When it comes to Internet innovation, China is often accused of cloning Silicon Valley technology. But for messaging platforms, it’s the other way round. Facebook is copying WeChat, the most popular messaging product in China. And with good reason: WeChat is years ahead of Facebook’s Messenger (not to mention WhatsApp, another leading messaging app that Facebook owns). Why is this important? WeChat has 650 million monthly active users (MAU) and Messenger has about 800M. Indeed messaging apps are so widely used these days, that I named it my number one trend of 2015.
In this newsletter, I’ll focus in particular on the integration of e-commerce into messaging platforms. WeChat does this amazingly well; and I’ll explain why. As for Facebook, it has only just begun to implement business features into Messenger. For once Mark Zuckerberg is well behind the trend line, but nevertheless we’ll look at how his company is progressing.
Why WeChat is the Future of Messaging
WeChat is much more than a simple chat app. It’s used on a daily basis by millions of Chinese for online shopping, in-store payments, ordering and paying for transportation, paying utility bills, and more. Indeed Tech in Asia writer Erik Crouch managed to go an entire day using no other apps but WeChat – including paying for a taxi and for lunch using the WeChat Wallet. Another Tech in Asia correspondent, Steven Millward, listed twenty things – other than “stickers and chatting” – that WeChat is used for in China. Most of the items on the list are payments related (although, perhaps hinting at which stratum of Chinese society uses these features, one item on the list was: “Send instructions to your butler”).
In a comment to his post, Millward notes that startups in China are integrating services into WeChat – much like many startups in the West are building apps for the iPhone or Android platform. He points to a WeChat service called Ele.me, “China’s top meal delivery startup,” which has a WeChat service account as well as the standard smartphone apps. That means that if you live in China, you don’t even need to open another app to order a takeaway – you can do it from within WeChat.
Ele.me, which has received over $1 billion in funding, is a sign of things to come in the West. Although whether the dominant e-commerce platform in the US will be Facebook Messenger (likely) or Uber (possibly – remember it’s already started doing food delivery) remains to be seen.
Another thing that Asian countries have implemented much better than Silicon Valley is QR codes. In the context of WeChat, these scannable barcodes enable in-store payments at retailers such as Uniqlo, McDonald’s, Pacific Coffee and 7-Eleven. How it works: you follow the official WeChat account of a participating retailer, let’s say McDonald’s. McDonald’s sends you a message in WeChat, offering you a QR code with some kind of deal (basically it’s a coupon). If you decide to take up the offer, you pay for it with your WeChat Wallet. When you next go into a McDonald’s, you simply show the server your smartphone and they scan the QR code. All of this is done within WeChat.
I don’t know about you, but I have loads of coffee cards, loyalty cards and the like. It makes my (physical) wallet too bulky, so often I leave behind these pesky cards and therefore miss out on the discounts or loyalty rewards. How much easier would it be if all of that was in a single app. This is the promise of messaging platforms; and what China’s WeChat is already well on the way to implementing.
So, what about Facebook?
Facebook Messenger’s “Business” Platform
From April 2014, Facebook began removing the messaging feature from its main smartphone app and forced users to download the Messenger app instead. There was a predictable outcry from some users (“Noooo, change!!!”). Indeed, a few of my friends still protest about having to use Messenger. But the reality is, Facebook had no choice. To his credit, Mark Zuckerberg realised that Messenger had to become its own platform when he saw what WeChat was doing.
In its annual F8 conference last March, Facebook announced two initiatives for Messenger. But despite many rave reviews from tech blogs and news sites, what was announced was underwhelming – especially if we compare it to what WeChat already has.
The first initiative was Messenger Platform, which enables developers to build apps that integrate with Messenger. The problem is, there’s no e-commerce component. So the apps being built are, basically, sticker apps. Ok, so ho-hum on that one. What about the second announcement? That was labeled Business on Messenger and it lets companies communicate with their customers in Messenger. For example, to track an online shipment. Well, that’s a start. But providing customer support inside Messenger is hardly Facebook going “All In On E-Commerce,” as a Forbes headline breathlessly put it.
Perhaps we’ll see more substantial e-commerce initiatives in Messenger in the 2016 F8 conference, in April. But as of now, Facebook’s Messenger platform is years behind WeChat, Japan’s Line app and South Korea’s KakaoTalk. Although you wouldn’t know it reading Silicon Valley press coverage.
Snapchat’s Ephemeral E-commerce
When it comes to innovation in messaging platforms, the big success story in the West has been Snapchat. Due to its remarkable growth among teenagers, it’s worth checking in on Snapchat’s ambitions for e-commerce.
A Mashable post from July last year reported that Snapchat is “doubling down on e-commerce.” But another reality check is needed here: Snapchat is in fact merely dabbling in e-commerce. The closest Snapchat has come to putting a buy button inside its app, is an undisclosed investment in a shopping app called Spring. But this, again, is nothing compared to the Asian messaging apps.
Incidentally, both Facebook and Snapchat offer so-called peer-to-peer payments – in other words, sending money to a friend. You have to add your debit card to enable this. But this is hardly e-commerce, because you can’t buy anything.
Conclusion
The point of this newsletter is not to disparage the Western world’s messaging platforms. Because Facebook is still a juggernaut and eventually its Messenger platform will have e-commerce functionality. Probably Snapchat will too – what better way to sell skateboards and cellphone covers! No, the point of this newsletter is to show what can be done with a messaging platform. We just need to look to WeChat, a sophisticated e-commerce platform that Facebook should (and probably will) copy.
Once a proper business platform for Messenger arrives, there will be plenty of opportunities for retailers and startups alike to sell their products. After all, what kind of consumer society doesn’t have a buy button in its leading Internet apps?
Lead image credit: Value2020
Great post. I knew little about WeChat and definitely understand the appeal. Would I trust Facebook for all these uses? Probably not. I use Messenger because that’s the only choice with many of my friends. I prefer LINE and wish it would get more popular outside of Japan.
Thanks Solange. Yes Line is amazing too.
Each December going back to 2004, I’ve done a year in review blog post about technology. This year I’m focusing on technology trends rather than specific products. But I’ll mention many of my favorite tech products as part of the review.
In time, we may look back on 2016 as the beginning of the big shift away from mobile phones. Why? Because much of the innovation in 2016 happened in product categories like Virtual Reality, Artificial Intelligence, Automation, Wearables, and Internet of Things (IoT). In those categories, the mobile phone typically isn’t the primary device (although it’s often a supporting or connecting device – at least for now). In VR, headsets such as Oculus Rift or HTC Vive are the primary devices. With wearables and IoT, the primary device is either attached to our body or integrated into our environment. And while consumer AI is sometimes phone-based (for example, Siri), usually it’s either device-less (like IBM Watson) or a bold new type of device (like the Amazon Echo). As these trends continue to evolve, eventually we won’t need smartphones at all. But I’m getting ahead of myself. Let’s look at the trends of 2016 that started this gradual shift…
1. Virtual Reality Becomes Reality
After decades of hype, 2016 was the year that VR arrived as a consumer product. Three major VR headsets were released this year: Facebook’s Oculus Rift in March, the HTC Vive in April, and Sony’s Playstation VR in October. All helped make VR a reality this year. On the down side, we learned over 2016 that compelling VR content hasn’t arrived yet. Especially if you weren’t already an avid gamer. Also the level of presence – that feeling of truly believing you’re in an alternate reality – has a long way to go for the current crop of devices.
But at least VR is a real, commercially viable technology now. Not to mention it has inspired certain science fiction authors to speculate about where it might take us in the future.
2. Conversing With Artificial Intelligence
AI has been evolving at a steady clip for many years now, but until now there hasn’t been a breakthrough consumer AI product. In 2016 it became clear that Amazon Echo was that product; it was released outside of the US for the first time this year. The idea is that you talk to the Echo device via a voice service called Alexa (Amazon calls Alexa “the brain behind Echo”). This may prompt comparisons to the infamous movie AI, HAL 9000, in Stanley Kubrick’s movie 2001: A Space Odyssey. Luckily, so far there haven’t been any reports of a rebellious Alexa, although it did make a couple of guest appearances this year in the dark (and brilliant) tv show Mr Robot.
Alexa is a form of intelligent assistant, a product type that Google, Facebook, Microsoft and others are all exploring. A related trend over 2016 was the rise of ‘chatbots,’ which are integrated into Instant Messaging apps. What they have in common with Alexa is their conversational interface. Facebook began experimenting with chatbots this year in the Messenger app, in an attempt to catch up to its more sophisticated Asian competitors.
3. Social Media Jumps The Shark
2016 was the year “selfish media” finally went too far. Whether it was fake news, filter bubbles that prevent people from seeing (let alone understanding) other viewpoints, over-sharing people dominating our feeds, the outrage culture that permeates the media, or simply the overwhelming flow of blinkered opinions we get every day on social media… I’ve had enough. I’ve already begun to dial down my social media consumption.
It’s not all bad, of course. I still enjoy keeping in touch with family and friends on Facebook, and Twitter is useful for tracking narrowly defined interests. But social media proved in 2016 that it is not a viable news platform – at least if we want truthful and open-minded discussions. Bring back blogs in 2017?
4. Society Begins To Tackle Automation
We’ve only just started the conversation about how to transition to an economy which is heavily automated. In 2016, there were multiple warning signs of the potential impact. Take Uber, for example. The popular ride-sharing app began actively trialling driverless Uber cars in 2016. It’s likely that Uber’s driverless car fleet will eventually take the jobs of tens of thousands of human drivers – and that could easily happen within a decade. What will all those drivers do next?
This conversation is less about the technology itself, than it is about finding solutions to what automation will do to our working culture. That could mean implementing a Universal Basic Income, or people becoming more creative in how they earn an income. We don’t yet know how to deal with increasing automation. But it’s an important topic and in 2016 we, as a global society, at least started talking about it.
5. Pokémon GO & The Dawn of Augmented Reality
I couldn’t do a review of 2016 without mentioning Pokémon GO, which had an extraordinary burst of popularity over July and August. Without a doubt the killer app of this year, Pokémon GO brought Augmented Reality (AR) into the mainstream. At one point it seemed like every kid in my city was chasing cartoon characters down the street. And the irony, at least for me? Pokémon GO was a smartphone app. So mobile phones are not dead yet!
Conclusion
Ultimately, I think Pokémon GO was an outlier this year. I look back on 2016 as the year in which Internet technology went well beyond our mobile phones. Whether it was VR headsets in our lounges, Alexa in our living rooms, or driverless cars being tested on our roads, 2016 expanded the scope of what it means to be ‘online’ (or ‘invirt’ as I put it in my VR novel). I expect to see more of this expansion in coming years.
So when will the smartphone lose its status as our primary Internet device? Probably not for many years. However, perhaps this generation of teenagers will be the last to walk around with their necks craned downwards, staring at a small rectangular screen.
Lead image: Wired