Look out Apple, there's a new app in town.
WeChat – China’s most popular messaging app and mobile experience ecosystem – sent shockwaves through the country when it announced that it would be opening up its services to U.S. advertisers.
On September 21 the app's parent company, Tencent, introduced a new ad platform designed to attract western brands and ad agencies to the app. With the announcement came the news that [quotesright]major U.S. players Zillow and Rebecca Minkoff would be signing on as launch partners. [/quotesright] The move prompts several important questions:
- What effect will this news have on worldwide trade?
- Does the move threaten the popularity of western-based apps?
- How could this expansion impact your business?
- What dangers lurk in using the app?
What Users Love About WeChat
If you aren't familiar with the wildly popular Chinese WeChat app, you might be wondering what the buzz is all about.
[quotesright]Unlike its competitors, WeChat has successfully made their app truly a one-stop shop.[/quotesright] It has managed to combine personal and professional services offered by a host of different apps to offer an all-in-one package.
Here are just a some of the things that users can do with the WeChat app:
- Chat via messaging
- Access social media
- Make payments
- Stay up to date on the latest news
- Book a hotel
- Arrange dates via the app's dating feature
- Arrange a taxi cab ride
- Make phone calls
- Connect with colleagues
- Order food
- Update their calendar to include reminders
- Send and receive emails
Although many users depend on WeChat's services for their personal lives, the app has become a notorious tool for use in the workplace as well. [quotesright]The benefits of group messaging, email features, and others have been embraced by many Chinese companies. [/quotesright]
Since its launch in 2011, the WeChat app has seen a virtual explosion, quadrupling its monthly active users since 2013. Recently, after being introduced just six years ago, the number of estimated [quotes]users had reached a whopping 963 million.[/quotes]
The Wall Street Journal claims the number of active monthly users is closer to one billion.
WeChat Named as ‘Apple's Toughest Rival’
On the cusp of the latest iPhone's model release, a widely-read news source described the WeChat app as Apple's toughest rival. This is because the app facilitates so many popular mobile computing functions – functions that are divided between many individual apps on an iPhone.
This threat to Apple seems to be evidenced by the fact that during the last fiscal year, Apple sales in China dropped 13 percent, pushing it down to fifth place among cell phone manufacturers. In fact, the WeChat app reportedly averages 35 percent of each user's monthly smartphone usage time.
This past August, [quotesright]Apple began accepting WeChat as a form of payment. [/quotesright] Apple blames the Chinese app for their users dropping to 50 percent, while in other countries that number is around 80 percent.
The western-based tech giant has definitely taken a hit, which undoubtedly, came to many as a surprise. Although, it appears that Apple has attempted to take the loss mostly in stride.
Apple CEO Tim Cook said that the company is up to the challenge and plans to stay active in China. Further, Cook points out that Apple has created 5 million jobs in China, and, that he's not sure "there are too many companies, domestic or foreign, who can say that."
China's Alibaba Unleashes Competition in the Work Place
It's not just western-based tech giants that are feeling the heat from WeChat.
The worldwide internet sensation, China's very own Alibaba, attempted to create a desktop version of the all-in-one when it revealed its own Ding Ding app, specifically to compete in the workplace.
The app offered a variety of benefits for its professional users, including these features as described by one of China's leading business news sources "What's on WEIBO":
- Global address book
- Customer management system
- In-office messaging
- Conference call notification
- Secret messaging function
- Smart Attendance, which generates automatic attendance times of employees
- High Definition video
- File sharing and saving business cloud
- Request processing for time off approval
You might think that this would create a major trend among office workers. And many professionals were initially attracted to the never-before-seen features designed for the workplace offered by Alibaba's "Ding Ding" app.
[quotesright]However, since it's conception, the app has been criticized by many business users. [/quotesright] Employees have complained that the app has infringed on their personal lives and violated their privacy. Others say that they feel like they are always at work.
While the app has not been a total wash-out, it hasn't achieved the star status of the WeChat app.
The Criticisms Surrounding WeChat
WeChat has been able to combine app functions of many of the most used and favored apps of the western world, including the likes of SnapChat, Twitter, Facebook, Tinder, and others.
[quotesright]Its features span far and wide. In fact, there's not much of anything that this app can't do. [/quotesright]
What could critics have to complain about? Is there a downside that's plausible?
Well, as it turns out, amidst all of its greatness, there are some major criticisms of the WeChat app.
[quotes]A major turn-off is WeChat makes user information available to the Chinese government. [/quotes] This is a potentially dangerous characteristic, especially for foreign users whose countries may be in conflict with China.
In the past, it has been reported that China's government has used personal information in potentially harmful ways. Unfortunately, the makers of WeChat do not widely publicize the data sharing “feature” of their app. [quotesright]Many users, including non-native consumers, may not even know that the Chinese government is privy to practically any user's private information that is conducted through the app.[/quotesright]
Recently, news sources have begun to highlight this discovery to spread awareness to the United States and other concerns who have begun considering how they can break into WeChat's marketplace.
The New York Times recently released a video warning consumers of the potential risks involved with the increasingly famous WeChat app. In their video, they disclose how user information may be transferred to the Chinese government. They describe how [quotes] leaking information about their private lives could cause major problems.[/quotes]
What You Need to Know
One point the Times video makes is how the app could affect its users and the U.S. negatively.
Although the many benefits of the app appear to be persuasive, one must ask if users are willing to accept the consequences of losing their privacy and perhaps their freedoms.
[quotesright]This news comes at a crucial point in time due to the recent availability of WeChat for United States-based advertisers. [/quotesright] And, with major American endorsers signing on, it becomes even more tempting for U.S. companies to jump on board.
[quotes]Jumping on board this sensation could open new markets and offer other tangible benefits to businesses seeking growth, and these are unquestionably attractive considerations.[/quotes] And, it offers American businesses an easy route into the Chinese market.
However, is the risk worth taking?
[quotesright]It could be catastrophic for these companies[/quotesright] if consumer information was passed along to China's government officials. This type of private information could be turned against them.
In fact, Americans would be likely to find this infringement of privacy unforgivable. In instances such as these, companies could find themselves on the verge of destruction, if not completely ruined.
While there may be safeguards in place that decrease the likelihood of these types of privacy breaches, [quotesright]it would be wise to consider all possibilities prior to making any agreement. [/quotesright]
In-depth research should be performed before contracting with a company whose policies differ significantly from typical American business practices.
The Wrap Up
The take away for American businesses considering how they can enter the [quotes]WeChat market might be more cautionary than encouraging.[/quotes]
At first glance, the potential for growth and profit might grab the attention of business owners. But on further examination, any affiliation with WeChat should be approached keeping in mind the potential dangers along with any benefits it may offer.
Finally, there are a number of ways to improve your company's outlook and production outside of aligning your business with WeChat. Many of these would greatly benefit both small businesses and large corporations.
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