|WeChat has taken China by storm and may look to cast a wider, tighter net in Asia — but why can’t it hook Westerners?|
#WeChat, the mobile messenger app that's been downloaded to more than a billion smartphones in China, is struggling to break into the North American market in the face of entrenched Western players and cultural differences.
About 650 million active users message each other, buy products, book travel and read news daily via the online social network that is perhaps more aptly described as an ecosystem.
Despite exponential gains in East Asia and a promotional campaign launched with high hopes in the U.S. in 2014, WeChat — owned by Shenzhen-based Internet giant Tencent — opted to cut off advertising overseas this year as user growth plateaued.
User acquisition in the West "has sort of come to an end," Tencent president Martin Lau Chi-ping told reporters in March.
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Ning Nan, an assistant professor at the University of British Columbia's Sauder School of Business, highlighted Tencent's lack of customer base or local networks in the U.S. as a key barrier to competing against instant messaging heavyweights like Facebook.
"Tencent already had a very successful chatting tool — QQ — at home (in China)," she said. That desktop messaging feature had been around for more than a decade before WeChat launched in 2011, and now boasts more than 830 million active users. "It's not that hard to leverage their existing customer base to push out this mobile messaging base."
Cultural incongruity might add another hurdle. "In China, the boundary between work and social life is not so clear. A lot of times, people mix up their colleagues and friends into the same online social groups. WeChat is really meant for that," Nan said.
Facilitating hundreds of thousands of payment transactions a day, WeChat could find the differing financial regulations in Chinese and North American jurisdictions a hindrance as well, Nan said.
"In my view, they have to form some partnerships with the platform companies in North America, such as Facebook or some other social media platforms, because they do need local support," said Nan.
A more "North American" take on the product might be needed to overcome the cultural divide, she suggested — though WeChat already diverges from Weixen, or "micro-message," the app's Mandarin-language original in China.
Or maybe calls for westward expansion are overblown. WeChat's active user based leapt 30 per cent between December 2014, when it claimed 500 million members, and November 2015. It already has at least 70 million users outside China.
Tencent's third quarter earnings in November trumped analysts' expectations with a 32 per cent increase in year-over-year profits to $1.6 billion.
Instead of trying to establish a firmer foothold overseas, Tencent recently opted to expand WeChat's already vast ecosystem within China and Southeast Asia. That could shore up a pool of dedicated users who spend the bulk of their time on mobile using WeChat, according to Forrester Research.