What happened
Ever since WeChat launched Mini Programs, the possibilities of how they could operate have kept widening, from WeChat official accounts to short videos and livestreaming. Now, WeChat is ready to tap into another new business opportunity with the rise of Mini Programs: Multi-Channel Network agencies, which act as the middlemen between brands and KOLs.
Through a recent announcement, WeChat invited MCN agencies to register for a soon-to-be-revealed channel within the super app that will “support more merchants to provide high-quality services to their users.”
Not just anyone can apply, though, as there’s a long list of criteria WeChat demands, such as dedicated office space, more than $70,564 (500,000 yuan) in registered capital, over one year in operation, and relevant experience within the WeChat ecosystem. This channel will go live after a certain number of MCNs have registered, WeChat added, without disclosing the target number of companies.
Jing Take#
By building a platform for MCNs, WeChat ultimately recognizes the growing influencer economy and the monetizing potential behind it. The upcoming channel will provide convenience for merchants and brands as well as a new revenue stream for WeChat’s owner, Tencent, in the form of commissions.
China’s MCN industry is growing but remains poorly regulated. As Jing Daily previously reported, the market research company iiMedia estimated that, despite the pandemic, China should be home to over 28,000 MCNs by the end of the year — double the amount during 2019. While WeChat has set its criteria, the MCN industry is known for its low barriers of entry, and its deeply-embedded problems should be recognized. Fake data, for one, has dragged down the reputation of big MCNs like Hive Media, and could ultimately harm brands and WeChat’s via its relationships with them.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.