or, Messaging Platform Cross-Pollination is Good: 5 things to learn from WeChat.
The NYT recently produced a video describing how WeChat points the way to how messaging platforms can change our lives in the future. The Economist chimed in and highlighted a ‘Galapagos Island’ effect in the development of the technology ecosystems of China and the West. While each positioned it as “going back in time” when you go from using WeChat to a Western messaging platform, the reality is both ecosystems are bustling with innovation and can serve as inspiration for each other.
In the West, with a focus on AI, machine learning, natural-language processing (NLP) and natural-language understanding (NLU), the tech giants are all developing personal agents/bots to help augment human abilities. Amazon’s Alexa as the foundation block for a future IoT ‘room computer’ and Snapchat’s innovations around augmented reality / filters are just two examples of unique innovation that can inspire companies in China.
There are opportunities to be had, for those not only looking to adapt innovations in the West to China, but also the reverse in understanding and adapting WeChat innovations for the West. The first step in doing this is to properly understand the WeChat phenomena in China (there is a remarkable amount of misunderstanding!) and then look for potential ways to apply lessons from that market.
- There are very few bots in China.
While there are over 10,000 official accounts for organizations in China (similar to a Facebook page, but only available on a mobile device), the vast majority are menu-driven, not bot-driven. Where bots do exist they tend to be very shallow and only react to very specific keywords.
For example, the screenshot above is from the McDonald’s official account on WeChat. After you follow this account you are greeted by a welcome message and prompted to enter one of 4 keyword commands, call a telephone number or visit a website. At the bottom of this official account app, there is a fixed menu that will launch new content within the messaging thread or an HTML5 page within the WeChat web browser.
Kik’s CEO Ted Livingston recently referred to this design pattern as facilitating ‘instant interactions’, rather than conversational bots.
Takeaway: While there are some free-form chatbots in China (e.g. Xiaobing Microsoft’s precursor to Tay, Chumen Wenwen, etc.), the vast majority of official accounts simply react to one-word commands at best.
2. Discovery is often done offline.
Earlier this Spring at a peak of ‘bot euphoria’, one of the proposed advantages of bots over apps was the problem of app discovery. The reality is that bot discovery is just as bad, if not worse, since bot directories are underdeveloped and users are not used to searching for bots.
In WeChat, official accounts are often discovered and followed ‘in context’ usually through QR codes.
On print media:
On physical products:
And, even at physical locations:
In China, you can also scan a QR code at many locations to use your WeChat account to login to public WiFi. During this process, you are also presented with the option to follow the official account for that organization.
Finally, when you make a purchase with WeChat Pay you will be prompted to follow that organization’s official account as well.
It has been argued that QR codes only took off in China when WeChat introduced them as a way to share contact info. Facebook, Snapchat and Kik are all pushing in this direction, but market fragmentation and different standards are likely to slow adoption.
Takeaway: Don’t count on bot directories to drive engagement. Get out in the real world and provide value to end users in context!
3. More than 400m people use WeChat Pay
Stop and appreciate that for a second. That is huge. Scale in China is often difficult to wrap one’s head around, but that is 40x more penetration than Apply Pay with quicker adoption. China never really had wide-spread penetration of credit cards, which most people in the US feel are ‘good enough’. This has set the stage for a classic case of leap-frogging. Connie Chan recently described a number of factors that drove adoption in her must-read piece ‘Money as Message’, but the reality is it is now mainstream to use your phone to make quick payments, transfer funds, make investments and even send cash gifts in ‘red packets’.
In the shops of Shanghai, it is common to be asked “WeChat Pay or Alipay (WeChat’s mobile payment competitor)?” rather than “Cash or card?” when sales staff inquire about how you intend to pay. In just a few months, the very fact of paying with cash almost makes one feel backward. The big question is what happens next?
Takeaway: The trust the average consumer has placed in WeChat Pay is remarkable. Expect an explosion of innovation in the payments space in China. 💣
4. Payments are becoming a hub for other services
With WeChat Pay becoming mainstream it is becoming a platform for other services.
Membership Cards & Coupons
Membership cards and coupons are directly integrated within WeChat. If you use your WeChat Pay account, it seems perfectly natural for your loyalty/membership card to be automatically updated when you make a purchase. Coupons can be discovered and saved for offline use encouraging real-world visits with the motivation of an expiry date.
‘Online-to-Offline’ (020) Services.
‘WeChat-on-your-phone-as-your-wallet’ enables you to conduct common payments (e.g. paying the utility bill) in addition to directly purchasing a variety of third-party services (many in which Tencent is an investor). This concept of an ‘app within an app’ or ‘micro-service’ is quite common. Uber’s integration within Facebook Messenger is a good harbinger of what to expect from this trend in the future.
There are a number of large third-party services that are built upon WeChat providing e-commerce, customer support, and customer relationship management. Companies, such as Weidian and Youzan help retailers build shops within the context of their official accounts. In the West, Shopify integrated with Facebook Messenger, but only in terms of customer support, e-commerce stores and transactions are still outside of FBM.
Takeaway: Look for ‘micro-services’ to be integrated into messaging platforms. Look for unaddressed gaps in the messaging ecosystems (e.g. I still don’t understand why bot building platforms haven’t integrated basic CRM features yet).
5. WeChat is a cost-effective customer acquisition, conversion and up-selling tool
There has been a lot of discussion on the topic of bots vs apps with a lot of focus on the problems of apps:
- apps suffer from discoverability and deliverability issues
- building and promoting apps is getting more costly
- ~80% of smartphone owners don’t download any new apps in a month
- 25% of apps are removed after a single use
- app downloads take time/bandwidth and time to learn a new UI
The reality is that bots, apps and websites will likely co-exist where users choose the right tool for the right job. If a user engages infrequently with you, then an official account or bot is a low-friction way to get started building a relationship. As trust and usage increase then why not provide a more full-featured app to provide more value?
WeChat is an excellent customer acquisition tool providing an easy, low-risk way for users to start engaging with brands. There are no big app downloads and users are always in full control by being able to unfollow accounts at any time and not continue to get spammed in the future. Brands can use these initial footholds to nurture and build relationships.
WeChat is not only used to acquire leads, but is also used to nurture sales opportunities and increase the lifetime value of customers. Recently, I used the travel booking app Ctrip to browse hotel options in Hong Kong. After using the app, I was sent a push notification (above screenshot) encouraging me to join a separate WeChat group for people interested in traveling to Hong Kong. In this group, I got a more human touch and was able to ask questions and engage in general travel discussion.
Takeaway: WeChat is an effective customer acquisition tool. The blending of apps and WeChat groups offers the ability for brands to nurture relationships and increase LTV.
Messaging Platform Cross-Pollination is Good!
Instagram’s recent copy of Snapchat’s “Stories” feature demonstrates that it is not just a China-thing to copycat features and build upon them. The reality is that competition, innovation and — yes — copying helps raise all ships and drives progress forward.
Fun Cultural Fact: Business cards / name cards which were a fundamental part of building business relationships in China just a few years ago, are rapidly evolving to personal QR codes.
Hank Horkoff is a serial entrepreneur based in Vancouver and Shanghai. I help manage a Messaging Trends group on Slack (get an invite at http://messagingtrends.com) and also on WeChat. Scan the respective codes above to connect with me personally.
Thanks to the WeChat Messaging Trends group for reviewing drafts of this article.