Thoughts on WeChat, and what it means for North America’s digital app market
Note: this is my first Medium article AND my first ever written piece in attempt to analyze an app, and an industry. Feedback is greatly appreciated!
WeChat, Tencent’s mobile application giant, has completely overthrown the daily lives and activities of over 62% of the Chinese population. According to WeChat’s 2016 Data Report, almost 800 million users are actively engaged on their platform for at least 90 minutes a day. A staggering 35% growth from its numbers in 2015, proves that the revolution of what used to be assumed as a simple “social messaging app” is only getting started.
WeChat is currently most popular for 3 features:
- Messaging: this includes stickers, real-time location sharing, sending videos and photos and more features available for users without even leaving the chat screen.
- Digital “Wallet:” users simply have to connect a bank account to their WeChat account. From there, they are able to send/receive “red packets,” pay for goods and services in store through scanning QR codes, transfer money, pay off card bills and more.
- Other in-app connected services: Didi (on-call taxi service), online shops, hotel/flight bookings, etc. These are services WeChat includes on a separate tab in their app, but are provided by third-parties such as Alibaba. However, if your card is connected to their wallet, which if you’re a Chinese phone user would be highly probable, you can pay for these services directly using your WeChat balance.
We can see that these 3 categories are not particularly distinct, and rather stand dependent on the others in order for it to be used effectively and collaboratively by WeChat users. In addition to your wallet being interconnected to all services/shops available on the app, the “red packets” you send within group chats also withdraw money directly from your bank balance.
The key takeaway from this is how much digital cash is taking over in the Asian, specifically, Chinese markets. WeChat has positioned itself very uniquely in the eyes of consumers, making the app a one-stop-for-all by offering services and contacts to everything one could possibly need in all occasions.
Looking specifically at the impact of the “red packets” I mentioned earlier, WeChat creatively allows the user who’s sending the money in the group to select a “customized amount,” or a “random amount.” Having the randomized option invites war (literally).
Since 2014, the crazy group of 800 million people bid, fought and created betting groups on WeChat just for the sake of trading red envelopes. Similar to PayPal, before the user manually decides to transfer the amount of money they receive on WeChat to their bank accounts, they sit in the account balance. Wonder how much Tencent benefited from this right.
The introduction of virtual red packets was absolutely revolutionary. It modernized a lasting Chinese tradition while adapting to the rising digital trend of peer to peer money transfers. The results were so amazing that it pushed Alibaba to step up its game with Alipay, when it began pushing its marketing efforts in red packets for 2015, sending the e-commerce markets of China into an entertaining but atrocious battle between the two most influential tech giants.
Aside from the new year frenzy and virtual gambling groups, WeChat has transformed the way business is done at its core: from its promotions, customer acquisitions, interactions all the way to its payments. As a most recent example, Starbucks has partnered with the giant to officially allow more than 2500 of its storefronts to accept WeChat wallet as a formal currency. Yes, over millions of businesses in China are doing the same to stay competitive, and this is not ground-breaking. But for the average individual who can now purchase groceries from home, bid on the cheapest wardrobe with one-day guaranteed shipping at no additional cost, call a Didi to the nearest Walmart, send his grandma a red pocket while drinking Starbucks… where will he look when he seeks employment? When he starts a business? Advertises for his business? That’s right.
WeChat has replaced everything with the introduction of digital cash. Emails, text messages, and even video games (yes, they have games too!). Essentially, it has cultivated a community. Fitness enthusiasts look to acquire customers by marketing themselves as a gym trainer. Real estate agents create and join community groups where they share their listings in the form of photos and messages. Brick and mortars connect their company cards to a WeChat account just so they can put up QR codes at the POS as a method of payment for customers. WeChat has gradually became the platform to express yourself and connect with others. For avid users, it’s developed into a measurement of success and in fact, the only measurement.
Without diverse apps that separate different use cases from one another, WeChat is killing it in terms of customer data. Furthermore, users are incentivized to use ALL their services. I mean, your friends all go out to eat and one person gets the bill. She says: “I’ll make a group, just WeChat the money back to me.” Now are you going to be the troubling one who chooses not to connect your bank account? The truth is, the second you’re on the app, they’ve sold you on one feature. And that’s exactly how they will sell you on all the rest.
Might as well leave a bottled message and shake it to see who’s nearby. Might as well post that poster or selfie onto your moments.
Moments.
What is moments you ask? Wow. I’m sure you could tell by now that WeChat is so incredible that every special feature could make its own headline. Or app. Or both.
But oh wait, it has. Thank you North America.
In short, Moments takes the quality photos/video sharing aspect of Instagram, the condensed and less ad-bombarded timeline of Facebook, and even the raw ranting honesty of personal Twitter accounts, and streamlines it into one user-friendly and effective news feed. How picture perfect! Even within one singular WeChat feature, it somehow still manages to encompass and fix the flaws that a number of our top social media platforms claim to specialize in.
Are you wondering if WeChat is going to expand? Could you imagine that?!
My perspective is that the Chinese market has been a great success for WeChat partly because of its culture. Since countless centuries ago, the Chinese have lived less balanced lives, where work is the priority in a house. Whether that means education for the children or employment responsibilities for the parents. As opposed to a “work hard, play hard” mindset, us Chinese value our life success based on merit pay, job promotion, and the university ranking that our child attends.
Why?
Because we must hold that manager title to become socially accepted, we must send our child to a prestigious program to be complimented as an accomplished parent. With a culture that aches to be included in an exclusive community, WeChat fits right in.
Not only is this one-stop app a time-saver, but it covers everything that could possibly be ever thought of. As a result, every user only needs to learn how to use the features to run the remaining course of their lives. To run a successful life though, WeChat is often used as a conversation starter, to compare how involved you are in this cult-like community WeChat has built.
“You wanted a new pair of boots right? Store xxx has just launched its new coupons of the week, let me redeem them for you as a present!”
or even something as simple as:
“Oh my god, the new Tuzuki stickers are soo cute!”
Don’t you feel obligated to download the dancing cat gifs now?
In Canada and the States, we focus on the art of specialization. Or at least that’s how we sophistically label it as anyways. We have a main app for chatting (Messenger), business networking (Linkedin), posting quality moments (Instagram), money transferring (PayPal), calling a cab (Uber), chatting up potential hot dates (Tinder) and a dozen more for our various gaming addictions. We tell ourselves we like it that way. Every app represents a separate company dedicated to their specific expertise to ensure that the experience and quality of service is top-notch and nothing less.
I actually asked Ajay Gopel, a senior analyst at BDC at a conference this January on his thoughts of WeChat entering the Canadian markets, as fin-tech startups are on the rise and WeChat Pay is such an established entity within that field (and everything else, actually). I agree with Ajay, that it’s highly unlikely as strong partnerships or at the very minimum, relationships, must be formed with the nation’s banks and financial institutions before even giving expansion a thought. But then again, WeChat could release as a simple messaging or social media app, in an already saturated marketplace with companies struggling to differentiate their offerings, and then slowly increase the number of features it provides. Customer interest would be low and retention of the few would be problematic as WeChat loses its major appeal launching without its best and most well-known features. Moreover, it’s nearly impossible that WeChat would willingly expand to foreign markets to target niche groups, when its growth is exponential and has the potential to reach every phone user in China.
In all, although North American is safe from WeChat enormous expansion, we cannot deny the influence and trend predictions that this app provides to our digital consumers market. Evidently, technology is ever-evolving at a rapid rate, and consumer preferences are constantly changing as a consequence. We must pay close attention to the new features that WeChat brings onboard, simply because their decisions are made based on mass date collected from all ends of the service. We will never see all the companies I mentioned above share their customer preferences with one another. But WeChat already has it all, and by analyzing their moves and choices, albeit the different market demographic, could help advance us further than we think when it comes to adapting new consumer needs and approaching the coming waves of our digital revolution.
By fostering a community that promotes your own business for you, like how WeChat has done, is the best way to grow scalability and brand loyalty.
Thanks for reading :) Hoping to write more in the new year. This was a new style that I’ve never really experimented with.
Let’s connect!
