US WeChat Ban Set To Hit Retail Suppliers
Australian retailers, distributors and big brand suppliers could be impacted by the US President’s decision to ban the popular WeChat app that is used by billions in China to communicate.
US President Trump has with the stroke of a pen opened up a new front after initially taking on Huawei.
The move could see the app removed from both the Apple and Google Stores.
The only problem is that Australian suppliers to retail could be swept up by the move with the Australian Government currently being pushed to also support the US ban.
WeChat, which has more than 1 billion users and is owned by Tencent Holdings Ltd., it is heavily relied upon by suppliers who have to deal with manufacturers and logistic Companies in China.
Several distributors who deal with Harvey Norman, Big W, JB Hi Fi and The Good Guys employ staff from China who spend their day using WeChat to communicate with their suppliers in China.
Nearly every major consumer brand with business in China is deeply intertwined with Tencent and its network, which includes WeChat and investee JD.com.
The U.S. president’s move to ban the Chinese-owned TikTok and WeChat in just over six weeks from now sent shockwaves through the tech industry and the many global businesses who rely on the apps to sell goods in China.
The decision also spurred alarm on Chinese social media, with WeChat users worldwide and in Australia posting contact information so friends and family could reach them if the app disappeared.
An online forum popular with stock investors asked users if they would give up their iPhones or WeChat if Apple eliminated the app from its store: They voted to ditch their phones by a margin of 20 to one.
Bloomberg claimed that of all Trump’s shots against China, from imposing tariffs to battling Huawei Technologies to ending Hong Kong’s special trading status, the executive orders against WeChat potentially have the widest impact.
Beyond the financial blow, they threaten to sever communication links among the people of the world’s biggest economies in addition to spurring a decoupling of the tech industry that could ripple around the world.
Jason Gui, co-founder of San Francisco-based start-up Vue Smart Glasses, said his team has to rely on WeChat to communicate with suppliers in China and a ban would be very “disruptive.” Emails sent to manufacturers in China are often unanswered for days, whereas inquiries through WeChat will get immediate attention, he said.
“When the U.S. imposes these bans, they may not realize how intertwined the relationships between U.S. and China have become,” he said. “Our communication lifeline with China depends on WeChat. It hurts small businesses that have limited resources to figure out how to circumvent these bans.”
After TikTok was banned the Company threatened legal action following President Trump’s late-night executive order banning transactions beginning in 45 days between American firms and the Chinese parent company of the popular social media app.
In an unsigned blog posted on its website, TikTok said that it was “shocked” by the president’s order, which it said was “issued without any due process.”
“For nearly a year, we have sought to engage with the US government in good faith to provide a constructive solution to the concerns that have been expressed.
“What we encountered instead was that the Administration paid no attention to facts, dictated terms of an agreement without going through standard legal processes, and tried to insert itself into negotiations between private businesses,” the company said.