We might think that we have it pretty good in the Western world of software application availability: for messaging we could use WhatsApp or Facebook Messenger; for sharing instant moments we go to Snapchat; and for sharing photographs we use Instagram. Not to mention the wide variety of applications we have available to us for transportation, food delivery, or fitness – so what is the problem?
While the issue does not lie in the functionality of each individual application, but rather the fact that there are just so many of them. Would it not be more efficient to just have one ‘super-app’ that encompasses all these different applications?
The Chinese application WeChat allows its users to do just that. This monopolistic application allows its 700,000,000+ users to chat and video call with their contacts, order food, shop, advertise, and pay – just to name a few of its functions (Wang, 2016). While what makes WeChat so powerful in China is due to a number of reasons, to me, the most critical success factor is the Great Firewall of China (Lee, 2016).
While this Firewall has blocked Western (and thus foreign) sites like Facebook and Google in China, it allowed the Chinese WeChat to thrive and grow quickly despite being a relatively young social media application. The low number of alternatives meant that WeChat has few competitors, as these potential threats are blocked and unable to pose a threat to the powerful platform WeChat has become. By locking in a large number of users, the application has achieved high switching costs, meaning that it is better for companies to have an active appearance on the application, rather than creating their own application. The high switching costs are accompanied by the now strong network effects within the application. This is driven by both the supply- and the demand-side. Companies offering their services on the platform (supply-side), and the users on the platform (demand-side) create benefits for each other and strengthen the network effects as a result – which further contributes to the overall success of the application. The more users on the platform, the greater the number of companies that that want to be on the application to benefit from the large number of potential customers that are active on the application.
Given the success of the WeChat in the Chinese market, it got me thinking about why Facebook hasn’t achieved or created such a similar application, and if it should. If Facebook opens up the development of this ‘super-app’ to third parties, I think it would not only benefit Facebook, it would add value to the average Facebook user as more services are offered to them.
References:
Wang (2016). It’s Time For Facebook To Copy WeChat. [online] Forbes. Available at: https://www.forbes.com/sites/helenwang/2016/08/11/its-time-for-facebook-to-copy-wechat/#2e76dfc74d05 [Accessed 21 Oct. 2017].
Lee (2016). 5 Reasons Why WeChat is Successful in China. [online] Hongda. Available at: http://www.hongdaservice.com/blog/5-reasons-why-wechat-is-successful-in-china [Accessed 21 Oct. 2017].
I agree that one ‘super-app’ would be very convenient to use, however what about competition that eventually leads to a better product? I think it is highly unfair to exclude other companies from competing against WeChat, as I have concluded from your article. I am therefore not surprised that WeChat has acquired such a large network. Maybe, if the great firewall of China would not exist, another company would be able to produce a ‘super-app’ that would even exceed the functions and possibilities of WeChat.
An interesting link perhaps: https://techcentral.co.za/wechat-makes-play-for-the-western-world/72844/
Apparently WeChat is no also aiming for the Western World and B2B market. I am interested to see what this will give rise to in the future. I think it is interesting that WeChat wants to focus on excelling at multiple functions, since most apps tend to focus on one aspect (e.g. paying, news, game, etc.).
Interesting topic!