WeChat Reading Product Analysis Report

" WeChat Reading " is a reading software used by many of us and it is a relatively successful product. In this article, the author analyzes the product "WeChat Reading" and summarizes the analysis report. Let’s take a look.

1. Industry Analysis

1.1 Policy level

1.1.1 The country has introduced a number of policies to promote the development of national reading

Since the 2014 Government Work Report proposed “promoting national reading”, national reading has been written into the Government Work Report for seven consecutive years. Promoting reading among all the people is of great significance to national rejuvenation, improvement of national quality, and construction of a culturally strong country. The country advocates national reading from the bottom up to improve the quality of the people, which reflects the importance it attaches to national reading and provides strong policy support for the development of the digital reading industry.

1.1.2 The country’s emphasis on intellectual property protection promotes the healthy development of the digital reading industry

In 2019, the "Opinions on Strengthening Intellectual Property Protection" was put forward for the first time, and it was emphasized again in 2020, and the "2020 Plan for Deeply Implementing the National Intellectual Property Strategy and Accelerating the Construction of an Intellectual Property Power" was put forward. This reflects the country's determination to encourage originality and protect intellectual property rights, and also continuously strengthens the awareness of copyright protection in the cultural industry. This policy both regulates and protects the digital reading industry and is the driving force for the development of digital reading.

1.2 Economic level

1.2.1 The increase in per capita consumption and the demand for entertainment consumption

According to data from the National Bureau of Statistics, in 2021, the national per capita disposable income of residents was 35,128 yuan, a nominal increase of 9.1% over the previous year; an increase of 14.3% over 2019, and an average increase of 6.9% over the two years. The median disposable income of residents nationwide was 29,975 yuan, an increase of 8.8% over the previous year.

In addition, the per capita consumption expenditure of the national residents was 24,100 yuan, a nominal increase of 13.6% over the previous year; an increase of 11.8% over 2019, and an average increase of 5.7% over the two years. Per capita consumption expenditure on education, culture and entertainment was 2,599 yuan, accounting for 10.8% of per capita income, ranking fourth in per capita consumption expenditure.

It can be seen that as the per capita consumption level increases, people's consumption capacity continues to improve. The demand for entertainment is increasing, and people are more willing to spend on it. This phenomenon has laid the economic foundation for the digital reading industry.

Figure 1 Average and median per capita disposable income of residents in 2021

Figure 2: National per capita consumer expenditure and composition in 2021

1.2.2 The epidemic has increased users’ demand for e-reading

As the epidemic has affected the overall economic environment, users' desire to consume has weakened, and they have turned to embrace the cultural and entertainment industry. Offline entertainment facilities, such as cinemas and bookstores, are easily affected by the epidemic and cannot open normally, so users' demand for digital reading has increased.

In addition, due to the impact of the epidemic, the crew was unable to shoot and release films normally, the company's copyright operation business was restricted, and the focus of revenue was on user payments for digital reading. These two points ensure the economic development of the digital reading industry under the epidemic environment.

1.3 Social level

1.3.1 The scale of digital reading users continues to increase

Influenced by the "Internet +" wave, the number of digital reading users in my country has continued to increase. As of 2020, it has reached 497 million, approaching 500 million, an increase of 24 million people compared with the previous year, a year-on-year increase of 5.11%. Driven by the steady growth in user scale, the scale of my country's digital reading industry has continued to expand year by year. As of 2020, it has reached 35.16 billion yuan, a year-on-year increase of 21.75%. The ever-expanding user base has led to the booming development of the digital reading industry.

1.3.2 Continuous Improvement of Digital Reading Ecosystem

As the IP market gradually matures, online literature has reached a peak in terms of the number of authors, quality of works, and commercial value. As the core productivity of the online literature industry, the influence of online writers is also increasing. A new pattern of online literature is gradually taking shape: young writers are forming the new blood of the industry, middle-aged writers have a solid position, and experienced writers also have a strong influence. The three generations of writers jointly contribute high-quality content and promote the more prosperous development of the online literature industry. The perfect digital reading ecosystem has laid the foundation for the further development of digital reading.

1.4 Technical aspects

1.4.1 Development of Machine Learning and Big Data

The development of machine learning and big data can deeply explore users' reading preferences, making personalized recommendation algorithms more perfect, thereby improving user retention rates and promoting users' willingness to pay.

1.4.2 Development of Smart Hardware

With the continuous development of technologies such as the Internet of Things, smart hardware products have become more and more intelligent, and a series of e-readers have emerged to provide consumers with high-quality service experience in the field of e-reading.

1.4.3 Development of 5G Technology

The pace of national informatization construction is accelerating. With the development of 5G technology, technologies such as artificial intelligence (AI), augmented reality (AR), virtual reality (VR), and blockchain are being implemented more quickly, which will further meet user needs and bring new possibilities for reading experience.

2. User Analysis

2.1 User scale analysis

According to data from Analysys Qianfan, the number of active users of WeChat Reading from January to June 2020 was over 16.01 million, and the overall situation was relatively stable.

WeChat Reading ranks 7th in the digital reading industry. Although it has a large user base and ranks relatively high, the number of active users of WeChat Reading was -6.48% month-on-month, the lowest among the top ten digital apps. It is very likely that the two apps, Fengdu Novels and Midu Speed ​​Edition, have divided the users of WeChat Reading. In terms of the total number of active users, there is still a big gap between it and digital reading giants such as iReader and QQ Reading.

2.2 User Profile Analysis

According to the results of iResearch Qianfan, users of WeChat reading software mainly come from economically developed first-tier and new first-tier regions such as Guangdong, Jiangsu and Zhejiang provinces. Users in these regions have higher consumption levels and higher spiritual needs.

The ratio of male to female WeChat reading users is not much different, but male users account for a higher proportion, reaching 59.75%. The users’ ages are mainly distributed between 24 and 40 years old, among which the largest proportion is users aged 24 to 30. It can be inferred that the users of WeChat reading are generally younger, and most of them are already working office workers.

Judging from the consumption levels of WeChat Reading users, middle and upper-middle consumers account for the highest proportion, totaling 62.49%, while low consumers account for the lowest proportion. It can be inferred that WeChat Reading users have a certain willingness to pay and are willing to invest money in reading.

According to official data from WeChat Reading in December 2019, the peak reading time for users is at 12 noon and 22:00 in the evening, and they are accustomed to reading to pass the time during their breaks. According to official statistics on the distribution of users' ages and reading preferences, as well as the number of books read per person over a long period of time, WeChat Reading users' reading preferences are concentrated on popular published novels, including both popular film and television drama IPs and classic works by famous authors.

Judging from the above data, the users of WeChat Reading are mainly concentrated in young groups such as students and white-collar workers in super first-tier cities and first-tier cities, and they like to read during lunch breaks and before going to bed at night. This group has certain quality requirements for reading, a high demand for knowledge, is more willing to embrace new things, is accustomed to using e-reading, and has a certain willingness to pay.

2.3 User Demand Analysis

2.3.1 Excellent reading experience

The primary purpose of users using reading apps is to read books, so the quality of the reading experience directly determines the user's subsequent use. For reading apps, the interface needs to be simple and clear, without too much unnecessary information. Provide basic reading assistance tools and establish entries to facilitate searching during the reading process.

2.3.2 Complete book copyright

Since users' reading preferences focus on popular novels, more book copyrights of similar categories can be acquired. At the same time when TV series and movies are popular, the original works adapted from IP are recommended on the app.

2.3.3 Satisfactory audiobook experience

Reading a book in its entirety requires a lot of time and energy from users, so many users choose to listen to books to learn about their favorite books. Therefore, in terms of the book listening function, it can provide high-quality sound quality and emotional AI or manual reading to convey the emotions of the work to users and provide users with a more immersive book listening experience.

2.3.4 Promote communication and discussion among users

During the reading process, users will have some ideas and thoughts, and have the desire to share. If users can have an environment where they can share their insights and exchange ideas with others, then their social needs can be met.

2.3.5 Low Price

Digital reading has a lower price threshold than paper books, and users choose digital reading largely because it is more economical and cost-effective. Therefore, the cost of digital reading cannot be too high.

3. Product Analysis

3.1 Product Overview

WeChat Reading is the official reading application based on WeChat relationship chain, and supports both iOS and Android terminal platforms. While providing the ultimate reading experience, it recommends suitable books to users, and users can check the reading status of their WeChat friends, discuss the books they are reading with their friends, etc.

The slogan of WeChat Reading is "Let reading no longer be lonely." In the past, people believed that reading was a private thing, and reading books was more like a lonely process of getting along with oneself. But WeChat Reading broke this inherent perception and interpreted its product positioning - "social + reading". Users can exchange ideas with others during the reading process, learn about their WeChat friends’ recent readings, and find out their own reading time rankings. These features reduce the boredom of the reading process and form a virtuous positive cycle by leveraging users’ competitive psychology.

3.2 Product Development History

• In August 2015, WeChat Reading version 0 was officially launched, positioned as "reading + social" and focusing on the use of WeChat friend relationship chains. The initial library size was not very large.
• From July 2017 to July 2018, we optimized the reading experience, increased the frequency of idea publishing, introduced WeChat public accounts, and enriched the diversity of digital reading.
• In August 2018, WeChat Reading officially launched the unlimited reading card experience function, attracting new users to join WeChat Reading through free high-quality books, thereby reaching and introducing new users.
• On May 4, 2020, the new team of China Literature announced the decision to shut down the limited-time free operation of WeChat Reading for China Literature's copyrighted content. Since then, the free period of WeChat Reading products has come to an end.
• At the beginning of 2021, WeChat Reading announced a partnership with Onyx to launch an ink screen reader, targeting the tens of billions of digital reading market through mutual indexing and extension of software and hardware.
• From 2021 to the present, we support posting in small circles and continue to improve the reading experience.

WeChat Reading was officially launched in 2015 when digital reading was booming. It focuses on serious content and targets WeChat users who prefer to read published books. It quickly captured the digital reading market with its novel social reading method.

In 2018, the "Pinduoduo"-style team-building model was launched to achieve further expansion. Products in different periods have different missions, but there is no doubt that their ultimate goal is to make a profit. After offering a large number of preferential activities in the early stage to attract a certain number of users, WeChat Reading began to think about how to further commercialize in 2020. It first cancelled the unlimited card's right to free reading of some books, and then in 2021 it made major changes to its content ecosystem and launched an ink screen reader that directly competes with Kindle.

In order to allow users to better integrate into the content ecosystem of WeChat, WeChat launched the small circle function, upgrading the story to a look. This not only directly moved WeChat Look to WeChat Reading, but also copied the commercial potential and content ecosystem of WeChat Look to WeChat Reading.

Today's WeChat Reading is obviously no longer satisfied with just dividing users at the reading level, but has the ambition to create the next "search engine".

3.3 Product History Iteration Versions

The table records several major functional iterations of WeChat Reading. The blue font represents the updated functions related to interactive communication, the yellow font represents the launch of key functions, and the black font represents the optimization of basic performance.

As can be seen from the table, WeChat Reading has undergone six major iterations in total, and the focus of its function updates has also varied in different iterations.

Overall, the first three major versions mainly focused on building relationship chains and establishing social relationships, and continuously improving the reading experience of the APP. The fourth and fifth versions mainly focus on filling in content and realizing monetization methods. In the sixth version, we began to focus on community building.

Phase 1: Seizing the market

• In version V1.0, in addition to adding basic functions to improve the reading experience, the main function is to use the WeChat relationship chain to expand the market and create a social reading atmosphere, such as sharing books, checking in with book friends who are reading the same book, sharing ideas to Moments, etc. Through this series of functional iterations, it can help expand the social circle of readers, meet the social needs of users, help retain users, and also facilitate the platform's promotion and acquisition of new users.
• In version V2.0, WeChat Reading delves deeper into the concept of social interaction while also focusing on content and recommendations. While ensuring the basic experience, we have added functions such as radio and audiobooks, added public account reading and comics, enriched the content of the bookstore, and helped attract a large number of users. In addition, large-scale adjustments have been made to the idea circle to make users' secondary creations more contagious and influential, gradually forming a community atmosphere.
• In version V3.0, WeChat Reading continues to improve users' reading experience, while also improving a series of functions to build the community, such as reporting users, liking comments, etc. At the same time, new explorations were made into monetization methods. The original model of exchanging reading time for book coins was changed to one of exchanging reading time for unlimited cards, which laid the foundation for future unlimited card model monetization methods.

Phase 2: Business Transformation

• In version V4.0, we continue to deepen the content experience, such as updating the audio source of voice reading, optimizing story videos, etc., and completely redesigning the bookstore page to further improve the user experience. At the same time, it deepens the impact on the social level, such as using the "Take a Look" function to view the books friends are reading and the content they like. Starting from version 4.0, the "Ideas" in the bottom navigation of WeChat Reading has been changed to "Stories", and the entrance is further tilted towards the recommended information flow of WeChat public accounts, Penguin articles, and videos. It makes recommendations based on your historical reading, and recommends your friends' reading history and interests to you.
• In version V5.0, the Paper Bookstore has undergone a complete revision, and at the same time, it has provided substantial discounts to encourage user consumption, opening up new commercial monetization methods in addition to the unlimited card model. In addition, various new benefits are added for paying members, taking a two-pronged approach to speed up monetization. In addition, optimize the "Circle" page to gradually form WeChat Reading's own communication community.

Phase 3: Return to social interaction

In version V6.0, WeChat Reading shifted its focus back to building social and community, optimizing the circle experience, allowing users to see friends' notes in books, etc., to deepen user stickiness.

3.4 Product Function Structure

The functional structure of WeChat Reading is mainly divided into four modules, namely "Reading", "Bookshelf", "Discovery" and "Me".

3.4.1 In the reading section, there are three main pages: search, recent reading, and friends reading.

• The search bar is set at the top and is equipped with multiple tabs to enable users to find the books they want directly and quickly.
• The recently read page shows the books the user is reading and the reading time, which can retain users to a certain extent.
• Friends' Reading displays the books that "friends" have recently read and have finished reading, which largely satisfies users' social needs and curiosity.

3.4.2 The bookshelf part is the core function of WeChat Reading, which is mainly divided into two pages: bookshelf and book list. There is also a search box at the top, so users can search for content quickly and timely.

The bookshelf page displays all the user's books, and the book list page displays the book lists that the user has collected and created.

3.4.3 The discovery part is the implementation of the main social function of WeChat Reading. It is divided into five sub-pages: "Friends' Ideas", "Small Circle", "Free Books", "Welfare Venue", and "Listening to Books on WeChat".

• "Friends' Thoughts": You can view the thoughts expressed by your friends, or you can express your own thoughts.
• “Small Circle”: A communication community established by WeChat Reading, where users can join different social circles for discussions.
• “Get free books”: Users can get e-books for free through sharing and other means on this page.
• “Welfare Field”: Users can obtain benefits in the form of tasks, which helps to increase the fun of the product.
• "WeChat Audiobooks": Promote and attract traffic for the WeChat Audiobooks APP.

3.4.4 In the My section, users can set some basic information, view personal reading and purchase information, etc.

Summarize:

In general, as a reading software, WeChat Reading has set up many functions to improve the user's reading experience, such as a quick search box, direct access to the bookshelf to read books, searching while reading, and other operations. At the same time, as a reading software that focuses on social interaction, WeChat Reading has set up functions such as likes, follows, comments, and sharing to improve communication during the reading process. It also organizes various activities, such as team card drawing and small circles, to increase user participation and increase the fun of reading.

It is worth mentioning that WeChat Reading has many eye-catching features, such as the shake function on the discovery page. When you click the shake function, the system will randomly recommend a book, which is very useful for users who don’t know what to read. The series of tasks set up in the welfare field can also stimulate users' desire for challenges and provide a place to kill time when users do not want to read books.

However, the recommended content on the homepage only provides book covers, and it is difficult for users to judge whether a book is of interest to them based on the cover and title. When users click on the same type of books multiple times, the recommendation algorithm will recommend more books of the same type, causing users to suffer from aesthetic fatigue.

At the same time, the functions carried by WeChat Reading have become increasingly complex and commercialized during the iteration process, becoming somewhat bloated. The functions that have been launched, such as "Take a Look" and "Small Circles", seem not pure enough, and only a small number of users are willing to post updates in small circles. There is still a long way to go before building a community.

4. SWOT Analysis of WeChat Reading

4.1 Strength

• In terms of product design, WeChat Reading’s interface is simple and clear, and its operation is convenient and easy to use.
• In terms of reading experience, WeChat Reading has added auxiliary functions such as query and handwriting input to the basic reading functions to enhance the user's reading experience, and supports the import of various types of documents, which is very convenient.
• In terms of content, WeChat Reading has a huge amount of book resources and covers a wide range of book categories. It also has a complete IP industry chain, forming a pan-entertainment ecosystem.
• In terms of social networking, WeChat Reading utilizes WeChat’s vast social ecosystem to facilitate readers to share their views and discussions, thus forming WeChat Reading’s own community culture and achieving product publicity and promotion to a certain extent.
• In terms of operations, WeChat Reading adopts a reading time incentive system, forming a virtuous positive cycle through "reading - get unlimited cards - free reading" to improve user retention.

4.2 Weakness

• The AI ​​reading and listening experience is not good;
• The commercial model is single, and the unlimited card does not support free reading of all books, which is disliked by users;
• The reading market is relatively niche, mostly consisting of students with limited spending power;
• The number of active users has dropped significantly month-on-month, making it difficult to retain users.

4.3 Opportunity

• The epidemic has driven the development of the cultural and entertainment industry, and users’ demand for reading has increased;
• With the rapid development of the IP industry, popular film and television programs can drive users to purchase and watch the original works.

4.4 Threat

• The market competition is fierce, and the head effect is obvious;
• The market is becoming saturated, and it is becoming more difficult to acquire new users;
• Low-price and free models are difficult to maintain long-term development.

5. Product pain points and possible suggestions

5.1 Insufficient user stickiness and low retention rate

Since WeChat Reading was launched in 2015, it has been popular among young people. According to statistics from Chan Da Shi, WeChat Reading currently has more than 210 million registered users, and the cumulative number of downloads on the Android system alone has exceeded 1.2 billion. However, iResearch app monitoring shows that the daily active users of WeChat Reading have been on a downward trend since January 2019.

In 2020, after the epidemic era came, the user usage time of WeChat Reading increased by 24.78% month-on-month. However, as the epidemic was brought under control and people gradually returned to work and school, the user usage time showed negative growth month-on-month. Judging from the data, although the total number of WeChat Reading users is large, the stickiness is insufficient.

Possible causes:

• Using social software such as Douyin and Xiaohongshu can make full use of fragmented time, but reading a book requires a lot of time and energy. In the increasingly impatient Internet atmosphere, it is difficult for users to have enough self-control and patience to calm down and read a book.
• According to a survey, 2% of adult citizens prefer to "read a paper book". For people who have the habit of reading, the status of paper books remains unshakable.

Possible workarounds:

• Imitating the playlist-sharing activity of music products, we launched the book list-sharing activity of WeChat Reading. This activity can increase users' interest in reading, and while users are reposting and sharing, it can also increase the coverage of WeChat Reading.
• Invite well-known writers to conduct interviews and Q&A in the "small circle" community. On the one hand, it can enhance the influence of the "small circle" and promote the formation of the WeChat reading exchange community; on the other hand, it can serve as reverse publicity for the WeChat reading brand and increase user activity.
• Users can make their own reading plans, such as reading for one hour every day for 21 days. Users who complete the plan can get unlimited cards/Tencent VIP members/QQ music members for free, so as to encourage users to read.

5.2 Single means of monetization and awkward commercial situation

WeChat Reading’s current profit-making methods are mainly divided into three categories: unlimited card membership, book coin recharge and advertising. WeChat Reading mainly relies on advertising and membership income, so WeChat Reading provides a "Reading" function with the aim of expanding the information flow potential of advertising revenue and shifting highly educated, high-income professional users to the 1.2 billion users of WeChat, but this move did not convince users.

Possible causes:

• Long payback period: WeChat Reading adopts a combination of paid and free methods to realize monetization, but due to a large number of promotional activities in the early stage, it is difficult to quickly increase the member payment rate.
• Mismatch in paying customer groups: Currently, the users of WeChat Reading are mainly highly educated professionals who aim to improve their skills and knowledge. They have a high economic purchasing power, and it is difficult for e-books to differentiate themselves from paper books.

Possible workarounds:

• Organize multiple online and offline activities based on recent hot topics to promote the brand, and at the same time realize commercial monetization through book distribution, course sales, etc.
• Add personalized features in reading and limit these personalized features to unlimited card members to increase the number of members' purchases.
• Create WeChat reading copyright and sell exquisite peripherals such as calendars and notebooks.
• WeChat Reading can provide a short video page, giving users a channel to share and comment on books through videos, and forming its own UGC community. Profit from advertising within the community.

VI. Conclusion

As the mainstay of electronic reading, WeChat Reading is loved by many young people. Its social + reading model is eye-catching and is loved by many young people. The software has a good reading experience and strives to build its own community culture. In terms of business model, it currently only uses two monetization methods: selling books and membership. It does not engage in a series of advertising profits, which to some extent guarantees user retention. However, the current market competition is fierce, and there are many leading e-reading products. Whether WeChat Reading can break through the status quo and achieve new growth still requires further efforts.

Author: Sanribozu

Source: Mikabozu