WeChat: The Future of Social Media?

Last week, I presented on the WeChat phenomenon. While I was able to give the class a quick overview of the platform and why it’s so revolutionary, I also wanted to take a deeper dive into the app – explain how it started, why it grew so quickly, and why it continues to be successful.

What is WeChat?

So, let’s start with the basics (for those of you who didn’t see my presentation). WeChat is a Chinese messaging platform developed by Tencent in 2011. It is commonly referred to as China’s everything app because its features encompass almost all of the apps on your phone. Yes, that’s right all of them.

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You can send messages, video call, shop online, pay for products at physical stores, pay your utility bills, split dinner tabs, book plane tickets, listen to music, order food for delivery, pay for taxis, book doctors appointments, play games, listen to music and more – all while never leaving the platform. Pretty convenient, huh? According to one American venture capitalist, “WeChat is there at every point of your daily contact with the world, from morning until night.”

Rise to Success

It seems pretty obvious why WeChat has grown to over 700 million users so quickly and most report using the app on average about 10 times a day or more, but there are a number of key reasons why WeChat has become so successful. One of the main reasons has to do with the uniqueness of the Chinese market and its high mobile penetration. China’s mobile ownership is higher than those in America, Brazil and Indonesia combined. Additionally, the Chinese are already way ahead in eCommerce, making 50% of their purchases via mobile verses about a third in the US.

WeChat was able to appeal to the Chinese because it was a convenient, free mobile messaging solution that allowed users to easily integrate a number of features all on one platform. Furthermore, the free messaging part of the app was key because unlike the US, text messaging in China was expensive so users quickly adopted the platform.

A second reason behind WeChat’s success is Tencent’s (the parent company) QQ messaging platform. The QQ platform was designed for PCs, but the company quickly saw the growth of mobile and innovated the platform to what is now WeChat, also referred to as Weixin. Additionally, the QQ platform boasted over 800 million users and once the Weixin software was developed, Tencent allowed users to seamlessly switch over to WeChat, giving the platform huge user base and network effects advantages.  The launch of WeChat was not without competition, however, due to government regulation, which banned Facebook and Twitter, and Tencent’s ability to role out new features faster than any of its competitors – Kik, WhatsApp and Viber – WeChat quickly won and retained majority of the market.

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Lastly, WeChat has been able to convince over half of its users to attach their wallets to the platform. This is a major win for Tencent due to the mistrust and security concerns that are top of mind for most of its Chinese users. However, Tencent’s identity and security features, combined with its trustworthy brand image, have won over millions. This is huge for WeChat because Ecommerce is one of its major revenue drivers and it currently has over 10 million shops available on the platform. It is reported that WeChat brought in $1.8 billion in revenue last year, which is astonishing considering most messaging apps are barely profitable.

And it doesn’t look like WeChat is slowing down, which means that the more users and features it has, the more data and information it collects. It currently collects more data than Amazon, Google and Facebook combined. So it is no surprise that large brands are flocking to the platform to advertise and create shops on the app to tap into the enormous user base. This is really good news for WeChat and their continued success.

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So, is WeChat the future of Social Media?

Well, it’s complicated. WeChat has definitely figured out how to seamlessly integrate social media into every aspect of its users’ digital life, but unfortunately it won’t be that easy for the rest of the world. Many have even argued that a WeChat of the west might not be possible. This type of system is difficult to implement in other areas of the world for a couple of main reasons.

First, WeChat is so much more than just an app, it is basically a mobile operating system – one that has fixed many of the shortcomings of our OS. Hamish McKenzie of Tech Crunch put it brilliantly; WeChat is “tight ecosystem that uses a social graph as the fabric for a connected web of services that cover almost every aspect of your digital life, from communication to entertainment to shopping to banking.” In the US, there are still a number of issues with current mobile OS and no one has been able to solve them yet.

Additionally, China’s mobile and Ecommerce markets are much more advanced than the rest of the world. China basically skipped the pre-web era and went right to mobile devices and WeChat. They don’t know anything different than the super app. In the US and Europe, users have become accustomed to the multi-app environment and it will be difficult to break these habits.

So unfortunately, there isn’t a clear-cut answer. Personally, I believe WeChat does represent the future of social media and we will all eventually adapt to the one app model, but I’m quite not sure which player will be able to pull off the WeChat phenomenon. My best guess, however, would be Facebook since it currently has the largest network and most features, but what do you think? Interested to know others’ thoughts on WeChat and if a similar model is in our future.

10 comments

  1. As someone who didn’t see your presentation and hasn’t heard of WeChat, I was blown away by the success of this app. The company’s ability to leverage its reputation to break into a hesitant ecommerce market especially stood out as an innovative move. That move also makes me think that Facebook is in one of the best positions to position itself as the super app. Not only does it have the user base that you mentioned, it’s moving into mobile commerce, b2b products, VR, and countless other innovative parts of the tech space. Looking forward to seeing the winner!

  2. michaelahoff · ·

    The scope of WeChat is hard to comprehend, but you do a good job of encompassing it here. That’s also fascinating how China skipped the pre-app era. That does help explain how WeChat got so big, so fast.

  3. Really great and substantive post. I’m reminded of a presentation by one of my students a few semesters ago that looked at FB strategy of not being a single app, but a suite of apps, each optimized on a particular function (i.e. messaging, networking, etc). We’l see which one works out better in the long run, or maybe each is right for their respective markets.

  4. WeChat is fascinating, and while I’ve been familiar with it I didn’t realize the extent to which it’s become such an all-encompassing app. What really interests me is the e-commerce aspect – something that a lot of American apps have been pushing, although there hasn’t been a lot of success. It’s a struggle just to get people to send money through apps (e.g. Facebook Messenger), let alone purchase things from online shops. I’m curious if the e-commerce trend will catch on as it has in China – it could really be a game changer for American app makers.

  5. bishopkh1 · ·

    Great post to supplement your presentation. WeChat is a really interesting company, and I think it says a lot that they’ve been able to be so successful in China. While bigger players like Facebook, Google, and Uber have struggled in China due to regulatory issues or competition, WeChat has captured this massive market quite well. It makes me question whether they’ll be able to simply pivot markets and eventually move internationally. It’s possible their value prop is confined to China right now, and there’s room for another player to emerge in the U.S. and offer us a platform that feels more comfortable and normal than WeChat.

  6. Thanks for sharing. I think the point about the amount of data they have is important – it definitely gives them a source of competitive advantage in the market. I think the image with the timeline is a great add to this post – does a great job of showing not only how it has changed over time, but also how many different things WeChat is actually able to do. I’m not sure how much people on the West coast really care about having multiple apps – I think the seamless integration that WeChat has done can still be possible. It will need to come from a large player though (Apple/Google) because the point of it being more of an operating system rather than just a mobile app rings true. Great post, thanks!

  7. Great post! As a casual user of WeChat, there were some of the features I didn’t even know existed! My parents are avid users of WeChat and I can really see the benefits of having everything on one application. They always use WeChat to call their parents in China and are using the Timeline feature to share what they do with their friends. One of the biggest benefits of WeChat is that it brings people together in a Chinese demographic. My parents have found groups for their second grade class and have hosted reunions just off of the features on Wechat. However, I don’t see any international presence of WeChat outside of China, as the switching cost is just too high for social media platforms. They share many of the problems that Google+ faced and even though Google+ did have some “better” features than Facebook, they ended up being a failure.

  8. olearycal · ·

    Thanks for sharing more about WeChat. I personally am cautious about having all my information in one app. The fact that they’ve gotten people to so readily attach their wallet to the app is incredible. I think the format in which you do this is essential. For example, Snapchat allows you to pay friends with snapcash but I have never known anyone to use it. The format seems too simple and like you could accidentally send money to someone. Venmo has more steps involved in paying or requesting money and keeps a log of all your activity so that you can track your money and where its gone. Although I think Facebook would be the only platform that could reach WeChat’s universality, we have even seen how they want separate apps for their platforms. Their messenger is a separate app, a move that they made mandatory.

  9. It’s interesting that the way WeChat is structured is somewhat reminiscent of how the Chinese government is structured; it’s one entity that controls a lot of different aspects of people’s every day lives. I’m not sold on whether that concept would actually work in America because of how American technology and culture caters a lot to specific customer segments, and citizens are quite wary of relinquishing all their information to one entity. Nevertheless, it’s pretty cool that one app can conveniently do some many things, and it speaks towards the future of mobile apps and greater multi-functionality playing a key role.

  10. The stickiness that WeChat has created with this platform based approach should be the envy of any internet company. Most other social media companies have tried to create this type of platform, but most have not been able to successfully convert their business from their initial niche. Facebook is getting close and Apple is actually not far behind with what it is doing around iMessage and the rest of iOS10.

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