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Good Morning, America! Shall WeChat?

by User Not Found | Jan 28, 2014

In its Top 10 Wireless Media & Apps Predictions for 2014, Strategy Analytics’ Wireless Media Strategies included one on “WhatsApp overtaken by Asian OTT messaging services LINE Messenger and WeChat”.  We are not out of January yet, the first shot of the battle is already fired.

On January 25, WeChat announced that it is teaming up with Google to target new users in the US.  WeChat’s users based in the US are encouraged to link their Google accounts with WeChat, and then invite their Google contacts to join WeChat.  When 5 invitees accept the invitations and sign up for the service, the inviter will receive a $25 worth of gift card that can be redeemed at any eateries that are members of Restaurant.com

While the potential gain for WeChat is obvious, i.e. increased user base and geographical reach, we feel Google’s participation interesting, as Google Hangouts is practically a direct competition to WeChat.  Presumably, by embracing a competition, either Google concedes that Hangouts progress in expanding into smartphones has been too slow, or this is just a short-term tactical decision to gain access to the new user data.

This is another bold move by the Chinese OTT messaging service to expand overseas.  Although the vast majority of WeChat’s 270M users are in China, it has recently won some traction in southern Europe, the Middle East as well as Latin America, which may owe partly to its earlier global advertising campaign using then FIFA Ballon d’Or winner Lionel Messi in its ads. 

The back-scratching tactic to recruit new users is not necessarily new.  In 2003 PayPal famously offered $10 to both the inviter and the invitee to their service.  WeChat’s reward scheme is however just to the inviter side, making it less incentivising for the invitees.

However, WeChat may find the US, one of the strongholds of WhatsApp and home ground of Apple’s iMessage, harder to crack, as the nature of IM defines that unless one service reaches a certain scale, it is hard to swing the next group.  WeChat’s new move with Google is clearly targeted at winning the first sizeable group.

WeChat has its strengths too.  It has richer features than both WhatsApp and iMessage, for example the value-added services it offers on the platform (similar to those offered by LINE Messenger and KAKAO).  In addition, the 3.8M strong Chinese community in the US may be an attractive first target group as WeChat provides an easy tool for them to communicate with their relations in China.

Admittedly, this is just a water-testing trial.  The offer will close on January 31.  Gimmicky and unsustainable the cash reward may be, we wouldn’t be surprised if WeChat, and other Asian OTT IM services, should come back with more innovative and more aggressive measures to vie with WhatsApp and co for users in the western markets.  Even if only to prove our prediction right.

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