China's first online insurance firm, ZhongAn Online P&C Insurance Co Ltd, started selling policies in December that help exempt small-cap virtual merchants from registration fees.

The policy is applicable to the 9 million individual vendors on Taobao, where they can buy insurance starting from 18 yuan as a waiver of the 1,000-yuan registration premium, said Li Jian, who oversees ZhonAn's product designs.

By the end of last year, 60 insurance firms in China had expanded to online sales channels, up 46 percent from two years ago, according to a report published by the Insurance Association of China on Tuesday.

Premiums climbed to 29.1 billion yuan from 3.2 billion during the same period, up 202 percent year-on-year.

The Internet has added a cost-effective distribution channel for insurance brokers, according to Zhou Xiye, regional vice-president of global health benefits for Cigna and CMC Life Insurance Co.

"Those destined for success offer single products on a single site, commit to the direct marketing formula, take ownership of the technology and leverage the database-building abilities of the Web," Zhou said.

WeChat's tailor-made products encapsulate the e-commerce, mobile and social networking features in a nutshell, said Zhang Meng, an analyst with consultancy Analysys International.

"It's so personal that brands are experimenting with creating compelling content to allow brands into their inner circles," said Zhang.

Tied to users' phones, WeChat raises social interaction to a higher level, with functionalities such as voice-messaging and location-based services, according to an annual study on China's social media landscape by social business monitor CIC.

It described WeChat as a customer relations management magnet that allows marketers to face their consumers, develop online-to-offline strategies and target their preferred audience.

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