CITIC SEC: WeChat Mini Program "Sending Gifts" Feature Expected to Exceed Expectations in Viral Spread, Invest in Five Major Directions.

CITIC SEC released a research report stating that on December 18th, WeChat Mini Program officially started the grayscale testing of the "Send Gifts" function. As one of the most popular social networking applications in China, WeChat Mini Program's "Send Gifts" function, as a new business model, is expected to bring a wide range of optional consumption and "emotional" consumption space. Combined with WeChat's current market position, the subsequent spread and proliferation of the "Send Gifts" function are expected to exceed expectations, and the theme's popularity is expected to continue into the new year. In terms of investment direction, it is recommended to focus on five major areas. From a perspective of certainty, it is recommended to focus on retail merchants, and from an elasticity perspective, it is recommended to focus on e-commerce service providers and brand & advertising agency operators. Event: WeChat Mini Program officially started the grayscale testing of the "Send Gifts" function. According to WeChat's announcement on December 18th, WeChat Mini Program officially started the grayscale testing of the "Send Gifts" function. Except for jewelry, education and training categories, and products priced over 10,000 yuan, all other products will support the "Send Gifts" function by default, and the product details page will display an entrance for "Send Gifts". CITIC SEC's main points are as follows: Business model innovation, a typical case of "first launch economy". WeChat, as one of China's most popular social networking applications, the "Send Gifts" function of WeChat Mini Program as a new business model is expected to bring a wide range of optional consumption and "emotional" consumption space. The "first launch economy" mainly refers to the first release and display of new technologies, products, services, models, and formats, emphasizing the complete process of chain development, as well as reflecting the characteristics of fashion, quality, and trendy consumption upgrade. This innovation of the "Send Gifts" function of WeChat Mini Program is a typical case of the "first launch economy". The spread and proliferation are expected to exceed expectations, and the theme's popularity is expected to continue. Penetration rate is a key factor in measuring thematic investment and industrial investment. Combined with WeChat's current market position, the speed from the launch of new features to widespread use may be quite fast. Subsequently, attention should be paid to catalysts for accelerating penetration: 1) Pay attention to the usage of the "Send Gifts" function during key holidays, as there is a natural demand for gift-giving during holidays; 2) Grayscale testing situation, as well as Tencent's further iterations of related products and functions; 3) Promotion by KOLs and marketing hot events; 4) High-frequency data, including the number of users and merchants, to measure the effectiveness of investment attraction and user operations. Explore five major directions, with a focus on retail merchants from a perspective of certainty, and e-commerce service providers and brand & advertising agency operators from an elasticity perspective. 1) WeChat has a wide range of user scenarios and traffic channel advantages. WeChat Mini Program, combined with WeChat Video Accounts, social networking proliferation, and search integration, forms live e-commerce, social e-commerce, shelf e-commerce, and other models. Looking to the future, social proliferation is expected to accelerate the release of WeChat's e-commerce potential. The proliferation situation can refer to the aforementioned catalysts mentioned in the report. 2) WeChat Mini Program and e-commerce service providers; 3) Brand & advertising agency operators; 4) Retail companies that have opened WeChat Mini Programs. The report recommends focusing on companies that currently have popular single products or excellent online operating experience, combined with new consumer formats; 5) Potential popular product directions that are expected to quickly spread through the WeChat Mini Program format, combined with consumer subsidies. The report suggests continuing to focus on the implementation of AI on the consumer side and the direction of IP economy, including potential popular products in areas such as AI glasses, AI earphones, AI toys, and trendy cultural and creative products. Risk factors: New feature promotion and commercialization may fall short of expectations; cultural regulatory policy risks; macroeconomic pressure on development; increased industry competition risks.