Tencent Launches “Buy Now, Pay Later” Credit Feature

What happened:

Tencent launched a “buy now, pay later” credit feature in WeChat, allowing it’s one billion-plus community to avail of a deferred payment plan. This feature offers users a “Fen Fu” option, meaning they can buy on credit without the need to withdraw the credit in advance. These microloans — with added unfixed interest rates — can be repaid at any time which differentiates it from other instalment offerings. It cannot be used to make payments to other platform users.

Jing take:

This is good news for citizens already predisposed to using the same online ecosystem for a multitude of transactions. Moreover, while Chinese people in general dislike credit cards, they are more open to purchasing with online credit. Younger consumers particularly are more eager to avail of credit when making luxury purchases. The new function mirrors “buy now, pay later” options that have popped up in Western markets through service providers like Klarna, QuadPay, and Affirm. Depending on its popularity and uptake, this function that follows the likes of Alipay’s Huabei feature, could be seen as another incremental step on the road to shifting China’s perception of credit. It will also help to democratize the act of buying high-ticket items such as luxury fashion — on the surface anyway — by making these products more widely affordable from WeChat stores and opening them up to a new demographic of Chinese consumers.

The Jing Take reports on a leading piece of news while presenting our editorial team’s analysis of its key implications for the luxury industry. In this recurring column, we analyze everything from product drops and mergers to heated debates that sprout up on Chinese social media.


Consumer Insights, Market Analysis