Tencent’s Mini Programs has potential to displace App Store

Inc’s biggest competitor in China isn’t Xiaomi Corp or Huawei Technologies Co. It’s Tencent Holdings Ltd.

Industry observers have known for a while that Tencent’s WeChat, including its Mini Programs platform, has the potential to displace the App Store. And its OS-agnostic nature means that users can easily swap from device to device, even across operating systems.

Now the company seems set on building out the long tail, maximising value beyond mainstream usage of its core products.

At its annual WeChat conference recently, Tencent executives took the stage to outline their business and development plans. On the agenda was its strategy for building out Mini Programs — a service that allows third-party developers to run scaled-down apps on top of WeChat’s instant messenger.

Niche apps within WeChat, such as those used by a parentteacher group or neighbourhood grocery store, accounted more than half of total Mini Programs traffic, Daiwa Capital Markets analysts John Choi, Candis Chan and Robin Leung wrote in a note after the event in Guangzhou.

Being able to find these apps was a key issue, so Tencent was working on ways to improve this, the analysts wrote. The company is creating developer and management tools to make it easier to build these apps, and will ramp up monetisation of Mini Programs.

“Just build a good Mini Program, and we’ll do the rest,” said Tencent executives.

With WeChat itself nearing peak penetration with 1.1 billion monthly active users, Tencent needs to go deeper to keep growing. It’s nailed the big-ticket items — chat, pay, and online-tooffline services — so now it must hunt for niches.

What makes Tencent’s Mini Programs even more powerful is the fact that everybody in China uses WeChat, and it seamlessly integrates with the core functions of the Tencent messenger.

The key to leveraging this long tail will be Tencent’s recent shift toward industrial and enterprise use.