Hacker News Reader

Comment by simplecomplex | Hacker News Reader

WeChat is a financial disaster for all we know. Tencent doesn’t share any financials. Internet chat has always been hugely popular. Building a profitable business out of Internet chat has not been so easy historically. Historically, successful free chat software have been loss leaders (FB messenger for FB, yahoo messenger, AIM for AOL). Snapchat has never made money. LINE is the only chat app I know of to really turn a profit from just their app, and it has come at the expense of active users and squeezing more advertising into the app.

Odd title “cashing in” considering there’s no talk of the business behind WeChat...

View on HN

WeChat is a financial disaster for all we know.

1.4 billion people use it as their dominant payment method. Not mobile payment method, but payment method full stop. I think it's safe to say they're incredibly profitable.

They could be losing money on 1.4 billion in transactions. Their super low transaction fees might indicate WeChat Pay is a loss leader.

That’s my point. Tencent intentionally hides WeChat in their financials. You assume it’s wildly profitable because Tencent is. Usually when a company tries to hide the financial narrative of a product it’s not because it’s doing great.

“We consider payment at this point in time as to [sic] infrastructure service rather than a service that generates profit for us. And I think that status will maintain for quite some time,” Martin Lau

I don't think you understand the model. People transfer money in, then leave it there. It literally can't lose money.

Doesn’t WeChat is shopping and payment monopoly in China?

I heard you can’t even order ramen without using WeChat/WePay.

By no means is WeChat a shopping or payment monopoly. There's Taobao and Alipay by Alibaba. From what I know they are fairly even in terms of market share (payment). WeChat's shopping scene is mostly on a very small scale and personal level.

Reply on news.ycombinator.com