizzoni said Chinese consumers have been living their daily lives on their palms and European exporters should recognize the reality.
He said the company's operations in Italy have been growing fast and it now serves more than 50 clients, including large fashion and luxury brands, retail companies and the hospitality industry.
"Revenues are already in the range of millions, and we expect them to grow significantly this year."
He said the company has been focusing on helping clients find ways to get closer to Chinese consumers.
"This year, we are pushing new advertising formats and targeting capabilities, together with Tencent cloud solutions and cross-border payments. All these tools can prove extremely successful to help Western brands reach and serve Chinese consumers in a consistent and effective manner."
He said the company will work on consolidating its business in Italy, starting its UK operations, and making headway into other EU countries.
"By the end of the year, we will consider setting up local operations in other EU countries, like France for example," said Ghizzoni.
He believes his company's designed advertising campaigns for clients on the WeChat platform can help European brands reap returns in the range of 20 percent to 30 percent.
He said WeChat does not have a long-term expansion plan for Europe but continues to reinvent itself with new services and features.
"In overseas markets, like Europe, we will keep focusing on the development of services to best serve EU companies interested in leveraging digital channels to foster business opportunities with Chinese customers," he said.