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.
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