How did a Chinese mobile phone app go from a humble messenger to one of the most successful tech companies in the world, boasting a massive user base and you probably still have never heard of it? And could this same app succeed in Western markets like the United States?
The WeChat story should sound like a familiar one to tech-savvy Americans. A company experiences massive growth by offering up a social network that fully integrates itself into its customer’s life, so much so that it is hard for its users to give it up for very long. This familiarity will begin to fade as the WeChat story takes a hard right, offering up far more features than any American user would currently be used to in one app.
WeChat, owned by Tencent, “started as a messaging service” and then “transformed into an app where you can do” practically everything. (Kharpal, 2019) WeChat, “or Weixin…Wēixìn meaning ‘small message'” (MTA Network, 2017) features fit the lives of its youthful, “urban smartphone audiences'” by creating and fostering an “all-in-one-platform” app that makes itself inseparable from its users. (Mahoney & Tang, 2017)
FITTING THE NEEDS OF ITS AUDIENCE
WeChat keeps users coming back by offering what in one app would require countless apps in other markets. To someone in the United States, WeChat would look like it offers everything and the kitchen sink. See Jessie Chen’s, “Everything you ever wanted to know about WeChat” for an astounding graphic breakdown of what the app does for Chinese compared to U.S. apps (see a smaller analysis below).
“With unlimited media choices available to users today… if audiences can get all they want from one platform, why bother to find other options?” (Mahoney & Tang, 2017)
WeChat is an amalgamation of recognizable apps like Facebook, Twitter, Snapchat, eBay, plus your bank apps, Uber, and far more rolled into one. “You can use the app for nearly everything. This includes using it to pay street food vendors, [and] ordering groceries,” says Nick Guli in an article of “must have” apps while visiting China. (Guli, 2019) “Audiences rarely need to leave [WeChat] to open a mobile browser [even] if they want to read [the] news,” they can do it all seamlessly in WeChat “which is not only convenient to audiences but also helps [WeChat] keep the audience flow.” (Mahoney & Tang, 2017)
A “SUPER-STICKY” APP
WeChat is “super-sticky” because it stays ahead of the changing needs of its consumers, keeping “Chinese users…glued to the meta-platform whenever they use their smartphones.” Says the book “Super-Sticky, WeChat and Chinese Society” about the app’s profound hold on its users’ daily lives. (Chen, Mao, & Qiu, 2018) “Super-Sticky” is a term that references “Sticky content,” meaning the content “induces return traffic and holds user attention.” (Kominers, 2009)
And WeChat really can hold one’s attention, “over one-third of [WeChat users] spend four hours or more on the app each day.” (New York Times, 2019)
The app can be so super-sticky that it can almost be painful for some to put it down. “One tends to underestimate the power of habits until the routine is disrupted,” says the Super-Sticky book, who cited one user’s extended WeChat fast quoting him as saying that “leaving WeChat means leaving [social] life’ in Shanghai.” The WeChat user noted that he “[took] for granted many of the services that he [could] get by tapping into his WeChat account without noticing how his daily routine and social life have come to rely on WeChat.” (Chen, Mao, & Qiu, 2018) And Nick Guli in Explosion said that “the only difficulty you’ll have” with WeChat “is switching back” to your old apps when you depart China for home. (Guli, 2019)
“The U.S. tech industry likes to talk about ‘mobile first’ experiences, but that catchphrase doesn’t play out the same way that it does in China.” (Hayes, 2018) The Chinese are very mobile-centric, so a cell phone app has the opportunity to succeed and corner the market on users. “Many Chinese never owned a laptop or a PC, and their first computer was their smartphone…people usually resort to WeChat” for contacting others, rather than using email. (New York Times, 2019)
WeChat doesn’t even pretend to play well with P.C.s if you want to use your computer to WeChat, you’re going to need to use your phone to get it working on that platform. “For example, if you want to use WeChat on a laptop or desktop P.C., you have to use a Q.R. code to link it to your phone and verify access from your phone. Every time,” said Tyler Hayes for Fast Company. “You never enter a password into a desktop app: Instead, you click ‘login’ and get a notification on your phone asking you to confirm.” (Hayes, 2018)
So I guess it shouldn’t be a surprise that an extremely sticky app in a mobile-dominated market was bound to succeed, but it almost seems flippant to chalk WeChat’s success up to some simple equation. The app has amassed an enormous user base, “for the 800 million internet users in China… [there are] over one billion WeChat accounts… Just about every Chinese online has at least one [WeChat] account, and some more than one,” says Li Yuan a New York Times technology columnist. “WeChat allows only 5,000 contacts for one account,” so many of the businesspeople Li Yuan knows “have two or more WeChat accounts,” and some even more. (New York Times, 2019)
For some perspective, Facebook, worldwide, has “over 2.38 billion monthly active users” and an average of “1.56 billion people,” log on daily to their Facebook accounts “and are considered daily active users.” (Zephoria Digital Marketing, 2019) WeChat has a “monthly user base of more than 1 billion people” in China alone. (Kharpal, 2019)
WeChat’s explosive popularity has also led more audiences to join or get left behind, “The prevalence has made WeChat an indispensable part of many people’s lives and work.” Li Yuan said that “years ago, I met two people who refused to use WeChat, and I thought about writing a story about how people like them navigated work and life. Before I got around to it, both became my WeChat friends.” (New York Times, 2019)
WeChat continues to create a symbiosis with its customers and their daily life. One way was introducing “mobile pay in 2013,” which didn’t become a game changer until their introduction of Red Packets “with its seductive blend of social networking, gaming, and gambling—that got users on board with the concept of sending money electronically,” said Eveline Chao for Fast Company. Chao also points out that cash was king for many of her friends and coworkers and China in general, credit-card use was rare. It was the Red Packets, the “ancient custom made digital” that was “the gateway to” e-pay in China. (Chao, 2017)
Red Packets are “based on the age-old Chinese custom of giving red envelopes filled with money at weddings, holidays, and special occasions.” (Chao, 2017) But WeChat put its spin on the gifts by allowing “users to put a sum of cash in the Red Envelope and then distribute the money randomly among a group of recipients.” (Mahoney & Tang, 2017)
Red Packets are huge for WeChat, it “encouraged users to bind together into groups to send money, often in randomized amounts (if you send 3,000 yuan to 30 friends, they may not get 100 yuan each; WeChat decides how much).” Reported the Economist. Which “in turn led to explosive growth in group chats” and “32 billion packets of digital cash” being sent around in 2016. (The Economist, 2106)
WeChat has continued to unveil “new weapons [to] its arsenals like its “partnership with Starbucks that [allows] WeChat’s users in China to buy lattes, pastries, or other Starbucks products for a friend or family member.” (Chao, 2017) WeChat’s integration with LinkedIn, which gave users “one more reason for its users to open the app – job hunting and recruitment.” (Horwitz, 2014)
With all that WeChat has to offer Chinese consumers, could their success translate to other countries outside of their home base? WeChat certainly wants to try as it has “almost reached saturation in Tier 1 cities in China with approximately 93% people already registered,” points out Mohit Mittal in a Harvard Business School post. “What are the new avenues of growth? Now it’s trying to get users from other emerging markets — India, South East Asia, and Latin America.” (Mittal, 2017)
COULD IT SUCCEED HERE?
For an app you probably never heard of or had much experience with, do you suddenly see “Future American Success Story” written all over it now? I think anyone would have to give WeChat the benefit of the doubt. After all the app has a ton of benefits, bells and whistles, and the clout overseas that if WeChat wanted to bring Westerners onboard, odds are they could convert some.
Yet, it would be hard to imagine that WeChat could find the same type of explosive success in the United States where “mobile first” still seems to be more of a catchphrase than an actual lifestyle for tech-savvy Americans. And even if consumers in the U.S. wanted WeChat and all that it gives Chinese consumers, it would be hard to envision Facebook, Google, Apple, Amazon, and others letting that happen without a messy fight.
And even if they got past the giant tech-companies that dominate western cultures, there’s still the open question of WeChat privacy. The New York Time’s Li Yuan poses the question “How about the censorship and government surveillance on WeChat?” She answers that “sadly, it’s just the way of life in China…the reality is that ordinary Chinese often feel powerless and fatalistic when it comes to censorship and surveillance.” (New York Times, 2019) Privacy concerns may frighten some users away from a Chinese product like We Chat.
And even if WeChat got past the hurtle of winning over trust, how soon after that would they get hit with the “Monopoly” tag?
The question of “is the juice worth the squeeze” or some similar colloquial phrase might make its way into the boardroom conversation.
Still, the WeChat model of offering everything in one app appears to have its advantages. I could imagine an app like WeChat or a pared down version (with fewer features) eventually coming to the United States, but it would probably come through mergers and acquisitions and be a familiar brand name for Americans.
BTW…Ray owns a tiny amount of TENCENT HOLDING shares.
Chao, E. (2017, January 2). How WeChat Became China’s App For Everything. Retrieved from Fast Company: https://www.fastcompany.com/3065255/china-wechat-tencent-red-envelopes-and-social-money
Chen, J. (2016, August 13). Everything you ever wanted to know about WeChat. Retrieved from UX Collective: https://uxdesign.cc/wechat-the-invincible-app-a-key-to-business-success-in-china-8e9a920deb26
Chen, Y., Mao, Z., & Qiu, J. L. (2018). Super-Sticky Wechat and Chinese Society. Bingley: Emerald Publishing Limited Howard House.
Guli, N. (2019). 5 Apps You Must Have While in China. Retrieved from Explosion: https://www.explosion.com/130598/5-apps-you-must-have-while-in-china/
Hayes, T. (2018, March 8). China’s WeChat Isn’t Just An App—It’s A Cross-Cultural Education. Retrieved from Fast Company: https://www.fastcompany.com/40540342/chinas-wechat-isnt-just-an-app-its-a-cross-cultural-education
Horwitz, J. (2014, February 6). 5 ways China’s WeChat is more innovative than you think. Retrieved from Tech in Asia: https://www.techinasia.com/5-ways-wechat-is-innovative
Kharpal, A. (2019, February 3). Everything you need to know about WeChat — China’s billion-user messaging app. Retrieved from CNBC: https://www.cnbc.com/2019/02/04/what-is-wechat-china-biggest-messaging-app.html
Kominers, S. D. (2009). Sticky Content and the Structure of the Commercial Web. Retrieved from Department of Economics, Harvard University & Harvard Business School: https://pdfs.semanticscholar.org/fbae/0cd4b37c73aefbe5d07ddd420db16b0660fa.pdf
Mahoney, L., & Tang, T. (2017). Strategic Social Media. Chichester: John Wiley & Sons, Inc.
Mittal, M. (2017, March 28). WeChat — The One App That Rules Them All. Retrieved from Harvard Business School: https://digital.hbs.edu/innovation-disruption/wechat%E2%80%8A-%E2%80%8Athe-one-app-rules/
MTA Network. (2017, September). The Wonder of WeChat. Retrieved from MTA Network: https://mtanetwork.net/the-wonder-of-wechat/
New York Times. (2019, January 9). To Cover China, There’s No Substitute for WeChat. Retrieved from New York Times: https://www.nytimes.com/2019/01/09/technology/personaltech/china-wechat.html
The Economist. (2106, August 6). WeChat’s world. Retrieved from The Economist: https://www.economist.com/business/2016/08/06/wechats-world
Zephoria Digital Marketing. (2019). The Top 20 Valuable Facebook Statistics . Retrieved from Zephoria Digital Marketing: https://zephoria.com/top-15-valuable-facebook-statistics/