404 Trojan Horse Messaging

Trojan Horse Messaging

Many in the west do not appreciate the mobile messaging phenomenon that is sweeping through other countries. WeChat, WhatsApp, Line combined have over a billion users. Viber was a fast growing messaging app Japanese retailer Rakuten announced last night that they acquired Viber for $900 million dollars. Their CEO called it a “no brainer.”

I use this chart, to show the user scale of select messaging apps / platforms.

Screen Shot 2014-02-14 at 10.15.30 AM

Messaging apps started to gain momentum as consumers in emerging regions elected to pay for data services rather than text messaging services. Many in emerging markets were driven to buy their first smartphones so that they could use Facebook and a messaging app of choice. I like to use the analogy that in emerging markets, Facebook is acting like AOL, and the messaging apps are acting like AOL IM. Both were key drivers in many western consumers getting online for the first time.

However, once messaging apps like WeChat in China begin to take advantage of their captive messaging audience, they started implementing things that turn the service into much more than a messaging app. Messaging, as it turns out, was the trojan horse for a much bigger ecosystem play within these messaging apps.

Last year WeChat launched a new payment service which supported Tencent’s popular commerce store Yixun. Think of it as a store similar to Amazon but in China. Now from WeChat consumers can do all their shopping as well directly from within the app. What is becoming clear in China is that messaging apps are becoming a walled garden for services more than just a messaging platform. Increasingly mobile messaging apps are contributing to a growing mobile commerce environment in China. Note this chart from iResearch out of China.

Screen Shot 2014-02-14 at 10.11.31 AM

While a comprehensive study can also be done to showcase what LINE and WhatsApp are doing to evolve beyond messaging, I’m interested, for the time being, in thinking about how or if western markets may adopt a similar environment where a single app becomes a dominant form of not just communication but also commerce.

Could Facebook evolve into this? Twitter? What about Amazon? Someone new? Right now mobile shopping in western markets is largely dominated by Amazon and its app as well as local retailer apps like Target. While it is possible to have a comprehensive mobile commerce experience in western markets it requires multiple apps to do so. Where this becomes interesting where an app has commerce but also a contact list of friends is the friend recommendations or what my friends are buying types of features. This is entirely missing in western markets. Which would mean that logically a company like Facebook or Twitter could conceivably add more commerce features or integrate with online retailers in more meaningful ways. Perhaps Apple, or even Google could also take their solutions more in this direction. Apple already has over 600m credit card numbers so perhaps they are in a position to integrate many many of the key features of messaging apps around iOS. In this case iOS is acting as the total platform like messaging apps are today. Food for thought.

  • Bernard Desarnauts

    Very good one especially in light of What’sApp FB today

  • http://about.me/neillk Neill Kramer

    Yes the trend to share real-time commerce experiences with others is long past due. I built something 6.5 years ago that worked via IM (jabber) and amazon: https://www.youtube.com/watch?v=-WCZ96pWZ9c