Fintech
Now Reading
WeChat – The Mobile-First OS That Wants to Replace All Your Apps

WeChat – The Mobile-First OS That Wants to Replace All Your Apps

by Daria DanilinaJanuary 3, 2016

wechatFew people outside of China have heard about WeChat, yet over 600 million people spend around 3 hours within the app every day (http://wijnandjongen.nl/killer-app-of-this-decade-wechat-in-china/), which is more than 70% of all time spent on apps in China. At it’s core, WeChat is a messaging app similar to Whatsapp. However, deeper user engagement features such as “Moments” and “People Nearby” as well as integrations with a variety of other services and ability to pay within the app are what makes WeChat truly unique.

 

WeChat was launched in 2011 by the publicly listed company Tencent that became famous for launching the QQ instant messenger in 1999. Although QQ still remains widely popular in China, it was developed to be used on the desktop and doesn’t have a compelling proposition for users to log on more than a few times per month. Tencent recognised the growing importance of mobile over desktop early and thus WeChat was born.

 

Besides the ability to message other users, WeChat allows to share photos and videos through the app that play directly on the screen. “Moments” come in handy especially as Facebook remains inaccessible in China. Beyond following friends, users can also make new connections, using the “People Nearby” feature that displays other users in their area, or by playing games against other users. QR codes – long considered dead in the Western World – help WeChat users keep track of their new business connections as well as paying for items, both online and offline.

 

Integrated Payment services open the door to other applications that would otherwise require to open another app. For instance, WeChat allows to scan and pay for utility bills, split a cheque with friends at a restaurant, hail a cab via DiDi Taxi or transfer money to anyone with one click. Retailers can send coupons to WeChat users via iBeacons and users can shop their online stores without leaving the app. The service is not free for retailers, but the bill they end up paying to Tencent is much smaller than the one they would face if they went to a traditional payments provider such as the national bank, China Union.

 

In his widely read and discussed blog post “Mobile Theses”, Ben Evans crowned mobile as “the new centre of gravity of the tech industry” (http://ben-evans.com/benedictevans/2015/12/15/16-mobile-these/). However, we have yet to see a platform similar to WhatsApp in the US or Western Europe. Facebook Messenger and its virtual assistant service “M” (currently in closed beta) may be the closest substitute we currently have for WeChat. Ben mentions “messaging as a platform and a new way to get customers”, especially the way that an open API and friendly development environment “create an alternative to the web or the app store, but without the binary installation problem of apps and with your own new discovery and user acquisition platform.” On the other hand, Slack and its decision to start a venture fund investing into apps built on top of its (business customer focused) messaging software could become the platform of choice for those looking to offer services to users while they are at work, such as for example order lunch to the office with the help of the Slackbot.

 

While many agree that we are looking for a “new run-time – a new way, after the web and native apps, to build services”, we don’t know whether it will be similar to WeChat or more contextual as Fred Wilson wrote in response to the “Mobile Theses” http://avc.com/2015/12/contextual-runtimes/ ), meaning that payment and personal finance add-ons will be integrated with one app, entertainment into another and location based services into yet another platform. However, locking a user into an operating system such as iOS or Android no longer means having their undivided attention and while Apple and Google keep fighting over ad blockers a new platform integrating various services could emerge and steal users’ valuable attention.

About The Author
Daria Danilina
Daria Danilina
Daria Danilina, London Business School MBA Class of 2017 Daria started her career in capital markets, but soon found that her real passion was innovation and technology. Prior to starting the MBA at London Business School she was part of the early team at Dropbox, building out and scaling the company’s presence in Europe. These days, you will find Daria at hackathons, conferences, and many other start-up events in London as well as preparing for her next marathon in Regent’s Park.