WeChat: An Emerging Chinese Global Competitor

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EXCERPTS

WECHAT

WeChat was launched by Tencent as ‘Weixin’ in China in January 2011. WeChat was developed from scratch by an entirely new team of Tencent employees who were challenged to design a mobile messaging service without the legacy of PC It was a powerful mobile instant messaging app which was developed into a multi-function mobile communications and social networking platform. Users could create a profile with a picture, post ‘moments’ , create a group to chat with several friends together, connect with their friends through short voice messages, and video chat. Users could use WeChat for nearly all their e-shopping needs. With bank cards linked to their apps, WeChat users could pay for some services, book a cab, or even make online purchases by scanning quick response (QR) codes, track deliveries, review products and services, and share their experience with their friends. Moreover, the WeChat account could be used to handle location-based booking, flight check-in, and creative communication without pop-up ads. WeChat also helped to protect users’ privacy by blocking their mobile numbers

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GROWTH OF WECHAT

With a user base that was growing incredibly quickly, WeChat had 300 million users by January 2013 – within two years of its launch (See Exhibit III for Growth of WeChat). Some industry experts opined that as WeChat was developed on an innovative platform, in terms of features it had a competitive advantage over other equivalent services, like WhatsApp , Line , Viber etc. (See Exhibit IV for Monthly Active Users of Social Networking and Messaging Services and Exhibit V for Monthly Active Users of Cross-platform Social Messaging Apps)

WECHAT GOES GLOBAL

In April 2012, Tencent re-branded ‘Weixin’ as WeChat so as to appeal to its international users. With this rebranding, WeChat made an impact on many emerging countries, including Southeast Asia and Latin America. Between March and September 2012, WeChat doubled its user base from around 100 million users to 200 million. ...

CHALLENGES

Analysts were of the opinion that in the fiercely competitive market for smartphone applications, WeChat had succeeded by combining instant messaging with social networking. However, they opined that WeChat’s future would depend on two factors – whether it could replicate its success story in global markets and how it would turn its popularity into a source of profits...

LOOKING AHEAD

Analysts were of the opinion that with almost all the messaging apps including WeChat, Line, Kakao Talk, and Viber having or planning to introduce gaming platforms and adopting almost similar monetization strategies, there was not much separating them from each other...

EXHIBITS

Exhibit I: Financial Highlights of Tencent

Exhibit II Features of WeChat

Exhibit III: Growth of WeChat

Exhibit IV: Monthly Active Users of Social Networking and Messaging Services (2013)

Exhibit V: Monthly Active Users of Cross-platform Social Messaging Apps (November 2013)

Exhibit VI: Smartphone Users in Mature vs. Developing Countries Who Use Mobile Instant Messaging (July 2013)

Exhibit VII: An Image from WeChat International Marketing Communication Featuring Lionel Messi

Exhibit VIII: Comparison of Features offered by WeChat’s Rivals (February 2014)