WeChat and the ‘Mini Program’
In China, TenCent is poised to beat both Apple and Google at their own game.
I’ve spent a lot of time in the past couple of months thinking and talking about ‘leeching’ and the strategic implications of cross-platform compatibility on vertical ecosystems. WeChat’s recent roll out of ‘mini programs’ is perhaps the greatest summation yet of the power of leeching. It is a striking, almost perfect representation of the impact of the stacked product concept which paves the understanding of the leeching continuum.
The leeching continuum explains a phenomenon in which cross-platform components of the product stack, such as many third-party applications, begin to assume the roles of the fragmented, individual platforms they utilise, and eventually take over said platform by moving value generation up the stack. As I mentioned, the definition of platform refers to any layer of the product stack on which another layer is reliant upon:
Here, a platform can be any sort of entity in which another component in the product stack is reliant on; a platform can therefore include hardware. …Hardware sits at the bottom of the stack as the most foundational element; operating systems, applications and ‘soft’ components such as cloud, sit atop the stack. ... hardware is the platform for operating systems, and operating systems are platforms for apps, and apps can be platforms for various specific things such as social networking, or multi-media production and consumption.
The diagram below is my very best attempt to deconstruct and holistically visualise the concept.
The diagram above depicts the make-up of the entire smartphone industry by breaking down the product into layers. Layers are represented by the horizontal components, and the yellow arrows represent the direction and subject of leeching in the continuum.
At the bottom are the hardware players, which for the longest time have become the commodity stools for platforms and software. On top of the hardware are operating systems; here Android powers the hardware of many smartphones from a variety of different companies such as Samsung, Sony, LG, and Google’s own to name a few. In this case, Android leeches off the hardware products which have been reduced to commodities due to their lack of differentiation on the user experience layer. Resting on top of the operating systems are first party apps. This is particularly relevant to the iOS ecosystem given that most of Google’s services — Gmail, Maps, Photos, Search etc. — are available cross-platform. Here, Apple uses its own first-party applications such as iMessage, iCloud, and Photos to differentiate and increase switching costs to users heavily invested in Apple’s ecosystem.
Above the first party app layer however, is where it gets most interesting.
Cross-platform applications such as Facebook and WeChat sit on top of operating systems and thus replace a lot of functionality that is otherwise fragmented at lower levels of the stack. For example, messaging applications such as Facebook Messenger and Facebook-owned WhatsApp have largely superseded first-party alternatives such as iMessage. In addition photo-sharing and social media functions have also largely moved upstream into the application layer, think Google Photos and Facebook albums. Considering network effects, this should be no surprise at all. But it’s important to recognise that Facebook and WeChat are not just apps, but are platforms in their own right, as they host a bevy of applications and utilities.
Facebook the platform is merely a framework, consisting of profiles, the news feed, and identities, all of which facilitate the platform’s utilities. This framework, is Facebook’s runtime so to speak. On top of this platform, are the things Facebook actually does: facilitate messaging, online mini games, B2C communication, photo sharing, news aggregation, and many other things. Facebook, to some degree, is starting to sound a lot like an operating system. After all, an operating system is only as good as the applications that can be used on it.
With this in mind, the diagram above acknowledges a new level in the leeching continuum: utilities that exist on top of third-party cross-platform applications. The yellow arrows on the right of the diagram depict the direction and target of leeching. Here, cross-platform applications such as Facebook and WeChat begin to assume the role of operating systems, as they host applications which reside within them. On another level, the applications and utilities within these cross-platform apps/social networks can take over and assume the role of the native applications and utilities that exist on top of the initial OS.
In effect, we have something akin to an operating system within an operating system. This is troubling to the ‘legacy’ operating systems because much of the value and time spent is moving upwards, to the leechers. OS-ception.
This might all seem confusing and pointless. An operating system within an operating system seems like far too many hoops in a world where simplicity and minimising interaction is the goal. Despite this, what WeChat and Facebook have done is take advantage of new developments in technology: namely, the continued development of AI and bots, and also the shortcomings evident in the ageing ‘App Store’ model.
Currently, most of the tasks that are achieved on mobile devices are done through apps. Although mobile apps have proven over the last 7 to 8 years to be a boon, the act of installing and retaining an app is acknowledged to be quite burdensome. According to a study from Neilsen, a very small number of apps are actually used heavily, and most are used sparingly. Often, apps are installed, opened once, and never used again. Yet, these apps take up the identical amount of physical space on a user’s homescreen or menu, and often take up precious storage space on devices. Apps for airlines and restaurants are two examples of apps that perhaps shouldn’t be apps given the shallowness of their utility and the scarcity of their actual use.
These concerns are escalating during a time when computing’s next great paradigm — natural language — is beginning to hit its stride. As I, and many others have pointed out, AI and natural language computing should be the most transformative computing paradigm since the smartphone by virtue of its ability to make irrelevant the tenets of the ‘user interface’. Why would you install an entire app for a menial task when you could just ask a bot or a virtual assistant to do those things for you. Therefore, the dominance that mobile operating systems have as a host for apps, is starting to show its faults.
The WeChat ‘mini program’.
So now lets talk about WeChat. Recently WeChat, TenCent’s enormous chat app with almost 850 million monthly users (mostly in China), rolled out ‘mini programs’. They are exactly what they sound like: small, lightweight applications that can be downloaded and deleted quickly. They’re more basic than stand-alone applications, but come without the baggage of downloading an entire app to achieve small tasks. In practice, ‘mini programs’ address most of the issues I’ve mentioned about apps. Obviously, Apple is worried, made clear by the company’s insistence that TenCent use the term ‘mini programs’ instead of ‘app’. Unfortunately, despite WeChat’s cumbersomely named ‘mini programs’, Apple looks deeply susceptible to leeching. With mini programs, WeChat is more of an operating system than it has ever been.
Of course, you would be right to say that WeChat’s ‘mini programs’ aren’t as good as regular stand-alone apps, but that’s exactly the point. Many things such as searching for a movie, finding a restaurant, ordering at a fast food restaurant, or booking a flight, are infrequent or low-involvement enough to not warrant an app. That’s where mini programs make a lot of sense.
Apps like WeChat, or Facebook, have a lot of characteristics that make them particularly suited as platform for their own ‘mini programs’. Their ability to seamless integrate with our digital identity simplifies many tasks, and is likely to allow the kind of synergy that’s not possible on a ‘cold’ platform. By changing the definition of what’s valuable in an app, leeching platforms such as WeChat and Facebook can infiltrate the fortresses of Apple’s iOS and Google’s Android. I remain bullish regarding Facebook’s prospects despite Google’s strong technological lead, because owning a users’ digital identity should prove to be an extremely powerful lock and key.
It must be noted that WeChat’s approach with ‘mini programs’ is particularly suited to the Chinese market. In the west, consumers tend to prefer individual, focussed applications, whereas in China consumers are particularly enthusiastic about apps that can do everything. WeChat for example, alongside being a social network, handles e-commerce and payments between many businesses and consumers in China. There are also political factors, China’s government currently blocks access to the majority of Google’s services including the Google Play app store. The methods for obtaining apps on Android devices in China is done through a variety of third-party app stores, leading to a much more fragmented experience. In such a fragmented ecosystem, the notion of mini programs accessible through WeChat — an app which people already use for most things — begins to make a lot of sense.
It wouldn’t be out of the question to suggest a similar ploy gaining traction in the west. Even though the west lacks many of the factors that make such a service so compelling in China, the fact remains that the traditional mobile app is in danger as a result of their friction and the increasing viability of chat bots. What WeChat has done is demonstrate to us a textbook leeching strategy: an ambitious undertaking that attempts to not just target first party applications, but the OS layer entirely. What’s amazing is that I’m convinced it might actually work, an outcome which would lend enormous credence to the leeching phenomenon.
