Mobile growth in Asia

This graph shows the expected growth of mobile subscribers worldwide. It shows a tremendous growth in Asia Pacific.

We also know that a large percentage of the population in Asia is quite young:

“At the beginning of 2012, India had the youngest population in terms of size with 704 million people aged below 30, followed by China (497 million), the USA (127 million), Pakistan (126 million) and Indonesia (123 million).” Source: Euromonitor

A large percentage of the population have mobile phones, and many in the younger generations skipped having a computer altogether – especially in India and Indonesia. Everything they do is done using mobile devices; shopping, chatting, browsing, learning, playing, dating. The market potential is enormous.

Why chat apps?

In the Western world, post-centric social media sites such as Facebook are popular amongst people 30+. It’s great for posting family news, keeping in touch with friends and sharing entertaining content. Facebook is about quantity – you broadcast content and might get hundreds of likes or comments.

For millennials (people born in the 1980s to the early 2000s), the dynamics are often different. Facebook has problems retaining them as active users, and many are fleeing the social network. There are several reasons for that:

• Teenagers feel uncomfortable interacting with their own family members on Facebook on a daily basis. They are in a phase of discovering and exploring their identity, and they don’t necessarily want their close family to be a part of that.
• It’s important to be able to be yourself without judgement. People feel more comfortable and free in smaller groups with people they trust, instead of broadcasting to a larger group.
• With more time at hand, teenagers spend more time online and want instant interactions. They don’t want to wait hours for people to like or comment.
• It’s important for them to be able to express emotions and communicate with fun, playful interactions. Asia based chat apps such as Line, KakaoTalk and WeChat have led the way with stickers, games and interactive drawings. Facebook is now trying to catch up by adding more stickers and playful interactions to their mobile apps.

In the US and Europe, chat apps such as kik and Snapchat are gaining a lot of popularity among teenagers. Photo-based Instagram is also very popular. Many think that teenagers are driven to these photo based chat apps because of sexting or flirting messages. In reality, most of the “snaps” are about selfies, funny things, people and “What I’m up to”.

Millennials are also using SnapChat for it’s ephemeral functionality – the ability to erase your tracks. (Recommended reading: Ten things you need to know about Snapchat)

Social apps in Asia

In the developed countries/regions in Asia (Singapore, Hong Kong, Korea and Japan) social platforms designed in the U.S. such as Facebook, Instagram and Twitter are popular. In China social media is heavily shaped by the government censorship. WeChat, Sina Weibo and QQ/Qzone are the biggest chat/social apps in China. Pengpeng is a location and game based app that is growing in popularity. Sina Weibo (micro blogging, comparable to Twitter) has 500 million users, but 90% of the users are inactive.

The biggest potential for growth in chat apps over the next decade is in emerging or frontier markets – India, Indonesia, Malaysia, Thailand, Philippines and Vietnam to mention a few in Asia. Facebook, Twitter and Google are growing massively in these countries. In some of them, they collaborating with or presumably sponsoring telecom companies. In countries where infrastructure isn’t well developed yet and data plans are expensive, being able to pay a relative small (or no) amount to access unlimited usage on only one single social platform is a good compromise for many. And it’s a great way for Facebook, Twitter and Google to get a head start in these markets.

For a comparison of how important cost of connecting to the internet and social media is, see the following graph. In Brazil you will have to work 35 hours on minimum wage to afford a 500 Mb data plan. In Germany, only 1 hour.

Millennials and chat apps in emerging markets

Knowing that young people are fleeing Facebook in Europe and the US, will the same happen in emerging markets? I have done on-site user research in Nepal, Malaysia and Indonesia and chatted with hundreds below the age of 30 in countries like Bangladesh, Saudi Arabia, Afghanistan, Syria, Serbia, India and many other countries. Here are a few observations that I have done after hundreds of interviews:

Millennials have a lot in common in any country

Young people have a lot in common everywhere in the world. Conversations are about sharing photos and selfies, fashion, pop culture, funny memes, music and emotions. Even in war-struck countries, young people who have the opportunity to are trying to live normal lives as best as they can, sharing and chatting about “everyday” content.

Social media is key to meeting new people

In Kathmandu in Nepal, they often shut down electricity for up to 10 hours every night. And many parents are often protecting their children (especially the girls) by not letting them go out after dark. Because of this, social media is incredibly important to them. It’s the best way they can meet new people, and explore their identity and interests.

Data usage is important

I am always surprised by how many young people have mid/high end Android phones or iPhones in many countries in emerging markets. But still, they keep on using their 10 year old feature phones as a preferred method of accessing the internet. Why? Because feature phones are specifically designed to use less data. I even talked to non-technical people who knew that some apps using binary data protocols use less data than XML-based apps on feature phones.

Freedom and anonymity

For many of the people I talked to, freedom and anonymity is incredibly important. There are many reasons for that, and security is one of them. They want to be in full control of who sees their name, who sees their friends, who can chat to them, who can see their photos. They want to be able to delete their messages automatically in case someone hacks their account or steal their phone. If they feel secure and in control, they’ll feel more comfortable sharing and chatting with other users.

Difference between genders

I also noticed differences between the genders. Boys often chat with a lot of people and have many friends connected to their profile. Girls are often more shy and protective, have fewer and closer friends and usually prefers chatting with other girls.

What chat apps will succeed for millennials in emerging markets?

There are 4 key factors that I believe are going to decide what apps will succeed for millennials in emerging markets:

Features for meeting new people

While WeChat, Line, KakaoTalk, WhatsApp and Facebook are designed mostly for you to communicate with your existing friends, there is a need for apps that can work as meeting points (group chats, forums based on interests, chat rooms or similar). This is much more important in emerging markets than in developed countries, because it might be hard to meet new people in other ways. Apps like Meow, Twitter and Instagram are much better at making users discover and connect with new people. Today, surprisingly few chat apps are designed to help you meet new people.

Intimate conversations

Young people want to chat in smaller groups, and care less about posting and broadcasting to hundreds of people.

Privacy features and usernames

Facebook is forcing all users to enter their real name. This is probably not going to work well for young people in many countries in emerging markets because of safety and privacy. Users want to be in control of whether or not they want to share their real identity. It is also crucial to have easy-to-understand privacy features so that you always know who sees what.

Expressing emotions.

Being able to express emotions is particularly important for young people. A wide range of stickers, emoticons or animations for expressing emotions is needed to engage millennials.

In addition to this, there are several features that will be particularly important for any user group in emerging market:

Connectivity

Apps that are stable, deliver messages fast and have alternative delivery methods. Indian based Hike has an offline mode where you can switch over to SMS when a user is offline. It’s also interesting to see how apps such as Firechat can send messages through Bluetooth – for people with limited and expensive data plans this could be an interesting alternative way to connect with people nearby (such as a class room).

Data usage

Data is still going to be expensive in emerging markets for years ahead. Successful apps needs features for using less data (for example by not downloading images) when not on a free Wifi connection. One example of an app successfully doing so is the Opera browser with their Off Road mode, which compresses data on slow connections.

Multi platform apps

Blackberry has a big market share in Indonesia. Feature phones are still more than 60% of the phone market in India. In order for user’s to be able to chat with all their friends, successful chat apps will have to be available for several platforms.

Localized features

Apps like KakaoTalk (Korea), Line (Japan), Hike (India) and WeChat (China) are particularly strong in their home markets. Line is putting massive efforts into localising their app with country specific events and stickers. The more contextual and localised you are, the more the users will use the app.

User on-boarding through address book integration and SMS

In order to reach critical mass, apps still need to offer invites through SMS, as many of the users that you want to invite might not be online or do not use other social platforms such as Facebook.