Restricting that language to the 20th is essential because it could limit the potential blow that U.S. companies could take if they were cut off from non-US users of Tencent. In the United States, WeChat is little more than a messaging service, one used primarily by people with professional ties to China and members of the Chinese diaspora. But in its homeland, WeChat has quickly become a kind of platform-agnostic operating system – in addition to acting as a social network, WeChat has grown into a payment platform, a marketing tool, a gaming destination, a financial lender and a self-contained app ecosystem. In other words, losing access to the hundreds of millions of loyal users of the platform in China could put a serious belly in a company’s balance sheet.
Ironically, many American companies that rely on WeChat to some degree suffer far more than WeChat’s own parent company. Listed analyst Ming-Chi Kuo told the Journal that Apple, which has long been dealing with soft sales growth in China, could see worldwide iPhone shipments dip by as much as 30 percent in the wake of a ban. Visitors to Hong Kong Disneyland and Shanghai Disneyland could use WeChat to buy passes, rent strollers and buy concessions – if the executive order extends to U.S. transactions with WeChat’s more popular Chinese counterpart as some fear, revenue could be jeopardized . The same can be true for the money UPS collects from Chinese customers who pay for shipping via WeChat, and the list goes on and on.
For what it’s worth, WeChat owner Tencent Holdings seems significantly less worried. The company saw its quarterly earnings increase to more than 30 billion yuan ($ 4.3 billion) this week, and executives noted in a call with investors that the company’s U.S. WeChat company accounted for a paltry 2 percent of its total global revenue . During the same call, Tencent CFO John Lo said that the company believes that President Trump’s executive order does not affect WeChat’s domestic Chinese operations, although he – like everyone else – is still waiting for further clarification.
