WeChat 2018

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WeChat.

WeChat is a popular multi-purpose messenger app developed by Tencent that also acts as a social media and mobile payment platform for its users. With one of the most active user bases, averaging 66[1] minutes daily per user, and various built-in functions that integrate the app with daily life, WeChat is becoming one of the most powerful and versatile apps of its age. This Wiki will explore the different functionalities of WeChat, discover the reasons behind their success, then analyze to see if WeChat could be successful internationally, with a focus in North America (NA).

Contents

History

WeChat under the brand name WeiXin first launched in GuangZhou China in January 2011. At launch, the app resembled most messaging apps with functions to text, create voice clips, and send photos. In August, WeChat started rolling out new features such as the “find nearby friends” and “send video clip” functions.

By early 2012, WeiXin broke the 100 million registered users mark and also chose WeChat as the official international brand-name of WeiXin. The first instance of a failed global expansion also occurred in India, as Indian consumers liked Facebook and Whatsapp better. Even so, with introduction of voice and video calls, WeChat Moments, QR codes, and opened access to WeChat brand accounts they were able to double their users in just six months.

In 2013, WeChat was caught for the first time censoring sensitive political messages from users around the world. This did not hinder its domestic growth, as by obtaining famous brand ambassadors, integrating a social gaming platform into the app, and offering mobile payments, WeChat was able to significantly increase their user base.

In 2014, WeChat made a strong push towards mobile commerce. Throughout this year, they partnered with many companies such as Didi Dache and JD (an online retail store) to create in-app programs that allows users to perform day-to-day tasks such as calling for a taxi and shopping online. Tencent also allowed WeChat’s business account holders to open stores in their accounts, allowing users to directly shop and pay for the item through WeChat.

In 2015, WeChat started allowing corporate accounts to use ad promotions that would appear right on an user’s Moments feed. This brought in a lot of advertising revenue for WeChat and also helped big brand names from across the world get exposure with WeChat users.

In 2016, WeChat decided to approach global expansion differently. Rather than trying to convert users of foreign countries, they started providing WeChat in target locations of rich Chinese tourists. WeChat also revealed the WeChat Enterprise accounts, which acts like a in-house social media platform for organizations, similar to Slack.

In 2017, WeChat reached 900 million monthly users and has become so integrated into everyday life in China that it is seen as a cash substitute. The launch of its mini-applications created even more versatility for WeChat user. To access things like “Mcdonald Coupons” , “Rent a Bike” or even play mini-games, users no longer have to download a new application, as it is built into the WeChat app. [2]

Tencent

Tencent is a “provider of Internet value-added services in China”[3], founded in 1998. Headed by CEO Ma HuaTeng, or Pony Ma, it is one of the top two biggest technology companies in China. Prior to WeiXin, Tencent was widely known in China for its MSN-like messaging service called QQ. This helped Tencent create a user-base for WeiXin by transfer its social-media users from QQ. The two main characters Tencent faces are Alibaba and Baidu. Alibaba is the more notable competitor due to the global exposure on their CEO John Ma.

Tencent is also the current global leader in games; holding 100% of Riot Games (League of Legends), 84.3% of Supercell (Clash of Clans, Clash Royale), and 40% of Bluehole (Player Unknown BattleGrounds). They continue to expand the types and quality of services they provide, with current initiative looking to expand into the search-engine market.

Difference Between WeiXin and WeChat

WeChat was first introduced in 2012 as the international brand for WeiXin. WeChat was designed for overseas users while WeiXin focussed on mainland users. In fact, the two versions are hosted on different servers and also have some notable differences. [4]

By Region

Depending on the phone number you provide on first installing and logging in-to WeChat, you will receive the WeiXin app if the number is based in China, otherwise, you will receive the WeChat version.

By Official Accounts

This is a notable difference; WeChat users are able to view and access all official accounts, while WeiXin users are not able to view or participate in any events hosted by companies with WeChat official accounts. This is due to the strict censorship laws in China used to control the content viewed by their citizens.

By WeChat Wallet

WeChat version users must authenticate themselves before creating a WeChat Wallet. Even with the authentication, due to the different currencies and regulations facing the use of WeChat Wallet in domestic vs foreign areas, there is very limited use of the foreign wallet in many areas around the world.

Functions Overview

WeChat is an all-in-one app for communication, socialization, interaction sharing, entertainment, and business functions .The main function is to provide users a platform to communicate that allows users to easily connect with family and friends across all over world.

1. Group Chat

a.Basic Chat
b.Voice Chat
c.Video Chat
d.Group Chat

2. WeChat Voice Input

Voice Input in WeChat supports English, Mandarin, and Cantonese Chinese, making it even easier for user to send messages when it is inconvenient to type. Also It is especially helpful for people who are only able to speak a language and not write.[5]

3. WeChat Group Chat

WeChat provides a new, quick,creative way to build a group for a bunch of people together in real life, it is called "Private Group”. Users can create a group and set up a four-digit code to identify themselves,and then allowing other people easily and conveniently join by entering the code.

4. WeChat Moments

WeChat Moments is WeChat's social network platform that allows users to share their own stories, pictures, articles and short videos with friends. WeChat Official Accounts are also able to post advertisements in the Moments feed, which will be discussed in a later section. When users post their "Moment", they have the right to decide which group can see it. The post can even be set to "private", allowing the user to use it as a tool for their personal timeline.

5. WeChat Translate Through “Scan”

WeChat now offers a extremely useful function: real-time translation using the camera called: "scan-to-translation". This function translates from English to Chinese and vice versa simply by scanning text. It is a great application for travelers going to China who are not able to speak and type Chinese. E.g. A traveler can scan signs at the train station, and restaurant menu from Chinese to English.[6]

6. WeChat Real-Time Location

Users can request to access another’s real-time location with a simple message within WeChat. If the other party accepts it, their real-time location is shared until they end the functionality. The main purpose of this function is to help two or more users find each other and conveniently meet up.

7. WeChat Find Nearby Friends

  • People nearby
    • An easy and creative way to looking for people nearby.
  • Shake
    • Shaking is connecting. A fun way to find and connect to others across the world by shaking his/her phone at the same time.
Mini Programs

8. WeChat Mini Programs

WeChat mini-programs are mini, low memory apps within the WeChat app itself that do not require a download. This allows WeChat to partner with service providers such as McDonald's or Didi DaChe to provide their services as a mini-program in WeChat. These mini-programs are a major-reason WeChat is so integrated into everyday life, and different companies are eager to adopt it as it replaces the need of creating their own app, which will cost much more money, will take up space on user’s phones, and will receive significantly less exposure than WeChat.

[7]

9. WeChat Game Center

WeChat Game Center offers a variety of easy and fun mobile games that allow users free to play and share with their friends. These mini-games combine strong social gaming and sharing, and a huge user-base, all while enjoying app experience without downloading anything. Also users can set an impressive high score and see how friends try to beat you by playing exciting titles, for example, Jump-jump and Craz3 Match.

10. WeChat Official Accounts

WeChat official accounts help companies establish cooperation with WeChat's users. It provides a communication and advertisement platform for company that can help them gather followers, send customer notifications, and redirect customers to a website or e-commerce page. Official accounts continue to increase in importance and effectiveness in brands’ marketing strategy[8]

  • Subscription Accounts
  • Service Accounts
  • Enterprise Accounts

Subscription Accounts

This is the most basic choice of the official accounts that most resembles article postings. It allows daily marketing of business content to followers. The account followers will see the update information in the subscription area.

Best for: content-focused business: news outlet, magazines

Available to: individuals and business

Service Accounts

Service accounts are best for business and organization in the service industry. These accounts are allowed to post four times in a month and updates will appear in the friends Moments page and appear as a friend's message.

Best for: sales and service company, like airplanes, banks, etc.

Available to: business only

Enterprise Accounts

Enterprise accounts are designed for internal company use such as sharing internal information, private group chat or as a simple project and task management system. In order to keep such internal networks secure and private..

WeChat Wallet

Using WeChat wallet users can now manage many financial feature within their lives. Users can transfer and receive money, store their credit ands debit cards, and also pay for goods and services.The following are WeChat wallet features[9]:

  • Money Transfer
  • Receive in Person
  • Pay Bills
  • Pay Utilities
  • Invest in Stocks
  • Pay for Enterprise Accounts
  • Pay Third-party Operators:Airplane,Hotels, Movie ticket, etc

WeChat Pay

WeChat Pay

WeChat payment is an in-app payment feature that is completely integrated both with WeChat and daily-life in China. It is currently available in Mainland China, Hong Kong, the U.S., South Africa and will be expanding to other regions in the future. WeChat businesses are able to use one of the following payment methods:[10]

  • Quick Pay

Vendors can directly charge customers money by scanning a customer's unique QR code.

  • QR Code Payment

Vendors display their unique QR codes for customers to scan. After scanning, WeChat is able to display product information, or can be linked to tables in restaurants to show customer bills and allow them to quickly pay.

  • In-app Payment

If consumers don't have yhe Wallet function, they are able to enter their payment information into the app when they are shopping on WeChat's marketplace.

  • In-app Web-based Payment

It is a similar to the in-app payment. Users can directly enter payment information instead of having to setup WeChat wallet when purchasing a product in the We-Chat browser.

WeChat’s Future Programs

ID Programs

Starting from December 2017, WeChat is teaming up with the Chinese government with a pilot program to incorporate personal IDs with their WeChat account. By using facial recognition software they can authenticate the WeChat account with the government issued ID. This pilot program started in the city of Guangzhou and has been extended to the whole of the GuangDong province due to its success. In the future, this could mean wallets will be a complete thing of the past, as even your official ID can be accessed on the phone.[11]

Citizenship Rating

China is also starting a citizenship rating program. This is essentially a social credit score that will determine the level of services and benefits you can obtain from different providers. For example, if one is blacklisted due to outstanding loans, one would not be able to purchase plane or train tickets.

Since WeChat is already piloting the official ID program, combining the citizenship rating to the WeChat account could be the next step. Since the program already uses facial recognition software that can authenticate users with a high level of assurance, the social rating score will not face significant privacy threat.

WeChat in China

WeChat is the number one social media platform in China right now. It has more than 900 million of active users and around 800 million of active users with official accounts. It has been a part of the daily life of many Chinese. WeChat pay is the highlight of the WeChat app. The top 3 situations the pay app is most used are in supermarkets, restaurants and online shopping[12]. Furthermore, it is an app for entertainment. Users use the moment platform to follow news, hobbies, and related accounts to know more about the social trends and also use the gaming center as a way to pass time.

WeChat Messenger’s Competition

Vs. Whatsapp

Compared to WeChat, Whatsapp has a simple interface with less buttons making it fast and easy to use. It is able to capture all age groups from young to old people due to its easy to learn feature. It also has the largest user base and is internationally used. Furthermore, Whatsapp has privacy policies that better protect the user. However, its simple style and use also leads to some areas that it is less attractive then WeChat in terms of functionality. Whatsapp does not support functions such as voice-input and in-chat translate, making it less appealing in the functionality area.

Vs. Line

Compared with WeChat, Line has high celebrity and public figure usage rate. One example is LINKIN park, who is partnered with LINE through creating cute stickers. LINE also produce celebrity stickers for different official accounts to increase the integration between the businesses with the personal users. Although it has more interesting stickers then WeChat, the users are concentrated in Japan. With an even stronger cultural image than WeChat, it has less potential to expand then WeChat.

Vs. Kakao

KAKAO is an app that is similar with LINE, it attracts people through stickers, however, it has limited communication methods and functions. Functions such as sharing real-time location and voice input put WeChat above Kakao in terms of functionality. Kakao’s major user-base is in South-Korea and does not present a significant threat to WeChat.

Vs. Signal

Signal is also a popular app that has potential but does not threaten WeChat. Since it has better security and encryption technology, it attracts users that are concerned about their communication privacy. The end to end encryption protects users from being hacked by third parties and ensure that communication is not being seen by anyone but only the sender and the receiver. However, it can be only used in one single device with a single phone number[13] . Since the user-base is solely comprised of people worried about the security of their communication it is also not a threatening competitor of WeChat.

WeChat Pay’s Competition

Vs Apple Pay

Apple Pay is generally better when comparing functionality and security. It supports offline payment and can also be used to withdraw cash in ATM. Similarly to WeChat, it has fingerprint identification software that provides strong security for users[14]. However, it can support less types of bank cards and can be only used by the apple device.

Vs Samsung Pay

When comparing WeChat pay and Samsung pay, Samsung pay has lower usage rate and is not a major competitor. However, it has the Samsung smartwatch and phone that provided a good platform for the pay app. Therefore, Samsung is partnering with WeChat pay to provide the pay service to Samsung users[15]. With this partnership, Samsung is able to take advantage of WeChat’s user base while WeChat takes advantage of Samsung’s payment platforms.


Vs AliPay

Alipay is a major competitor in the local and international market. They both have a competitive transaction fee and are widely supported by different devices. Also, people can use them to buy financial services, book for transportation, pay fines and even do car registration in China [16]. However, Alipay supports 18 currencies but WeChat can only support 9 currencies, and Alipay also has a bigger market share in the market, making it the top competitor for WeChat.

WeChat’s Business Analysis

How do they make money?

WeChat operates using a two sided network. They do this through facilitate a platform that connect users with web developers. This platform is the main driver for demand towards their e-commerce and payments business. For the users side, wechat provides a popular messaging app, portal to a huge range of third party apps and approved web applications. On the other side of the platform wechat connects web developers and provide them with a growing user base of a billion register users, as well as a set of sofitacted payment and messaging application programming interfaces(APIs). The these APIs are used to create rich user experiences that attract customers towards this platform. No matter if users are browsing, shopping, or looking for a service, the personalized UI will help business receive consumer awareness. Such integration of a messenger app, social media, and commerce does not exist in the West. Like many two side network, WeChat’s platform experiences positive gains from network effects. This means the more user that sign up for WeChat’s messaging and payment services, the more service providers are attracted to create web apps for WeChat. Wechat’s network effects drive demand for tencent’s core business of e-commerce and it’s payments business.[17]



WeChat’s Business Model

WeChat’s business model can be seen as a split into two segments. The first segment is WeChat’s traditional business model. This segment operates much like facebook, and provides values through enabling user with free messaging and voice call capabilities. WeChat delivers this value through their WeChat app platform, which is first a free messaging app as well as a portal to China’s leading service providers. WeChat than capture this value through advertising revenues. The second segment within Wechat’s business model is it’s digital business model. WeChat creates value in this segment through it’s 12 million applications and associate service providers. Like the first segment this value is also delivered through the WeChat app. They then capture this value through commissions on e-commerce and payments transactions. WeChat defends both segment of its business model through its large number of registered users as well as its unrivaled base of web developers and service providers who produce a diverse range of innovative applications. WeChat’s average revenue per user(ARPU) is estimated at $7[18]. This is seven times the ARPU of Whatsapp. This statistic can be attributed to WeChat’s more effective monetization of their services.


WeChat’s Advertisement Revenue

WeChat has three main methods of generating advertising revenue[19].

Method 1 WeChat Moments Advertising: Advertisements that appear on users timelines much like the moments shared by other users. This method is the most familiar method of advertising on WeChat for Western marketers.

Method 2 WeChat Banner Advertising: Marketers could pay for advertisements to pop up and be featured at the bottom of messages written by WeChat Official Accounts. Similar to banner advertisements you see on websites, the banner is able to simply display information regarding the company an app, or it is able to direct you to the product page.

Method 3 Key Opinion Leaders: Similar to Instagram stars, many marketers also approach popular WeChat bloggers in hopes to receive promotional posts regarding their product. The WeChat bloggers are paid either based on a flat fee, a results-based fee, or are given free products as compensation. These bloggers are known as WeChat influencers and are a big part of WeChat's advertising environment.

Ecommerce and Payment Transactions

The graph below represents WeChat’s Ecommerce and payments transactions revenues for 2017; dividing revenue created within it’s relative segments. Researchers estimate that these transactions amount to 1.76 billion dollars [20] in revenue for WeChat. Out of all of WeChat’s Ecommerce and payment transactions, the entertainment revenue stream occupies the first spot in terms of greatest revenue generated.



WeChat SWOT

Internal External
Strengths:


1.Support of parent company
2.Product life cycle very short
3.Free
4.High awareness
5.Good Returns on Capital Expenditure
5.Effective mergers & acquisition
7.Multi featured

Opportunities:


1.Opportunity to expand to new services
2.Favorable government regulation
3.Increased internet and smartphone users
4.Increasing globalization

Weakness:


1.Security > Privacy
2.Heavily based on chinese culture
3.Barriers of entry low
4.Trouble integrating firms with different work culture 5.High workforce attrition

Threats:


1.Availability of substitutes products
2.Currency fluctuations
3.Shortage of workforce
5.Change in customer tastes
6.threat of being copied


Support of Parent Company (Strength)

One of the core strengths of WeChat is that they receive strong support from their parent company Tencent. Being in operation within China for decades, Tencent understands China’s market very well. Tencent supports WeChat through integrating decades of data collected from their messenger app QQ as well as troves of information about the mobile habits from the company’s mobile game dominance. Tencent knows what the chinese population want out of a super app, and deliver it effectively through WeChat. [21]

Heavily based on chinese culture(Weakness)

As of today the WeChat super app is still heavily customized and geared towards the Chinese population. This can be shown from its in app functionalities that provides service that are more prevalent and unique within the Chinese culture. Examples of these functionalities include the ability to send red packets, rent bikes, purchase from food stand, and quick access to food delivery. To move into new markets WeChat would need to collect vast amounts of data from foreign nations, as well as increase their focus towards innovating new functions that would satisfy the cultural preferences of the nations they are trying to expand into. [22]


Increased Internet and Smartphone Users (Opportunities)

Research by business Insider projects that the global smartphone market is still growing at a steady pace. This growth was attributed to a widespread adoption of smartphone within the emerging markets. The researchers predict that by 2021, 2.1 billion[23] units of smartphones would be shipped into international markets. As well, a report published by euromonitor, predicts that in 2030, 53%[24] of the world’s population would be connected through smartphones.


Availability of Substitute Products (Threats)

The map[25] below shows the messenger app dominance in different countries. We can see from the map that WeChat currently only has significant dominance within China; Whereas other countries are already dominated by incumbent messenger apps. Studies show that once a network has established dominance within a nation, members of this network are significantly reluctant to switch onto alternative networks unless heavily incentivized. These characteristics are a large barrier for WeChat's international expansion plans.


Summary of SWOT

From our SWOT analysis, we can observe that WeChat has the financial power and operational efficiency to expand into new markets, but to be successful they must secure the proper workforce, diversify their services to be more culturally diverse, and create enough value that would incentivise customers to switch from incumbent messenger apps.

WeChat’s International Expansion

Why China and Not NA?

In this section, we highlight four main reasons why WeChat would not be successful within the north American market.

Mobile first mentality

The Chinese population is more mobile-centric compared to developed nations like the US. Studies show that in 2018 China holds 1.1b mobile internet subscriptions; this is three times the internet subscribers in the US. Furthermore, within China, by 2015, mobile purchases have already surpassed that of computer purchases. Studies show that US mobile purchases won't surpass internet sales until 2021. [26]


Communication preferences

Research[27] indicates that out of all the messenger app users in China, 80% of its users use their messenger apps daily. In comparison only 33% of the total users in the US report using their messenger apps daily. Studies also show that China’s average lower disposable income compared to that of developed nations encourages its population to substitute traditional SMS for no-cost communications using messaging apps.

Social commerce sophistication

WeChat does a really good job integrating user social experiences with the commerce side of the app. For example, instead of just getting information from official accounts, brands are now able to “socialize” with their customers; having one-to-one interactive conversations with customers promoting and selling the product. In the West, social media and Ecommerce are more fragmented. For example, Western social media users use Facebook to stay in touch with friends and family, while using Amazon for online purchases.

Breaking bad habits

The social media industry focuses on building user habits that increase the retention power of their incumbent messenger apps. Examples of habitual user behavior are routine checks on Instagram, commenting on online groups and communities, and commitments and obligations made online. This is another factor that limited WeChat's foreign adoption.


File:habit.jpg

WeChat’s Security Concerns

Account Protection

WeChat has taken considerable measures in order to protect their customer’s accounts. This begins with registration, where users are required to provide a phone number for verification. After an account is created, it can be either protected by a pattern password or personal password, similar to a smartphone. [28]

If someone tries to log into your account through a computer, it will require you the authorize the log-in from your phone. The application also allows you to freeze your account at any time by calling a number, accessing the safety center on the web (110.qq.com), or by accessing the WeChat Team account in one’s WeChat conversation. Both these features deter people from stealing your account and also gives you options for combatting a stolen account. [29]

Message Encryption

WeChat also uses a message encryption technology to make sure that customer messages remain private. It is important to note that they do not use end-to-end encryption technology, like Signal, which will only allow the end-users to view this message, the encryption technology used by WeChat allows the central server to view the messages. This choice may be to ensure that the Chinese government will have the ability to view sent messages. [30]

Payment Insurance

WeChat also has systems in place to protect your payments. The first line of defense is called the “WeChat Suspicious Behavior Analysis”. This analysis method is similar to what banks do for your credit cards. When a purchase is made, it is compared against your previous transactions based on the behavior and payment data of the transaction. If, for example, you make a purchase across the country in the middle of the afternoon, with local transactions in the morning and night, this will raise red flags for your account.

WeChat also partners with PICC insurance company in order to cover user payments. In the situation where your accounts is hacked and payments were made without your authorization, you are able to claim this money back. Furthermore, if you pay for an item or service and do not receive the product or service, there is also the opportunity for your payment to redeemed through the insurance service. [31]

WeChat’s Privacy Concerns

Censorship in China

The Great FireWall of China is a widely known censorship tool that blocks out many Western social media sites such as Facebook, Google, and Youtube. The Chinese government maintains a strong grip on potential influences on its citizens. Similar to the rest of the internet, WeChat is also subject to the monitoring and censorship of the government.

New CyberSecurity Law

The government introduced the new cybersecurity law in May 2017. This law is similar to FOIPA laws, in which they are both meant to protect users’ privacy and information. For example, one of the main points of these laws requires businesses to keep all customer information within domestic borders. However, China’s cybersecurity law grants the government more authority than reasonable. It allows them to review all stored data without even needing a valid reason. This law essentially allows the government access to all domestic customer data without any limitations or restrictions. Since both WeChat and WeiXin information is stored domestically in China, the government will have access to all information across both platforms.[32]

Message Filtering

The most prevalent form of censorship that can be clearly seen in WeChat is the filtering of messages that contain certain keywords. In the past, the app whether WeiXin or WeChat, would notify the user that the message they have sent contains a sensitive word and will not be delivered.

Presently, the message filtering has been toggled so it only censors messages on the WeiXin platform. Messages and pictures that contain sensitive topics or is geo-tagged to be near sensitive events such as riots, will appear to be sent, but will not be delivered to the recipient. Furthermore, although messages on WeChat may not be censored, the government will still have the ability to view all customer information on that platform.

WeChat’s Case Study - Censorship

Stephen Yan is a graduate of MA China Studies and has first-person experience with the censorship of WeChat. After participating in a protest against a poorly constructed Paraxylene (PX) plant in Dalian, China on Aug14, 2011, Stephen tried to text friends and relatives to seek support in this matter. He noticed that all messages that contained words regarding the protest were blocked. Other messages that just contained greetings were being sent through fine. [33]

Stephen also encountered censorship a second time in HongKong 2014. Due to protests, there were constant conflicts between the government and citizens. Stephen noticed that for a few days, users could not upload pictures to their Moments. [34]

WeChat’s Case Study - Public Chat Room Monitoring

Huang Shike got arrested in 2016 for discussing and teaching the Koran on WeChat group chat rooms. Chinese officials claimed that this teaching was disturbing the practice of standard religion and is also not a proper use for the internet. Huang had to spend two years in prison for just expressing his own religious beliefs. This incidence lead to controversy and it revealed that the government is actively monitoring group chat rooms. [35]

Difficult for Success in NA

After conducting our research and analysis, we believe that WeChat would have a difficult time pursuing success in the NA environment. This is primarily based on the following reasons:

  • NA individuals are less mobile-centric
  • Established substitutes create large switching costs
  • Cultural differences make WeChat much more attractive in China
  • Privacy concerns of the App

Due to NA individuals being less mobile-centric, there is a huge loss of opportunity for WeChat as the app strives for daily-life integration. The perfect WeChat user for Tencent would be one that uses the app for all aspects of daily life from payment, to shopping, to gaming, and to paying their bills. Since NA individuals do not spend that much time on their phone and prefer using their computer for online browsing and shopping, it is not a great target market for WeChat.

Next, since there are already established apps in NA that people use, for example Facebook, Uber, and Whatsapp, it is hard for an app like WeChat to convert the users. Since they are already committed to these apps, there will be high switching costs. Most services and people in NA use Facebook, Uber, and Whatsapp, it creates a loss in connection if singular users decide to switch to WeChat.

Thirdly, many WeChat functions are created to target the Chinese consumer crowd. Functions such as sending red pocket money, is unique to the Chinese culture, and will not help draw international users. Furthermore, many of the services provided by Tencent focus on Chinese citizens. For example, although WeChat Pay is expanding globally, the locations picked for expansion are those with large amounts of Chinese tourists. Many Mini-apps and payment methods are also only available in China.

Lastly, the privacy concerns caused by the Chinese government also creates a large resistance for adoption. NA users are especially concerned and protective over their online privacy. Since WeChat, like WeiXin, has their servers in China, they are also subject to the government’s cybersecurity laws. This means the government will have the means to view all conversation data sent. This privacy concern would be the main reason NA users would not readily adopt WeChat.

Evaluation

After the analysis, three options stood out for WeChat:

  • Rebrand internationally
  • Work with complement providers
  • Focus on existing market

However, due to the four factors identified in the previous section, the best option for WeChat is to focus on the existing market. Even though WeChat could see success by rebranding internationally or teaming up with NA complement providers, there is still a large issue of privacy and culture.

By focussing on the Chinese market, WeChat can continually improve and construct the application to suit all the everyday needs of a Chinese citizen. Since China has such a large market, there is still a lot potential in the market that WeChat can take advantage of. For example, the ID program shows that WeChat has the opportunity to team up with the government in future programs that can help their development. In addition, there is the greater-good mentality in China, so people are more tolerant of the loss of privacy if it means greater security and convenience. Therefore, WeChat should focus on the services they can provide for Chinese citizens and try to completely saturate the Chinese market before seeking to expand.

Authors

James Gong Alexander Cheung Tiffany Tong Jamelia Li
Beedie School of Business
Simon Fraser University
Beedie School of Business
Simon Fraser University
Beedie School of Business
Simon Fraser University
Beedie School of Business
Simon Fraser University

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  17. https://www.coursera.org/lecture/digital-business-models/lesson-3-how-the-business-models-of-xiaomi-and-wechat-work-TKYtb
  18. http://www.businessofapps.com/data/wechat-statistics/
  19. https://walkthechat.com/advertising-on-wechat-moment/
  20. http://www.businessofapps.com/data/wechat-statistics/
  21. https://www.theverge.com/2018/2/1/16721230/wechat-china-app-mini-programs-messaging-electronic-id-system
  22. https://www.theverge.com/2018/2/1/16721230/wechat-china-app-mini-programs-messaging-electronic-id-system
  23. https://www.businessinsider.com/global-smartphone-market-forecast-2016-3
  24. https://blog.euromonitor.com/2015/04/half-the-worlds-population-will-be-online-by-2030.html
  25. https://blog.uptodown.com/infografia-mensajeria-instantanea-uptodown/
  26. https://www.abacusnews.com/china-internet-report/china-internet-2018.pdf
  27.  ://www.whatsbroadcast.com/content/whatsapp-facebook-messenger-wechat-app-global-user-penetration-and-statistic/
  28. https://chinachannel.co/how-safe-is-wechat-pay/
  29. https://chinachannel.co/how-safe-is-wechat-pay/
  30. https://chinachannel.co/how-safe-is-wechat-pay/
  31. https://chinachannel.co/how-safe-is-wechat-pay/
  32. https://www.cnbc.com/2017/05/31/chinas-new-cybersecurity-law-takes-effect-today.html
  33. https://www.quora.com/Does-the-Chinese-government-monitor-chats-on-WeChat
  34. https://www.quora.com/Does-the-Chinese-government-monitor-chats-on-WeChat
  35. https://www.cbsnews.com/news/china-jails-muslim-huang-shike-teaching-islam-online-wechat-groups/
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