WeChat-ification Of Africa: Can China Compete With WhatsApp?

WeChat-ification Of Africa: Can China Compete With WhatsApp?

WeChat, China’s largest messaging app, has struggled to gain a foothold in Africa and markets where it competes with WhatsApp, Facebook Messenger, and Viber, among others, Techcrunch reported.

This year WeChat started investing in South African startups in the hopes of becoming the Internet of Africa.

Text messaging still dominates in countries with low smartphone penetration rates, but in countries like South Africa and Nigeria where there are many more smartphone owners, messaging apps are quickly gaining traction.

Acquiring WhatsApp in 2014 year gave Facebook an advantage across Africa. WhatsApp accounts for about 11 percent of web traffic on the continent, double that of Facebook itself, according to Wired.

For now, WeChat is focused on South Africa where it has a potential advantage, Quartz reported. WeChat Africa is a joint venture between Chinese Internet giant Tencent and South African media giant Naspers. Naspers has a 34-percent stake in Tencent, with its Johannesburg Stock Exchange share price largely dependent on Tencent’s success.

How big is WeChat?

It has 650 million monthly users — mostly in China —  and 93-percent penetration in major cities. Users can invest money, get loans, order a taxis, pay bills, and find dates with 10 million-plus third party apps, Quartz reports. Users never need to leave the platform.

“We’re stuck in an extremely aggressive, competitive environment, very fast-growing, very difficult to differentiate oneself. So what we’ve done in (South Africa)—and we are replicating this in other African countries as well—is focus on the power of the platform,” said WeChat Africa head Brett Loubser in a Quartz interview.

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He said his mission is to make the app the “central point of control” of a person’s day-to-day life” by offering transactions, e-commerce and a second screen for interacting with TV shows.

WeChat Africa is following a strategy familiar in Silicon Valley: get the users first and worry about the revenue later, according to Quartz.

Facebook and WeChat are watching each other closely, and trying to make themselves in the image of the best the other has to offer, Marketplace.org reports:

Facebook is turning Messenger into a platform of its own, making it resemble the China’s WeChat and other popular overseas messaging apps. These apps haven’t taken off in quite the same way in the U.S., but abroad they’re huge. Facebook has already built some spin-off apps on that work with Messenger, and it’s testing a virtual assistant that lives inside it.

“WeChat is kind of the gold standard for functionality and utility in an app,” said Debra Williamson, an analyst with EMarketer. “I think the idea is to learn from the kinds of functionality and WeChat offers and see what can be built or bolted onto Messenger or WhatsApp.”

WeChat said in a blog it chose Cape Town-based Tech strategy firm Batstone to find and and coordinate its early stage investment opportunities.

A $3.4 million fund in South Africa is expected to help WeChat achieve rapid market access — considered one of the top growth inhibitor for tech-enabled businesses, according to a recent Emerging Companies survey by PwC and Silicon Cape.

There’s a benefit to honing new features with a very small audience, especially as social media users say apps are becoming too complicated, Marketplace.org reports. Facebook’s many failures are key to its success. Messenger, with over 700 million active users, is really the only unqualified success Facebook has had.

Earlier in 2015, WeChat invested in South African apps accessible only through its platform. These include Money For Jam (M4JAM) which connects people with temporary microjobs exclusively through WeChat and PicUp.

WeChat has a team in Nigeria, and has partnered with two Nigerian startups to launch on its platform, but still has just 3.4 million users in a country of 173 million, according to SocialBakers. WeChat is not transparent about users and user growth in Africa, Quartz reported.

Loubser told Quartz that WeChat has only been in Africa for two years, and is in it for the long haul. “It’s early days. Who knows where WhatsApp was two years in. We’re only at the very start of the message-driven revolution.”