What Does the WeChat Ban Mean for Your Ecommerce Business?September 19, 2020 in Blog
Update September 21, 2020: A U.S. district court has blocked the WeChat ban.
The Trump Administration announced the banning of WeChat effective Sunday, September 20. For many importers who rely on WeChat for communication with their suppliers, what exactly does this mean? We’ll examine the ramifications here.
What Does It Mean to Be Banned?
You may have heard that you will still be able to use TikTok as you normally would, but you won’t be able to download it after Sunday. Unfortunately, while the U.S. will wait until November 12, 2020 to decide if there will be a full ban on TikTok, the full ban on WeChat is rolling out immediately. This may result in messaging delays, failure in sending messages, or it might not have any impact at all.
It remains to be seen after Sunday.
According to the Commerce Department, the ban will include
- Any provision of internet hosting services enabling the functioning or optimization of the mobile application in the U.S.;
- Any provision of content delivery network services enabling the functioning or optimization of the mobile application in the U.S.;
- Any provision directly contracted or arranged internet transit or peering services enabling the function or optimization of the mobile application within the U.S.;
- Any utilization of the mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the U.S.
On top of this, the the Commerce Department is immediately banning payments being sent and received using WeChat and/or TikTok immediately.
Why Is WeChat Being Banned?
WeChat is being banned on the pretense that Tencent has a cozy relationship with the Chinese government and shares information with them. There may also be some retaliatory aspect to things as well, given that countless American apps and websites are blocked in China, not the least of which are Facebook and Google.
How Will This Impact You?
The major fear from ecommerce store owners is the impact on their communication with Chinese suppliers. While many foreigners still use traditional communication methods like email to communicate with suppliers, many foreigners use WeChat to communicate with suppliers because it is the Chinese’s preferred way of communication. Personally, I use it for nearly all of my communication with suppliers given the speed with which I can get responses.
While TikTok users may not experience any messaging delays after Sunday unless the Commerce Department seeks a full ban, the same may not be true for WeChat users as the Commerce Department has forbidden some business transactions between WeChat and American entities, which may include companies that provide internet hosting services for WeChat.
It’s unclear what the immediate impact will be—messages could immediately stop sending, there could be a slow degradation of messaging times, or there could be no impact at all. In other words, WeChat could basically stop working after Sunday while TikTok will have minimal disruptions.
If you’re an American and do not yet have a WeChat account, you will also not be able to download the app after Sunday. In other words, you should probably download it now if you don’t already have it.
WeChat Pay is ubiquitous in China and is one of the most popular payment methods for purchases of all types, from restaurants to websites. It’s also popular for sending money back and forth between users. These transactions will not be able to take place for payments originating in the U.S. starting this Sunday.
For most users, this won’t be an issue as WeChat Pay has always been difficult for foreigners to use. However, for certain groups such as overseas Chinese, this poses a problem.
What Can You Do?
The first thing you should do is to download WeChat on your phone if you’re an American and don’t already have it. You should also sign up for an account.
WeChat’s user registration process can be difficult, and you may not be able to easily register after Sunday, even with a hack or workaround. Again, it’s still unclear if there will be messaging disruptions even if you have the app.
WeChat also has a Windows program you can download although this appears to be down at the time of writing. It’s unclear if this was related to the ban, although it’s very likely that it is.
If there is a messaging service disruption from the ban, using a VPN might allow you to get around this. I use Express VPN, but there are countless VPNs that will work on your phone.
Finally, if you rely on WeChat for communication with your suppliers, you should give them your alternative contact information and get theirs, if you don’t have it already. The last thing you want is to essentially lose the ability to communicate with a vital supplier.
How do you feel about this news? Share it with us in the comments section below.
Dave Bryant has been importing from China for over 10 years and has started numerous product brands. He sold his multi-million dollar ecommerce business in 2016 and create another 7-figure business within 18 months. He’s also a former Amazon warehouse employee of one week.