Life changer: We are, there­fore WeChat

What started as a so­cial me­dia app pro­vid­ing in­stant com­mu­ni­ca­tion has be­come in­dis­pens­able for mil­lions, and re­port.

China Daily (Canada) - - ANALYSIS -

Shayne Rochfort is an Aus­tralian who lives in Thai­land, but the com­pan­ion he re­lies on daily to sur­vive so­cially and pro­fes­sion­ally is nei­ther Aus­tralian nor Thai; it is Chi­nese — the phe­nom­e­nally suc­cess­ful mes­sag­ing app WeChat.

Rochfort, who has lived in the Thai city of Chi­ang Mai for six years, started us­ing the app in 2013 and said he has more than 2,000 con­tacts listed on it.

He is just one of 650 mil­lion monthly ac­tive WeChat users world­wide who have seen the trans­for­ma­tion of what started as lit­tle more than a handy piece of soft­ware to help friends stay in touch into an in­dis­pens­able tool now used to do all man­ner of com­mer­cial trans­ac­tions and that has joined the arse­nal of weapons that com­pa­nies de­ploy to help their busi­nesses grow.

Rochfort said WeChat has been in­valu­able in pro­mot­ing his travel book China to Chi­ang Mai, whose Chi­nese ver­sion will be on sale in China soon. “I of­ten use the Peo­ple Nearby func­tion (of WeChat), to meet trav­el­ers in Chi­ang Mai,” he said. “When they add me (to their list of con­tacts) I usu­ally send out the food sec­tion of my book and a one-day trip plan­ner, so peo­ple know how to get around Chi­ang Mai.”

WeChat also al­lows users to chat with one an­other ei­ther by au­dio or video, and Rochfort said he has found the app’s abil­ity to trans­late text into other lan­guages, in­clud­ing Thai, a great help and a valu­able learn­ing aid.

With WeChat, which was launched in 2011, users — as long as they have an In­ter­net con­nec­tion — can dis­play pic­tures, video and writ­ten ma­te­rial that they think con­tacts may find in­ter­est­ing.

They can book taxis, buy bonds, shop, or­der food and al­most any­thing else and pay for all th­ese things by link­ing the WeChat ac­count to a bank ac­count. Ac­counts can be set up by in­di­vid­u­als or cor­po­rate en­ti­ties.

The first re­search re­port about WeChat, is­sued by its owner Ten­cent late last year, said that In­ter­net use of WeChat gen­er­ated 95.2 bil­lion yuan ($14.6 bil­lion) in rev­enue; and 11 bil­lion yuan worth of daily con­sump­tion items were bought.

The news­pa­per USA To­day said re­cently that What­sApp, a pop­u­lar com­mu­ni­ca­tion app in the West, now has 900 mil­lion monthly ac­tive users; Twit­ter has a lit­tle more than 300 mil­lion monthly ac­tive users; and In­sta­gram, the photo and video shar­ing app that Face­book owns, also has about 300 mil­lion.

Mo­bile Mes­sag­ing Apps: Global User Fore­cast, a re­port by eMar­keter, a dig­i­tal in­dus­try re­search firm, said more than 1.4 bil­lion con­sumers world­wide were ex­pected to use a mo­bile mes­sag­ing app last year, and it fore­cast that the num­ber would grow to 2 bil­lion by 2018.

A re­cent Forbes ar­ti­cle fore­casts that the num­ber of av­er­age monthly users of What­sApp would rise to nearly 1.3 bil­lion by the end of 2020. It also es­ti­mated that What­sApp’s av­er­age rev­enue per user would be about $4 by 2020, which could yield rev­enue of about $5 bil­lion in 2020.

WeChat has a far wider range of

Age

Monthly us­age

43.2%

3.9% func­tions than an in­stant mes­sag­ing app and it dif­fers from Twit­ter and Face­book, whose con­tent can be made avail­able to very large au­di­ences, in that com­mu­ni­ca­tions are usu­ally re­stricted to in­di­vid­u­als who know one an­other. Ex­cep­tions to this are its Peo­ple Nearby and Shake func­tions that al­low users to make con­tact with strangers.

Charles-Edouard Bouee, global CEO of the con­sult­ing firm Roland Berger, said that WeChat brings to­gether the fea­tures found in other apps. “WeChat is like What­sApp, Skype, In­sta­gram and Face­book all in one, with an in­cluded pay­ment op­tion and a ser­vice that al­lows for real-time lo­cal­iza­tion and find­ing friends nearby. In my view, the de­vel­op­ers of WeChat have man­aged to com­bine the strengths and ser­vices of var­i­ous dif­fer­ent apps all in one. This is what I call ‘flat to fast’, a flat re­com­bi­na­tion of ex­ist­ing tech­niques into a very pow­er­ful tool.”

Kirk Wil­son, ex­ec­u­tive di­rec­tor of the China-Bri­tish Busi­ness Coun­cil (China), said that al­most all Bri­tish govern­ment de­part­ments and com­pa­nies have WeChat of­fi­cial ac­counts, and al­most all se­nior ex­ec­u­tives of Bri­tish com­pa­nies in China have per­sonal WeChat ac­counts. The coun­cil has more than 900 mem­bers com­pa­nies in China, of which about 70 per­cent are Bri­tish com­pa­nies, and 20 per­cent are Chi­nese.

“Chi­nese WeChat is very good for the fi­nal con­sumers in terms of con­ve­nience; it is very con­ve­nient that you can do all the ap­pli­ca­tions with the wal­let, all kinds of things.”

Stefan Sack, founder and chief ex­ec­u­tive of the Hong Kong con­sult­ing com­pany SinEuSyn, said: “WeChat is so present in Chi­nese con­sumers’ hands that it is im­pos­si­ble not to use it as a com­pany. Even in busi­ness-to-busi­ness the no­ti­fi­ca­tion of events, prod­ucts, fairs, etc is some­thing ev­ery­one needs to do now.”

He of­ten uses the WeChat Mo­ments to let oth­ers know about work events and so­cial hap­pen­ings, and to en­cour­age ex­changes, he said.

How­ever, WeChat’s ease of use does have at least one down­side, and that is that staff are prone un­wit­tingly to pass on com­pany in­for­ma­tion that is com­mer­cially sen­si­tive, and they need to be ed­u­cated in this re­gard, he said. Ease of use also means that some­times the qual­ity of in­for­ma­tion dis­sem­i­nated is not of the stan­dard that it ideally should be, he said.

Tommy Tang, a pro­ject man­ager with Roland Berger Strat­egy Con­sul­tants, said the app of­fers var­i­ous kinds of com­mer­cial func­tions for com­pa­nies, such as open­ing WeChat shops. The for­ward­ing of prod­ucts or in­for­ma­tion on WeChat Mo­ments can be highly in­flu­en­tial with mouthto-mouth pro­mo­tion, he said.

The one-time re­lease of an ad­ver­tise­ment in the WeChat Mo­ments sec­tion can cost mil­lions of yuan. A com­pany in Shang­hai has built a third-party plat­form named Weimob that of­fers mar­ket­ing and pro­mo­tional

Oc­cu­pa­tion

19.7% ser­vices to com­pa­nies based on WeChat.

“WeChat’s com­mer­cial­iza­tion forms are quite dif­fer­ent to those of oth­ers and are very flex­i­ble for com­pa­nies,” Tang said. “They can do things that are very sim­ple and things that are very com­plex. The use of WeChat for pro­mo­tions is a must for com­pa­nies. It is the most ac­tive so­cial me­dia plat­form in China, and com­pa­nies can tai­lor ad­ver­tis­ing and pro­mo­tional cam­paigns on WeChat in ac­cor­dance with their strengths and needs.”

Lyu Ronghui, a re­searcher with iRe­search Con­sult­ing Group, said WeChat is one of the most im­por­tant pro­mo­tional plat­forms for com­pa­nies that want to ad­ver­tise and to en­gage in brand build­ing. It is not just a mat­ter of pro­mot­ing its brands, but more im­por­tantly of reach­ing in­di­vid­u­als so that they form pos­i­tive re­la­tion­ships with brands and in turn in­flu­ence buy­ing de­ci­sions.

But WeChat is still lim­ited in the way it car­ries ad­ver­tise­ments and pro­mo­tional ac­tiv­i­ties, she said.

“Com­pa­nies are cer­tainly keen to pro­mote their goods and ser­vices through WeChat a lot more, but that would have an im­pact on the WeChat user ex­pe­ri­ence, and there is a re­luc­tance by WeChat’s own­ers to al­low that to hap­pen. But they do want to find ways to help com­pa­nies build pro­mo­tional chan­nels.”

The emer­gence and suc­cess of WeChat has come on the back of the growth of the mo­bile In­ter­net.

“This has also re­sulted in changes in the way peo­ple so­cial­ize and in the way com­pa­nies pro­mote their prod­ucts and ser­vices. As the mo­bile In­ter­net has made hand-held devices, one of the chief tools that peo­ple use in deal­ing with oth­ers, in­clud­ing busi­nesses, in­di­vid­u­als have be­gun to de­mand tran­si­tions that are faster and more fun, and com­pa­nies have be­gun to de­mand closer re­la­tion­ships with con­sumers and greater ef­fi­ciency.”

Ren Chao, a re­searcher with the In­ter­net con­sul­tancy Analysys In­ter­na­tional in Bei­jing, said that the im­por­tant thing for big In­ter­net com­pa­nies is build­ing an eco-sys­tem, and WeChat is build­ing that based on the mo­bile In­ter­net. WeChat is likely to be re­placed only when hand­held devices are sup­planted by other kinds of elec­tronic ter­mi­nals such as glasses and watches, and even un­manned aerial ve­hi­cle, he said.

WeChat, like Face­book, needs to pay a lot of at­ten­tion to the user ex­pe­ri­ence, he said, and as long as it in­no­vates it will con­tinue to be pop­u­lar.

WeChat’s over­seas mar­ket has ex­panded greatly since 2011, and it now has more than 200 mil­lion users out­side China. Nev­er­the­less, China re­mains by far and away the app’s most im­por­tant sphere of ac­tiv­ity.

In Africa, Ten­cent has teamed up with Naspers, the con­ti­nent’s largest me­dia com­pany, to in­tro­duce WeChat, and it is es­ti­mated to have about 6 mil­lion reg­is­tered users in South Africa al­ready, the Fi­nan­cial Times re­ported re­cently.

WeChat is also widely used by univer­sity stu­dents learn­ing Chi­nese and busi­ness peo­ple de­vel­op­ing ties with their Chi­nese part­ners.

The eMar­keter re­port said that WeChat ranked among the top three mes­sag­ing apps last year in the Chi­nese main­land, Hong Kong and Malaysia. It tends to be pop­u­lar in coun­tries with a size­able Chi­nese pop­u­la­tion, but has gone main­stream only in a hand­ful of mar­kets out­side China. What­sApp was listed among the top three mes­sag­ing apps in 34 coun­tries, and it ranked No 1 in 26 coun­tries.

The re­port said that a pop­u­lar chat app in one coun­try may not even be on the radar in an­other. The qual­i­ties that make a chat app pop­u­lar in a lo­ca­tion — cul­tural nu­ances, coun­tryspe­cific fea­tures and app ca­pa­bil­i­ties and word-of-mouth mar­ket­ing — do not al­ways trans­late to the global stage, which has made it dif­fi­cult for some apps to ex­pand be­yond their home coun­try or re­gion.

“WeChat hasn’t done much good strate­gic mar­ket­ing over­seas yet, but its strength is about mak­ing good prod­ucts, so it will make its ef­forts to ex­pand the mar­ket,” Ren said.

Kirk at the China-Bri­tish Busi­ness Coun­cil said WeChat is like 10 com­pa­nies to­gether, which can be a good thing and a bad thing. In de­vel­op­ing coun­tries, many com­pa­nies may be able to work with WeChat, but in de­vel­oped coun­tries, peo­ple would prob­a­bly pre­fer to have in­di­vid­ual apps for dif­fer­ent func­tions, rather than one com­pre­hen­sive plat­form.

“The good thing about WeChat is that you have ev­ery­thing on one plat­form, but it could also be a bad thing for Ten­cent to go abroad. I think they will strug­gle in Europe and the United States, be­cause peo­ple like their in­di­vid­ual apps and have a lot of choices. So they need to work out a way to be much more flex­i­ble and let other com­pa­nies par­tic­i­pate in the ecosys­tem. But there are sim­i­lar mar­kets in which peo­ple would like it very much, such as In­dia and Mex­ico.

“WeChat has been mostly de­vel­oped based on Chi­nese users’ habits, and if they want to ex­pand over­seas, it has to be tai­lor-made for over­seas users. But for com­pa­nies or brands that want to come to China, they need this plat­form.”

WeChat is like What­sApp, Skype, In­sta­gram and Face­book all in one, with an in­cluded pay­ment op­tion.”

global CEO of the con­sult­ing firm Roland Berger

Con­tact the writ­ers at cheny­ingqun@ chi­nadaily.com.cn and suqiang@ chi­nadaily.com.cn

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