Wan Hua Tong: Kaleidoscope: YouChat, WeChat, We all chat in China


WeChat is the latest Chinese sensation to go global, writes Geoff Tink from Shanghai.

Some time around the end of 2011, a Chinese friend told me that I had to download a new iPhone application for group messaging.
“What for?” was my response, making a vague attempt to be selective of the apps I add to my home screen.
“Just get it.” was the short command that put an end to our brief debate.
Almost all trends are built on such initially flimsy logic, so I opened the Apple iStore and commenced my download.
The app was “WeChat” or “微信” (Weixin), a text and voice messaging service launched in January 2011 by China’s largest web developer, Tencent.
In the past 12 months, a variation of that exact conversation has taken place over 200 million times around the world. In December, WeChat announced that it had been downloaded in Android or iOS format by over 220 million smart phones in over 30 countries. That’s double the uptake six months earlier. WeChat is now the next big thing in mobile services in Asia.
On face value, WeChat offers nothing particularly revolutionary. There are a range of basic features, including text messaging, voice messaging, voice calling and high definition video calling. The layout is simple and the aesthetics are nice. Not boring and minimal clutter (not common for a Chinese app, it must be said). Imagine a more fun version of WhatsApp or Skype. Essentially, WeChat does the basics well.
However, a closer look at a tab labeled “Social” reveals a range of other interesting features that really start to set WeChat apart from the competitors.
There is “Moments” where users can keep a basic photo blog and follow their friends. There is “Drift Bottle” where users can send and collect messages (in a bottle) from random users around the world. Then there is
“Look Around” where users can find other users in their vicinity. All of these functions can be turned on or off depending on the users requirements.
For a foreigner visiting China, the social media sector is sometimes one of the most confusing. China could be described as the Galapagos Islands of the internet, where weird and wonderful sites have evolved and developed in complete isolation. Facebook, LinkedIn, YouTube and MySpace have little or no presence in China. Instead, a range of local competitors reign supreme with hundreds of millions of users; Weibo, Youku and QQ. Now, for the first time, a social networking platform from China is making its mark on the global marketplace.geoff_wechat02_web
For a Chinese creation – and I am placing the emphasis on “create” – to make an impact overseas is no small feat. Smaller Chinese apps like UC Browser or Camera360 have made inroads in competitive overseas markets before, but never like WeChat.
At the end of November 2012, WeChat was the most popular social networking application on the Apple iStore in six markets; Taiwan, Hong Kong, Vietnam, Argentina, Thailand and Brunei. In total, WeChat ranked in the top 10 of social networking downloads in 43 different markets. The number of international users is now closing in on the number of users in China.
How has this growth taken place? A traditional impediment to the growth of Chinese social networks overseas has been a lack of translated interfaces. WeChat is now available in a range of European languages, such as English, Spanish, Italian, Portuguese, Polish and Russian. Noticeable absentees are French and German, highlighting a slight emphasis on southern and eastern Europe.
But a quick look at the wide range of Asian languages quickly identifies the region as a strategic focus. Aside from the obvious simplified and traditional Chinese options, WeChat is available in Japanese, Korean, Vietnamese, Thai, Bahasa Indonesia and Bahasa Melayu. Arabic has also been added, and reports say Turkish will be next. WeChat is focusing on the world’s fastest growing internet markets – their logic is that the developed markets will follow.
But expansion takes more than just an application translated into a wide range of languages.
To gain leverage in the wider Asian market, WeChat has been increasing visibility through partnerships with a wide variety of regional celebrities and local distributors.
The Chinese version of the television programme, The Voice, has even registered an account.
Tencent executives have identified that the US market is on the radar. And to continue this strategy stateside will require deep pockets.
A clear advantage for WeChat has been the support of Tencent, a US-listed company with a Silicon Valley presence and reported Q2 2012 revenue of US$1.7 billion. As China’s largest web developer and with the income gained from the half a billion users of its hugely popular social networks QQ and QZone, Tencent has been able to throw significant resources into research, development and expansion of WeChat. The clout of Tencent’s billions has given WeChat a leg-up on its rivals, many of which are smaller startups with a more urgent need to monetise their product and satisfy divergent needs of outside investors.
Nonetheless, Tencent has still been taking inevitable steps to monetise WeChat – though rather than charging individual consumers, the focus has been on leveraging commercial potential. In November, Pony Ma, Tencent’s Chairman and Chief Executive Officer, stated that entertainment, advertising and transactions were the focus areas for WeChat. Then in the same month, the General Manager of Tencent’s online payment division Tenpay, Jim Lai, declared that Tencent would add payment services to WeChat within two months.
Early reports indicate that users will be able to scan codes using the smartphone camera, then make purchases via WeChat linked to Tenpay through a plug-in. But this is just one of the more obvious ways that Tencent can generate revenue from WeChat. Brand advertising is another.
WeChat users can choose to follow any other feed, so Tencent has allowed brands to register an account and then push updates to those users that choose to ‘follow’ it, essentially creating an optional direct marketing system. Using the “Look Around” functionality, users can be invited to follow a brand account when they pass by a commercial WeChat broadcast device. This all serves to create a more personal feel to brand communication.
And many brands are now in the early stages of discovering this potential. Nike, Cadillac, Starbucks and the NBA have started brand accounts and begun to gather fans through associated incentive programmes. It is this relevance to multinationals that further sets WeChat apart from WhatsApp and Skype – and in the eyes of analysts, makes it a very viable competitor in the US market.
So what about Weibo, the poster child for social networking in China? The two most popular mobile applications are not in direct competition, since Weibo is a public network where users share information publicly, while WeChat is a private network with users sharing information privately. Nonetheless, consumers only have a limited amount of time to spend online each day. WeChat is taking a larger slice of this time – and the competition is heating up.
With a larger stream of gaming revenue, Tencent has access to an estimated US$3.7 billion in cash annually, compared to roughly US$700 million at Weibo’s parent company Sina. With a cooling economy expected to lead to a slow down in advertising revenues forecast for the industry, this places Tencent in a better position.
However, money does not buy influence.
The strength of Sina Weibo is still its pool of influential users. All the celebrities and almost all the major brands have a presence of Sina Weibo. WeChat does link to Tencent’s own version of Weibo (“weibo” is the translation of “microblog”, and not a trademark) and users may gradually migrate across, but this remains a little more than a long-term possibility.
The message for your business? Watch this space. Both Weibo and WeChat offer unique marketing opportunities. Weibo is still the more obvious choice for branded social networking, but with a greater presence around Asia, a more innovative interface, and less competition to have your message heard, the greater relative gains probably reside with WeChat.
So, 14 years after their birth on the banks of the Pearl River Delta, in a region more renown for manufacturing than innovation, Tencent may be on the verge of something truly great – genuine creativity with a global impact.
WeChat is a Chinese social networking application that has the design, functionality and financial clout to make it overseas. Quoted in China Daily recently, Duncan Clark, Chairman of BDA China, noted that WeChat “looks and feels ‘international’ – there’s really no way of knowing that it is a ‘made in China’ app.”
And that is where WeChat makes its mark – taking the next step from made in China, to “created” in China. 


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