While WhatsApp chorus whines on, WeChat shows the way

THE tragicomedy of mobile network operators’ war with instant messaging services such as WhatsApp continues, with Vodacom and Orange Horizons joining the chorus singing for regulatory intervention.

At some point, a child will step out of the story of The Emperor’s New Clothes and reveal the truth that is obvious to everyone else: WhatsApp makes no money. Or, at least, not on a scale that would be meaningful to the demands for revenue-sharing.

The last time numbers were revealed, for the first half of 2014, WhatsApp generated a mere $15-million in revenue, making a loss of $232-million. No doubt, they’d love to split that among the operators. Its parent company, Facebook, is a different matter, but the operators are a little less noisy there, given that it is a prime attraction for new smartphone users.

It is ironic that little attention is paid to a newcomer that includes both chat functionality and a robust business model. WeChat, the Chinese social network, boasts 650 million active users, who contribute healthily to the revenue of owner Tencent through in-game and in-app purchases.

At last count, it had about five million users in South Africa. The focus here, as in China, goes beyond instant messaging to business potential.

Just this week, two new services highlighted WeChat’s versatility. By implication, they also show why South Africa’s instant messaging pioneer, Mxit, folded: it couldn’t move the goalposts fast enough from instant messaging to social and business services.

WeChat introduced its Wallet, which allows secure storage of debit or credit cards, and cash or airtime payments within the mobile app. It taps into the rising use of mobile money, using Standard Bank’s InstantMoney to allow electronic transfer of funds to friends and family who don’t have bank accounts.

Standard Bank ATMs and some retailers can be used to refill the WeChat Wallet, and it is integrated with SnapScan, the mobile payment app.

“The service is another way WeChat is merging the online and offline worlds, providing people with seamless payment integration in a single application,” says Brett Loubser, head of WeChat Africa.

The merger of online and offline also featured strongly in another new service.

Rush is a courier aggregation service that runs on WeChat, allowing smartphone users to compare couriers, prices and services and track deliveries.

Glenn Whittaker, founder and CEO of Rush South Africa, is upbeat about its prospects: “Rush is fundamentally going to alter the way the courier business works. There is no need for time-consuming, lengthy paper contracts and waybills, as Rush automates these. It also allows users to transact securely, streamlining the payment process.”

Rush is initially linked to five courier companies: Courier Guy, Courier IT, Skynet, RTT and Globeflight. It offers optional insurance on parcels, underwritten by Hollard Insurance.

The big names start adding up, and emphasise the serious business WeChat has become.

These initiatives join the yearold “micro-jobbing” service, M4JAM, which allows businesses to source paid volunteers, via WeChat, for jobs such as mystery shopping and recording mapping co-ordinates. According to M4JAM founder Andre Hugo, 70 000 people are earning extra income on the platform.

Since these businesses have little impact on the mobile operators, WeChat has yet to attract their opprobrium. This is doubly ironic, given that it is cracking the instant messaging revenue code that has eluded the operators.

Goldstuck is the founder of World Wide Worx and editor-inchief of Gadget.co.za. Follow him on Twitter and Instagram @art2gee