By Andrew Thompson
Remember Facebook Home? You might not. The so-called Facebook phone departed the tech world soon after its release with the reputation as perhaps the company’s most spectacular flop.
Facebook had tried before—and has tried since—to become everything to consumers, a bazaar of built-in functionality that renders other apps obsolete. It’s had some minor successes (like incorporating a payment feature into Messenger), but its efforts have mostly foundered. As Jordan Edelson, CEO of app developer Appetizer Mobile, assesses Facebook’s ambitions, “It will never be a WeChat.”
WeChat has spent the past five years turning itself into the object of every developer’s and investor’s envy. Nearly 800 million people use the China-based messaging service every month. That’s fewer than WhatsApp’s one billion users, but the companies’ revenues differ by orders of magnitude: WhatsApp brings in about $50 million per year, while WeChat, by virtue of the volume of commerce that passes through its platform, reaps $1.8 billion in mobile revenue.
“Messengers could have gone one of two ways: create a messenger and that’s it, or create all this functionality and create a one-stop shop for anything.”
— Jordan Edelson, CEO, Appetizer Mobile
A One-Stop-Shop App, By Design
All day, WeChat users’ can text, shop and pay while rarely leaving the app’s versatile platform. What started as a data-based messenger that allowed people to bypass texting charges is now the place to schedule doctor appointments, call taxis, book restaurant reservations and pay bills.
Part of WeChat’s success is due to design. Early on, Tencent, WeChat’s parent company, made it easy for small developers to add functionality to a service already used by millions of people, making its SDKs and APIs readily available at a time when messaging services were still figuring out their potential. “Messengers could have gone one of two ways: create a messenger and that’s it, or create all this functionality and create a one-stop shop for anything,” Edelson says.
But the key to WeChat’s success mostly lies in chance and circumstance. For one, most people in China experienced the internet on mobile before desktop and needed a messaging service to avoid carrier fees. That allowed WeChat to facilitate connections between hundreds of millions of consumers through a service they were already using every day.
And critically, WeChat’s pervasiveness allowed it to build a relationship of trust with Chinese consumers. In China, questionable companies come and go, fraud is rampant and—compared with U.S. consumer protection laws—safeguards seem relatively lax. “In other countries, there’s more of a trust issue,” says Rurik Bradbury, the Head of Research for LivePerson, a messaging platform for businesses. “The more you can centralize that payment issue and the collection of data, the less of a trust issue you have.” It doesn’t hurt Tencent that the Chinese government maintains tight control on what apps are allowed through the Great Firewall—being allowed to exist is a big part of the battle.
“Having a powerful company convincing you to hand over all their data troubles a lot of brands, and if they have a choice, they’d rather not.”
— Rurik Bradbury, Head of Research, LivePerson
An American WeChat?
In general, American consumers are far more likely than Chinese consumers to delegate individual tasks to separate apps. And because of Americans’ willingness to engage with those apps, the brands that run them are less compelled to navigate another platform that isn’t their own. “Having a powerful company convincing you to hand over all their data troubles a lot of brands, and if they have a choice, they’d rather not,” Bradbury says.
The result is that efforts by social media platforms to expand—the way Facebook Messenger offers to call a taxi every time you mention “ride”—often feel annoying.
Edelson sees potential for an American WeChat-style mega-app in the future with some still-nascent piece of technology, based in something like artificial intelligence instead of messaging. But what that might look like is hard to predict.
“The time has passed for a U.S. WeChat,” says Bradbury. “There was a very particular set of circumstances in China that allowed that to take place, the same way the time has passed for an Indian competitor to displace WhatsApp. WhatsApp won that battle; on to the next one.”