How WeChat became China’s most successful ecosystem but struggled in foreign markets?
WeChat became China’s most successful ecosystem
WeChat has emerged as an all-encompassing app
WeChat has emerged as an all-encompassing app, incorporating features offered by Amazon, Apple Pay, Facebook, Grubhub, Messenger, WhatsApp, Uber, and Venmo, all within a single platform. As of the second quarter of 2017, Tencent’s WeChat boasted 963 million active users, predominantly concentrated in China. The app has witnessed remarkable success within the country, with 79.1% of smartphone owners regularly accessing it, and 84.5% of messaging app users opting for WeChat. The diverse range of features offered on WeChat entices users, resulting in an average daily usage of 90 minutes, nearly double the time spent by global users across all of Facebook’s suite of apps, including Facebook, Instagram, and Messenger.
A triumphant presence in China
Despite facing competition from Kik, WhatsApp, Viber, WeChat, Line, Facebook Messenger, Miliao, and Weibo upon its release in early 2011, WeChat managed to outshine its rivals due to several factors:
The Chinese government imposed restrictions on foreign messaging apps, creating an environment that favored domestic alternatives.
Leveraging its existing user base from QQ, Tencent’s instant messaging software service, WeChat offered a seamless account creation process, allowing users to sign up for free using their QQ accounts, which were already in widespread use among Chinese individuals. This triggered network effects, where the growing user base attracted more users who wished to connect with their friends and family.
With access to user data from QQ, Tencent understood its users’ preferences and swiftly incorporated desired features into WeChat. By opening its platform to third-party developers, WeChat rapidly expanded its capabilities, enabling tasks such as food delivery, doctor’s appointment booking, and meeting new acquaintances. This transformed WeChat from a mere messaging app into an indispensable ecosystem for its users.
WeChat employed innovative methods to familiarize users with new features and enhance app engagement. For example, the introduction of mobile payments in 2013 did not gain widespread acceptance until the inception of “Red Packets” in 2014. Red Packets allowed users to electronically exchange money, creating a competitive and thrilling experience reminiscent of gambling. Users could put a designated amount of money in a digital envelope and send it to a chat group, with only the first recipients tapping the envelope receiving the money. This mechanism contributed to a surge in mobile transactions, surpassing the United States in 2015 with a total of $235 billion in China.
WeChat-Challenges encountered abroad
WeChat struggled to replicate its success in foreign markets, encountering various hurdles:
Despite its triumphs in China, WeChat struggled to replicate its success in foreign markets, encountering various hurdles:
Upon entering foreign markets in 2012, WeChat faced strong competition from already-established chat apps. As app adoption heavily relies on network effects, it proved challenging for WeChat to persuade users to join a platform where their connections were not already present.
WeChat failed to offer comparable functionalities to foreign users. Even as of mid-2016, the app did not support features like food ordering, Uber booking, or smart TV control for American users.
WeChat remained heavily focused on Chinese users and did not adapt adequately to the unique requirements of foreign markets. For instance, sticker packs available on WeChat were primarily tailored to Chinese users. In 2016, a search for “carnival,” Brazil’s renowned festival, yielded no results, highlighting WeChat’s struggle to cater to the Brazilian market .
What lies ahead?
Realistically, WeChat’s prospects for expansion into foreign markets appear bleak. However, there may still be opportunities for WeChat to serve as an aggregator app, considering that users in most markets rely on different apps for various functions. Yet, the allure of such opportunities in this domain remains limited.
Nevertheless, WeChat’s triumphant narrative in China signifies that comparable ecosystems could be developed in emerging markets. Players like Vodacom’s M-Pesa, the largest mobile money platform in Tanzania with a 42% market share and 14% population penetration as of 2014, could explore the potential of building their own ecosystems in regions where convenience apps have relatively low penetration.
Adapt your user engagement strategies: leverage – Wechat
Leverage Chinese social channels- Wechat
It’s crucial to recognize that China has a distinct cultural context, setting it apart from America or Europe. People in China have unique expectations and preferences when it comes to customer support for games and apps. They seek prompt assistance and prefer channels that align with their communication habits.
To effectively engage Chinese users, it’s essential to be resourceful and leverage popular social channels. One such platform is WeChat, which goes beyond traditional customer support methods like email or web forms. Chinese users, particularly high-value ones, anticipate a personalized and interactive customer support experience.
In the Western context, this approach might be unconventional. However, in China, it has become a fundamental requirement to meet the expectations of valuable users and customers. By embracing this approach, you can establish stronger connections with your user base and foster customer loyalty.