Apple accepts WeChat Pay to halt sales drop

Apple Inc announced on Aug 29 that its iconic app store and music-streaming service Apple Music now accepts WeChat Pay in China, a clear sign of easing tensions with internet giant Tencent Holdings Ltd amid an in-app purchasing spat.

Experts say Apple had little choice but to reconcile with Tencent, a bellwether of the mobile industry and a dominant social media force in China, as it tries to salvage falling sales and retain users in the world's largest consumer market.

In a statement, Apple said it is "excited" that Chinese customers can now use WeChat Pay to purchase apps or subscribe to Apple Music, and will continue to offer payment options that are simple and convenient.

The inclusion of Tencent-backed WeChat as a payment option fills the void of having China's second-largest mobile wallet on board when 963 million WeChat users become accustomed to making purchases via the all-in-one app.

App store, which houses a number of mobile applications from gaming to entertainment to dining for the iOS system, is a main gateway for the US tech giant to earn fees from iPhone users. It previously supported credit card transactions, Apple Pay, China's UnionPay and Alipay, which is WeChat Pay's biggest rival.

The Chinese mainland has been a critical battlefield for Apple's app store. As of June, the region generated nearly one-third of the app store's worldwide revenue, according to App Annie, a company that tracks metrics for apps.

With people awaiting the new iPhone lineups and Chinese brands elbowing into the premium phone market, Apple is in dire need of alternative revenue streams to make up for the sales slump, and that means doubling down on software, says Li Chao, senior analyst at iResearch.

"Apple has nothing to lose to include a payment method that is familiar to the Chinese. It can even boost sales in the short term," he says.

Ma Si in Beijing contributed to this story.

hewei@chinadaily.com.cn

(China Daily European Weekly 09/01/2017 page25)