New What­sApp on block

China’s WeChat moves into low-bud­get Africa

Weekend Argus (Saturday Edition) - - LIFE - TIISETSO MOT­SOE­NENG

WECHAT, China’s big­gest in­ter­net-based mo­bile mes­sag­ing plat­form, is scram­bling for a piece of the African mar­ket.

The move is lead­ing the South Africa-China joint ven­ture down a com­pet­i­tive path as Facebook’s What­sApp is part of the so­cial me­dia fab­ric in most African coun­tries.

The out­come could help de­ter­mine who can turn the ex­po­nen­tial growth in on­line mes­sag­ing ser­vices into prof­its.

What­sApp is used more widely but WeChat is bet­ting an ar­ray of ser­vices that in­clude money trans­fers, pre­paid elec­tric­ity and air­time and its ex­pe­ri­ence in sell­ing prod­ucts to lower in­come users in China will loosen the Sil­i­con Val­ley grip.

Launched in Africa in 2013 by China’s In­ter­net gi­ant Ten­cent and its 34 per­cent share­holder South African e-com­merce and me­dia group Naspers, WeChat Africa is a rare south- south cor­po­rate part­ner­ship to ex­pand on the con­ti­nent.

The joint ven­ture is fac­ing an up­hill bat­tle in tak­ing on What­sApp, which of­fers free text, pic­ture and video mes­sages and whose adop­tion in big African mar­kets such as South Africa was light­en­ing- fast be­cause texts over a phone net­work are still ex­pen­sive.

A 2015 study by World Wide Worx, a Jo­han­nes­burg con­sul­tancy, showed What­sApp had just over 10 mil­lion users in South Africa com­pared with just over 5 mil­lion for WeChat.

But What­sApp, ac­quired by Facebook in 2014 and which has a long-stand­ing prom­ise to keep the plat­form ad-free, has no im­me­di­ate plans to make money out of the ser­vice in Africa, Facebook Africa said.

A spokesper­son said What­sApp is the No 1 mes­sag­ing plat­form in South Africa, Nige­ria and Kenya.

“You could ar­gue that WeChat is pulling ahead in mon­eti­sa­tion ef­forts but What­sApp guys can do any­thing us­ing their num­bers. It’s all about who’s got num­bers,” ICT an­a­lyst Si­bonginkosi Nyanga a fund man­ager at Mo­men­tum SP Reid said.

What­sApp is test­ing mak­ing restau­rants, air­lines and credit card firms pay to contact con­sumers. There are parts of Africa where WeChat is al­most un­known whereas What­sApp is ev­ery­where from Namibia to Niger.

“I used to have a WeChat ac­count but I deleted it be­cause you will find vir­tu­ally no­body to chat. With What­sApp, there are no com­pli­ca­tions, it’s sim- ple and all my friends use it,” said Nku­l­uleko Mabuza, a 24- year- old so­cial worker in Tza­neen, a large town 400km north of Jo­han­nes­burg.

Loub­ser said WeChat is all about mak­ing it eas­ier for users with a suite of fea­tures to or­der food take- aways, shop on­line, search for jobs and trans­fer money with­out hav­ing to leave the in­ter­face.

“We looked very care­fully at what the plat­form can achieve be­yond just mes­sag­ing be­cause peo­ple use prod­ucts when there’s value for them,” he said.

Last year WeChat launched mo­bile money ser­vices, or WeChat Wal­let, which al­lows users to store bank cards and with­draw cash at the auto- mated teller ma­chines (ATM) of a part­ner, Stan­dard Bank.

The suc­cess of tele­coms op­er­a­tor Sa­fari­com’s mo­bile money ser­vice M- Pesa in Kenya has con­vinced in­vestors and ex­ec­u­tives con­ver­gence of fi­nan­cial ser­vices and mo­bile phones of­fers growth op­por­tu­ni­ties.

The logic of us­ing cell­phones to ac­cess fi­nan­cial ser­vices in sub-Sa­ha­ran Africa is ob­vi­ous: For ev­ery 100 000 peo­ple there are at least four bank branches and five ATMs but more than 700 cell­phones.

Ear­lier this month WeChat part­nered with Stuff, the word’s best-sell­ing gad­get and tech­nol­ogy mag­a­zine, and a unit of house­hold goods re­tailer Stein­hoff to launch a pay­ment fea­ture that al­lows WeChat Wal­let users to scan a bar­code along side a prod­uct in the mag­a­zine.

Rid­ing on Naspers’ pay-tele­vi­sion mo­nop­oly across Africa WeChat can also be used to cast votes for pop­u­lar re­al­ity shows such as Idols and Big Brother.

Naspers chief ex­ec­u­tive Bob van Dyk ad­mits the num­ber of WeChat users has not reached a level that would make the plat­form’s col­lec­tion of fea­tures main­stream. “Be­cause there is so much com­pe­ti­tion for the chat prod­uct you need a cer­tain au­di­ence en­gage­ment be­fore any of those other prod­ucts can be­come main­stream.” – Reuters


WeChat is seek­ing to cap­i­talise on the re­gion’s vast low-bud­get mar­ket.

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