During an offline WeChat Open Class on January 9, 2020, the WeChat research team on QR Code economy released a report on the economic power of QR Code that it co-wrote with Economic Institute for Global Industry of Tsinghua University and Tencent Research Institute. The report delved deep into the “butterfly effect” brought by QR Code on economic and social development.
Wu Jing, consultant for technological strategy from Chinese Academy of Sciences, said that the QR Code ecosystem is the key to merging online and offline scenarios since it connects the real world and virtual world in digital economy. It will substantially empower the endeavor of economic and social digitalization by lowering the cost of commercial connection and boosting value addition.As QR Code gains importance, more merchants and consumers are paying attention. In this article, we’ll take a closer look at its power.
I. Its Past and Present
A few days ago, “the Father of QR Code on Japanese Usage Overtaken by China” made a hot topic on Weibo. People were surprised to know that this thing started in Japan last century but reached such popularity in China. Since then, “Masahiro Hara, the father of QR Code” has become well-known by the Chinese public.
QR Code originated from barcode. In the 90s, Toyota introduced barcode from America to promote automation, and the company appointed him to develop a scanner for it. After two years, he invented Japan’s own barcode scanner. Later, Japanese economy transitioned from a large-scale production model to a high-mix and small-batch one. The information required to record individual products increased dramatically. Sometimes, there were more than a dozen barcodes attached to a single product. This put heavier workload on the workers, and raised the error rates. To solve this problem, Mr. Hara tried to come up with a solution that would allow for quicker reading and less errors.
Soon after its release, QR Code was utilized in the “billboard system” across Toyota, which made information management way more efficient. Though Mr. Hara invented it, he had little idea how it could be widely used in the future. Tencent, however, noted its potential and went all out to promote it. In 2012, Zhang Xiaolong stated that search bar is the internet entry for PC, and QR Code is that for WeChat. Now, his words have been proved: the economic value created by QR Code was as high as 8 trillion.
II. Fission of QR Code’s Economic Value
The report clearly points out that the QR Code has turned the official account into a nurturing platform for dissemination of information and product marketing since it builds up connections between individuals and between individuals and businesses; with the products and services provided by WeChat Mini Programs, it helps put traditional industries online; finally, transactions are made with WeChat Pay.
Tools like Mini Programs, official accounts and WeChat Pay construct the WeChat open ecosystem. By easily linking people, goods and services, the QR Code upgrades the value chain into a network, thereby fostering fission of commercial value.
The fission is evidently shown by the 8.58 trillion yuan’s economic value WeChat ecosystem created in 2019, compared with that of 1.36 trillion yuan in 2018.
The impressive figure exhibits the fact that the QR Code has changed Chinese people’s paying habits. Users no longer need to take cash or wallets with them, for the code is everywhere. In the retailing sector, the average use of WeChat Pay is 5.8 times per person; the monthly average of times QR Codes are scanned for ordering in restaurants went up by 619% from 2018; car-hailing QR Codes are used 2.05 times more often than 2018. Since passengers can scan QR Codes in Mini Programs to enter subways, the efficiency for entry is 300 times higher.
The figures stem from its prevalent usage among merchants. With QR Code, merchants can avoid counterfeit money and have easier bookkeeping. Offline small businesses can achieve digitalized operation and enjoy multiple fintech services like loans, insurance, stock replenishment on credit, data analysis, etc., which lower the threshold to start businesses.
This can stimulate more entrepreneurial people to join the race of QR Code economy. According to latest figures, QR Code helped create 26.01 million jobs. The changes in users’ consumption also produce plenty of new business models and occupations. Tools like Mini Programs, official accounts and WeChat Pay keep businesses running with an asset-light strategy. Business owners know better about users’ needs so as to take quicker actions to improve service systems accordingly. The report shows that start-ups took up 81% of Mini Programs owners, 64% of corporate official accounts and 74% of QR Code service providers. 64% of the interviewed companies believed that official accounts benefited their promotion of brands and products.
In the commercial sector, the QR Code facilitates the development of the real economy and invention of business models.With the rise of mobile commerce, physical stores have broken the limits of space and extended their reach to 6 times more value than before. Evening economy is another vibrant sector. Many businesses that used to close after sunset are now open 24-7. Data shows that evening consumption peaks at 8pm to 10pm, while consumption made between 10pm and 12pm also accounts for 25%.
By the end of 2019, over 50 million self-employed businesses were on the WeChat Pay platform, which was 79.4% of all in China. Among the small business owners that used WeChat Pay, long-tail businesses accounted for 40%; business owners in their 30s took the lion share of 39%; over-50s owners account for 19%. In addition, WeChat had become an integral part of their operation. 70% of small and medium merchants used payment code. They were accustomed to managing their businesses on smartphones and providing services with WeChat accounts.
III. Future of WeChat QR Code
It can be seen from the report that official accounts, Mini Programs and other WeChat tools still play important roles, and that more economic benefits can be brought with QR Code linking these tools. Payment Credit Points will also give the QR Code economy a leg-up. Wu Jing made the point in her speech that the potential of commercial value can be fully unleashed with Payment Credit Points, and that the QR Code economic framework is made complete with WeChat, Mini Programs, WeChat Pay and Payment Credit Points. Therefore, companies need to take heed of the Credit Point system and associate their goods and services with it, so as to boost selling and nurture loyal users.
Furthermore, companies must realize that every astronomical figure in the report proves the importance of QR Code. WeChat QR Code does have a voice in China’s payment industry. Though it may be difficult for foreign marketing staff to understand why WeChat QR code has such prevalence in China, QR Code represents a shortcut for foreign brands or products to enter the Chinese market. The combination of WeChat QR Code, Mini Programs, official accounts and WeChat Pay can expand brands’ potential userbase. Therefore, after understanding the advantages of QR Code, it is of particular importance to learn how to use QR codes to cultivate loyal fans for your brand or product.