Platform mediated Networks are taking over conventional business models. In our blog and video, we want to compare one the biggest platforms in china; WeChat and Alipay. Alipay and WeChat are global lifestyle super apps offering an extensive online ecology and creating positive cross-side network effects.
Alipay is a third party online payment platform with no transaction fees. And was founded in 2004 by Alibaba group; currently the biggest online retailer in China. And the app has 400 milion of active users
Due to the low confidence towards existent payment companies in China by their customers, Alibaba group has started its own payment service in order to give their customers a trusted way of making online payments. Alipay keeps the custody of the money during a transaction in order to guarantee that the product is delivered before releasing the money to the supplier. They ensure user’s payments are always protected and user information is never passed on to any other parties for commercial use.
WeChat is a cross platform instant messaging service. That has been founded in 2011, and recently has started offering WeChat payment and has about 800 milion of active users.
WeChat works in the way that it makes a connection with the bank account of the user in order to make the payments. Integrating this feature into the app makes payment faster for users and offers a lot of other services like shopping, hotel reservation, taxi and financial services.
Instead of using cash money or expensive credit cards, users of WeChat and Alipay can now pay with their smartphone. The selection of the product or service that is required and the payment now work on the same device. Users can also transfer money to other members and share or split bills among them using QR codes. Alipay and WeChat can be used to pay utility bills, top up mobile phone credits, buy train tickets or check the balance of a connected bank account
Both platforms are open platforms meaning that they give away some of the platform value to third parties who develop apps and other services that run on the platforms of Alipay and WeChat.
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Alipay doesn’t sell data from consumers to third parties, Limiting on all kinds of technology and missing revenue.
WeChat on the other hand has the information privacy dilemma, so users may make a consideration whether the platform is worth enough to sacrifice their privacy.
The market is suited for multiple companies because of a high network value, low multi homing costs (it’s no problem of having both apps, and cancellation and starting is easy) and a high demand for new features makes this market a multi homing market.
Although more platforms can co-excist in the market but because of the better integration of features into the WeChat app, and the potential of selling customer data. Our prediction is that WeChat will have a better chance of becoming the most successful global platform for all kinds of services.
Team 55
When One App Rules Them All: The Case of WeChat and Mobile in China
www.ru.nl/publish/pages/769526/z01_rongbing_liu.pdf
http://www.marketingfacts.nl/berichten/wechat-meer-dan-alleen-een-mobile-messenger
http://www.economist.com/news/business/21703428-chinas-wechat-shows-way-social-medias-future-wechats-world
https://www.youtube.com/watch?v=38uLiIQmgIk&feature=youtu.be
