{"id":4054,"date":"2017-02-26T16:42:20","date_gmt":"2017-02-26T21:42:20","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/wechat-the-one-app-that-rules-them-all\/"},"modified":"2017-03-28T12:10:09","modified_gmt":"2017-03-28T16:10:09","slug":"wechat-the-one-app-that-rules-them-all","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/wechat-the-one-app-that-rules-them-all\/","title":{"rendered":"WeChat \u2013 The One App That Rules Them All"},"content":{"rendered":"

In the mobile-first world of China, has built a \u2018mobile lifestyle\u2019 touching various aspects of users\u2019 lives, with an average user opening WeChat 10 times a day and spending ~40 minutes per day [9]<\/a>. Initially launched as a messaging app to send texts in 2011 by Tencent (one of the three Chinese tech giants \u2013 Baidu, Alibaba and Tencent), it has evolved from just an \u2018app\u2019 to a \u2018platform\u2019.<\/p>\n

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Figure 1: WeChat’s Monthly Active Users (MAUs) growth [6]<\/a><\/figcaption><\/figure>WeChat was one of the few apps that were introduced as mobile-first product amidst rapidly increasing smartphone penetration in China. That helped WeChat become one of the fastest apps to have over a billion registered users [1]<\/a>. The growth of Monthly Active Users (MAUs) has been phenomenal with the last reported figures of ~850 million MAUs in Q3 2016, primarily from Asia. This is just ~150MUAs fewer than Facebook and WhatsApp which are still largely messaging apps. WeChat today in China is a single app for Facebook, WhatsApp, Messenger, Venmo, Grubhub, Amazon, Uber, Apple Pay and many other such services in the West.<\/p>\n

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So how has WeChat done it all?<\/strong><\/p>\n

WeChat has benefitted from very strong network effects \u2013 both direct and indirect – in the Chinese mobile-first market. The more users they got onto the platform, the more other users wanted to join in order to be connected with their friends and families. Many Asian American people got onto WeChat just so they could remain connected with their relatives back in China.<\/p>\n

Further, WeChat was smart to open up the platform to third-party developers, who started offering their services on WeChat platform. String indirect effects apply here \u2013 more users on the platform, more and more third party developers want to offer services on it, and vice versa.<\/p>\n

With such strong network effects\u00a0and low multi-homing environment, WeChat emerged as the app \/platform or rather an ecosystem that rules them all.<\/p>\n

WeChat\u2019s payment service benefitted from the high mobile spending (e-commerce) in China as compared to US, with 87.4% of China\u2019s Internet users regularly accessing Internet via phones. [2]<\/a> In fact the Payments feature on WeChat has become a threat to Alipay.\u00a0[11]<\/a><\/p>\n

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Let\u2019s look at the incentives of WeChat, users and the brands\/merchants\/third party developers.<\/p>\n

Users<\/strong><\/p>\n

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Figure 2: Screenshot of services offered on WeChat platform [1]<\/a><\/figcaption><\/figure>The one integrated app allows a user to:<\/p>\n