Chapter 2 Development Report on China s WeChat in 2013

Transcription

1 Chapter 2 Development Report on China s WeChat in 2013 Wenbo Kuang Abstract Since 2013, WeChat has entered a period of steady development. This report is a quantitative study of the development of WeChat in 2013 with a sample size of 1200 people from Beijing, Wuhan and Guangzhou respectively. From the perspective of the number of users, functional improvements, and business models, this report is a comprehensive review of the developmental status of WeChat and demonstrates that WeChat s development is in line with the diffusion of innovation theory. It explores features of WeChat, including user behavior, user structure, user relationship, etc. It analyzes the advantages of WeChat in communication, such as user-friendliness, multimedia communication, cost-free usage and higher user loyalty, as well as the disadvantages of WeChat, such as information overload, the proliferation of spam and poor security. In addition, this report does a comparative study of WeChat and Weibo in terms of communication modes and communication impact. The report finds that WeChat has greater credibility. The credibility of WeChat, Weibo, online news information, newspaper, radio and television news was 63.4, 38.6, 21.7, 19.6, 14.6 and 33.9% respectively. Finally, it looks into the future of WeChat and proposes development strategies, including conducting technological innovation, enhancing the user experience, strengthening strategic cooperation with operators and developing platforms to increase profit. Keywords Wechat Wechat users Credibility Since its official launch in January 2011, WeChat has achieved rapid growth, exceeding the expectations and imagination of the WeChat team. After three years of development, WeChat s functions have been enriched and improved gradually. Now, WeChat is deeply connected with people s daily lives and feelings, providing users with new communication experiences while moving towards commercialization through social networks. It is developing into a social e-commerce system. We conducted a quantitative study of the development of WeChat in 2013 using the method of random sampling. The scope of our investigation includes three W. Kuang (&) Journalism and Social Development Center, China People University, Beijing, China Social Sciences Academic Press and Springer Nature Singapore Pte Ltd X. Tang et al. (eds.), Development Report on China s New Media, Research Series on the Chinese Dream and China s Development Path, DOI / _2 35

2 36 W. Kuang representative cities in the Chinese mainland, namely, Beijing, Wuhan and Guangzhou. The investigation time was from December 1, 2013 to December 31, The respondents were classified according to gender, age, and occupation. The sample size was 1200 people, with 400 people from each of the three cities mentioned above. 921 samples were valid. 2.1 Analysis of WeChat s Development WeChat is a smartphone app launched by Tencent on January 21, It provides various functionalities, including text messaging, voice and video intercom, video chat, photo sharing, shake function to meet friends, QR code scanning, news, Didi Taxi, and discounts. It extends mobile phones traditional functions of calling and text-messaging to include voice intercom. It allows people to set up public platforms, share on moments (like a Facebook newsfeed) and send information to their followers. Users can add WeChat friends via their QQ number, mobile phone number, WeChat official accounts, shake, people nearby and scanning QR code. It also allows users to follow a WeChat public platform and share its content with their friends, chat groups and on moments. WeChat is not the first mobile Internet-based instant messaging app, and its design is not original either. It is modeled on the instant messaging software Kik launched by the Canadian Company Kik Interactive. The first product similar to Kik in China is MiTalk launched by Xiaomi Inc. MiTalk focuses on acquaintances, and contacts are completely from social friends. It is not widely accepted among ordinary users largely because of the lack of promotion. Overseas, WeChat also faces competition from foreign applications, particularly LINE. LINE is an instant messaging application launched in 2011 by NHN Japan, a subsidiary of South Korea s largest Internet company NHN. It provides free calls, free text messages and other services. It has more than 300 million registered users worldwide, and its distinctive sticker shop is considered by some netizens as the prototype of WeChat s sticker gallery The Number of Users Just 433 days after Tencent released the free instant messaging application WeChat, its user numbers exceeded 100 million. On January 15, 2013, the WeChat team announced that the number of WeChat users exceeded 300 million, and WeChat became the most popular communication app with the world s largest number of downloads and users. In addition to the Chinese mainland, WeChat was also widely used in Hong Kong, Taiwan, and Southeast Asia, and its influence began to increase. In July 2013, the Ministry of Industry and Information Technology released news, showing that WeChat had

3 2 Development Report on China s WeChat in over 400 million users in the first half of 2013 in China, bringing about a year-on-year increase of 56.8% in mobile Internet data revenues. On August 15 that same year, the number of registered users of WeChat overseas exceeded 100 million. On October 24, the WeChat team announced that the number of WeChat users exceeded 600 million. Three years after it was launched, data provided by the Product Department of Tencent showed that WeChat had over 270 million monthly active users at home and abroad. The year 2013 saw WeChat grow very rapidly. Breakthroughs were made in every aspect, from scale to functionality, from the domestic market to foreign markets, and from the number of WeChat users to user loyalty. On January 4, 2014, a new feature provided by an app called Didi Taxi was added to WeChat. As of January 2014, China s mobile Internet had 838 million users, including over 600 million WeChat users. 1 Its mobile phone penetration rate was 67.8%. The mobile Internet access flow was 133 million GB, representing a year-on-year increase of 46.9%, and the mobile Internet access flow per household reached MB. During the 2014 Chinese New Year of the Horse, WeChat launched the Lucky Money feature which stole Alipay Wallet s thunder. From the Chinese New Year Eve to the eighth day of the Chinese New Year, a total of more than 8 million users participated in the activity of grabbing WeChat s Lucky Money. The craze peaked on Chinese New Year Eve when an average of 25,000 red envelopes were claimed per minute. In March 2014, WeChat launched its payment feature. WeChat quickly occupied the market after launching and at one stage ranked first among applications from 27 countries and regions Functional Improvements From its launch to present, WeChat has continued to provide new social networking-centered features to facilitate information sharing and improve the user experience. At the same time, it has allowed users to set up a WeChat public platform, conduct bank card payments, scan barcodes, hail taxis, and other features through cooperating with third parties, thus steering the development of WeChat towards a new direction Improved Basic Functions Basic functions of WeChat usually refer to those of WeChat being a social networking tool. They are designed to further reduce the communication costs of users 1 The number of mobile internet users totaled 838 million and People s Daily, March 14, 2014, the 18th edition.

4 38 W. Kuang while enhancing user loyalty and attracting users to keep using the application instead of developing connections with third-party platforms. WeChat s basic function is messaging which can replace the functions of text-messaging, voice-talk, real-time talk, adding friends from mobile contacts and/or QQ friends list, Moments, voice reminders and drift bottle, etc Development of Derivative Functions Derivative functions mainly refer to WeChat-based functions that are provided by a third party. In the two major version updates of WeChat in 2013, more third-party functionalities were added to WeChat. Leveraging on these networks has gradually pushed WeChat towards integrated development. WeChat s derivative functions include enhanced bank payment; scanning of QR codes; allowing people to connect with strangers using LBS technology-based Shake, allowing businesses to send business information to potential customers any time; game centers; adding a bank card and making a payment, WeChat shop, etc Extension of Functions The WeChat public platform launched on August 23, 2012 was mainly for businesses, media, public bodies, stars and celebrities, individual users, etc. Its main functions include sending a large scale of multimedia information and customized information to its followers, interacting with its followers, replying automatically, etc. In this way, WeChat has provided marketing, customer service, public service and user management capabilities. The WeChat public account provides automatic and attended customer service functionality. After the first contact, users can obtain information by typing in simple commands. In addition, WeChat also allows people to communicate anytime and anywhere. With these features, WeChat surpasses traditional query modes by a mile. The diversification of WeChat s functions has profoundly changed its user loyalty, leading to the deep connection between WeChat and its users and making WeChat a kind of lifestyle Features of WeChat Users User Behavior In December 2013, we conducted a quantitative research on the development of WeChat in Beijing, Wuhan and Guangzhou. Results show that 90.6% of

5 2 Development Report on China s WeChat in respondents have used WeChat and the penetration rate of WeChat is very high. 74.6% of the WeChat users chose to use WeChat because their connections including friends, classmates, etc. are using it. WeChat is a social application which has gained popularity mainly by word-of-mouth and recommendations from families and friends. 25.1% of the users use WeChat out of curiosity, and they are the first group of WeChat users. 76.7% of the users use WeChat because it offers free voice call and text-messaging. This indicates that free features of WeChat have a strong appeal to users and stimulate users to recommend it to their social contacts. WeChat has a high frequency of usage. 57.6% of the users use WeChat once a day and 42.3% of the users use WeChat multiple times a day. To many users, WeChat is used more often than mobile QQ. In terms of the length of usage, most users use WeChat for less than 15 min each time, among whom 27% use WeChat for less than five minutes, and 39% use WeChat for 6 15 min. Only 34% of the users use WeChat for more than 15 min each time. Voice chat, used by 96.1% of the WeChat users, is the most favoured function of WeChat. Second to it is the function of sending pictures, used by about 70.8% of the WeChat users. 41.3% of WeChat users view photos on Moments, 33.7% share photos on Moments, 49.2% receive offline QQ messages via WeChat, 31.2% use the feature of people nearby, and 29.9% use the feature of Shake to meet new friends. These functions focus on social networking. In addition, 20.5% read Tencent news on WeChat, and 12.4% subscribe to WeChat public accounts User Structure In 2013, WeChat s user structure did not show obvious gender differences but was trending towards younger users. According to our survey conducted in December 2013 in Beijing, Wuhan and Guangzhou, 50% of the monthly active users of WeChat were males and 49% were females. In terms of the total length of usage per month, 47.6% were males and 52.4% were females. In terms of age, the largest group of users, 33.7% of the overall users, were aged less than 24. In terms of monthly income, the largest group of users, accounting for 32.0% of the overall users, was middle class with a monthly income of yuan. The user structure of WeChat suggests that the majority of users of WeChat are ordinary people who have great consumption potential. Therefore, it is a suitable platform for mass marketing campaigns Characteristics of User Relationship: Strong Social Relationships In terms of WeChat s user relationship, WeChat is based on strong social relationships which are based on mobile phone contacts or QQ contacts. Our

6 40 W. Kuang quantitative research shows that 81.6% of WeChat users added WeChat friends from their QQ friends list, and 62.4% added WeChat friends from their mobile phone contacts. After many years of development, QQ s user relationship is mainly acquaintance-based while mobile phone contacts are a reflection of the users real, core social relationships. In addition, WeChat has also easily established a strong real-name relationship which has always been unattainable for other social networking sites Business Model Became Gradually Well-Defined After WeChat 5.0 had been launched, the path to commercialization for WeChat became clearer gradually. Value-added services are a source of income for WeChat. To be specific, the paid stickers of WeChat, which resembled those of QQ show have begun to generate revenue. WeChat public accounts are divided into two types public service accounts and subscription accounts, which reduces information interference aiming to optimize user experience. Companies, enterprises and individuals can carry out marketing activities through WeChat s public accounts. For example, Beijing s Starbucks uses its WeChat public account to promote its brand culture, publish offers, attract users to visit the café and interact with users both online and offline. Along with WeChat payment, Shake lays a foundation for WeChat to enter mobile e-commerce and O2O. WeChat s Game Center introduces games as social elements and generates revenue through the interaction between friends playing games and life credit exchange. Purchases made within games have become a source of profit for WeChat. From the design of WeChat modules, it is foreseeable that the future profit model of WeChat is the integration of value-added services, games, marketing and e-commerce as well as advertising. In 2013, WeChat began to tap into e-commerce. On the Double 11th Day (Singles Day), the WeChat store run by WeChat and Tencent s Yixun concluded with more than 80,000 transactions, and the number of WeChat payments accounted for 13% of all payments. In the field of E-commerce, WeChat has many strong competitors, including Alibaba, JD.com, and Amazon. Therefore, it remains to be seen whether WeChat as a latecomer can surpass its predecessors and gain a foothold in this field. 2.2 WeChat s Communication Features WeChat is a representative product of mobile Internet. Its widespread use of WeChat has overthrown all previous modes of communication, bringing unprecedented interpersonal communication experiences and triggering a revolution in the field of interpersonal communication.

7 2 Development Report on China s WeChat in Advantages of WeChat Communication WeChat supports Weibo, QQ mail, QQ sync assistant, and other plug-in functions. It also supports messaging between Android, iphone, Windows Phone, Symbian and Blackberry mobile phones. It can be used by nearly all instant-messaging users. WeChat is in itself free. Compared with text messaging, audio and video communication features of WeChat allow the information sender and the receiver to conduct more direct and tangible communication; compared with QQ and s, WeChat has better reach; and compared with microblogging, it better protects user privacy. The advantages of WeChat communication are as follows User-Friendly Design and Operation WeChat breaks the boundaries of traditional network communication. WeChat users can communicate with their QQ friends, mobile phone contacts and even microblog users. This kind of cross-platform communication is a more convenient method of communication as users can simply use one tool to communicate with people using different platforms and from different circles. It allows users to save time by sparing them the trouble of familiarizing themselves with different products and improves the efficiency of communication. It also brings its users closer together and connects its users virtual and actual lives. WeChat allows its users to stay online all the time without taking up too much space or consuming lots of resources Multimedia Communication WeChat allows its users to send real-time text, image, audio and video messages, displaying the content of communication in an all-round, three-dimensional way. It fundamentally changes the form and structure of information and satisfies the needs of audiences with different reading, visual or audio habits. WeChat integrates voice, text, pictures, video and other means of communication so that both the sender and the receiver can fully and effectively express themselves. This diversified means of communication meets the various needs of users Open System and Free Use WeChat is almost completely free to use and has a very high cost-benefit ratio. It allows users to send free messages on different operators and mobile operating platforms using GPRS data. 30 MB of data allows you to send thousands of voice messages. Compared with mobile text messaging, which costs 0.1 yuan per

8 42 W. Kuang message currently, WeChat is almost free to use. Therefore, WeChat has left a huge impact on traditional mobile messaging and Fetion Higher Levels of User Loyalty All Tencent products from QQ chat to QQ mailbox have been galvanized to cohesively promote the use of WeChat. From a marketing perspective, the target market of WeChat communication is well-defined, namely, mobile QQ users. As one of the various instant messaging tools, mobile QQ occupies a market share of nearly 90%. Compared with MiTalk and other instant messaging tools which require users to register their information, WeChat is linked to QQ, QQ mail and QQ music, allowing users to log into directly without registration, add WeChat friends from QQ and receive messages offline. These advantages increase WeChat user loyalty and have caused WeChat to gain wider popularity Bilateral and Interactive Communication Since senders and receivers of communication based on WeChat are from QQ friends and mobile phone contacts, the relationship between the two parties is close. The main function of WeChat is voice chat which is similar to that of a telephone. In terms of user psychology and habits, voice chat enables the sender and the receiver to build a more intimate relationship. In an increasingly precise social network, senders and receivers of WeChat communication are mainly families, close friends, lovers and colleagues, which means that sender-receiver interaction in the process of transferring information and obtaining feedback is stronger Messaging Content More Private and Instant Due to the close relationship between the sender and the receiver, the contents of WeChat communication are more private. WeChat requires a user to send an initial friend request and wait for the other user s verification before he/she can interact with the other user and leave a message on the other user s Moments. A user s Moments can only be viewed by his friends, and the information sent by the sender and the receiver is only kept on mobile terminals of the two sides. Therefore, they are the only ones who can access the information while other users cannot access it on their own WeChat interfaces. This feature of WeChat protects the user s privacy, facilitates the communication of private information and blocks spam and malicious ads. Having integrated the functions of QQ and Weibo, WeChat allows more instant messaging. As long as the user is online, he/she can receive information and give feedback instantly. Furthermore, it also allows users to receive QQ offline messages and convey information quickly.

9 2 Development Report on China s WeChat in Communication Effect: Trustworthiness As senders and receivers of WeChat communication are mostly acquaintances, friends and relatives from mobile phone contacts, the information is more reliable and trustworthy. Through our quantitative research conducted in December 2013 in Beijing, Wuhan and Guangzhou, we noticed an interesting phenomenon. WeChat had the highest level of reliability, followed by Weibo. The reliability of WeChat, Weibo, network news and information, newspapers, radio and TV news was at 63.4, 38.6, 21.7, 19.6, 14.6 and 33.9% respectively (see Fig. 2.1) Disadvantages of WeChat Communication Information Overload and Floods of Spam Information overload on WeChat mainly refers to the problem of spam caused by the WeChat server pushing messages to users. WeChat is so designed that it pushes messages in real time and users will not miss any information. However, if WeChat abuses this function and pushes too much information than necessary, it will affect user experience and inevitably cause inconvenience to the customer, the way spam does. At the same time, many traditional media outlets have tried WeChat s official accounts in the hope of expanding their influence. If users follow many official accounts when most of them push highly similar information every day, they are liable to becoming impatient and harboring dislike. For users, overloaded information becomes spam Low Levels of Security WeChat is currently facing a variety of security issues including its inherent technical problems and security issues caused by poor security awareness among users. 70 (%) WeChat Weibo Online News Newspaper Radio TV Fig. 2.1 Trustworthiness of news on different media platforms

10 44 W. Kuang (1) Privacy Personal data accessed by WeChat and privacy of users is at the risk of being leaked if poorly managed (e.g. When your mobile phone is lost or through WeChat open platform). In addition, when users use the LBS function, information about users schedule and whereabouts may be leaked. (2) Malicious use Networking with strangers expands the scope of social interaction. Shake and Find people nearby created a new model of networking with strangers. But these features are likely to be abused by criminals or put into unethical use, leading to moral and ethical problems and even illegal activity. (3) Payment Risk The new WeChat payment function increases the risks associated with WeChat. WeChat is based on a customer server so that users can install WeChat on their own servers and communicate with other users through the server provided by Tencent. In this mode, the sender sends unencrypted information to a server, and then the server forwards the information to the receiver. Security risk exists in this process. 2.3 Development Strategies To deal with these problems, we propose the following suggestions: (1) Enhance user experience through technological innovation From a functionality perspective, WeChat s primary mission is to strengthen technological innovation in user experiences and enhance user comfort. 2 For example, although WeChat and LINE have the same real-time intercom function, due to data, signal, speed limits and etc., Chinese users seldom use this feature of WeChat. In contrast, LINE collaborates with Japan s second largest telecommunications operator KDDI and joins its free data app plan 3 by providing it with a customized LINE app, saving lots of data for its users while using the real-time intercom. The primary group of WeChat users is young people (born in the 1970s, 1980s, 1990s, etc.), 4 and WeChat was primarily used as a form of digital self-actualization. For young people, in the process of self-actualization, their pursuit of diversity and creativity of expression symbols is largely fulfilled by creative stickers of 2 Yang Yan & Jiangqiu Wu, On the way to WeChat s commercialization, Enterprise Guide, 2013 Issue Jia Ge, LINE knows better than WeChat about how to make money, Business Review, 2013, Issue Hui Tong, Self-representation of WeChat and interpersonal communication, Chongqing Social Sciences, 2014, Issue 1.

11 2 Development Report on China s WeChat in WeChat. WeChat has followed in Line s footsteps and currently has both free and paid stickers. However, WeChat s stickers are updated slowly (probably because sticker production technology is not mature enough and stable) and very few stickers are related to current affairs (e.g. WeChat has not cooperated with any famous TV series producer and TV series to jointly launch a series of stickers). Therefore, WeChat stickers can be developed further. (2) Strengthening strategic cooperation with operators Currently, mobile data plans are the most popular way among network providers to provide mobile data services, and their unit price is low. This implies that when mobile app users like WeChat users stay online all the time, the server pressure facing providers is not commensurate with data revenue because high-frequency data flow does not lead to large data consumption. When the number of users is low, providers may not feel pressed, but with the rapid development of WeChat nowadays, it will certainly pose a great challenge to them if hundreds of millions of users stay online. 5 LINE has set a good example for WeChat to follow regarding cooperation with operators. The partnership between LINE and its operators has long been harmonious. It explores cooperation patterns in a progressive manner, adopting different strategies in different regions and developing its capacity without sacrificing the interests of its operators. For example, in Japan LINE cooperates with the largest telecom operator NTT Docomo. They have launched a customized version of its app that allows users to enjoy free call services or paid but high-quality call services after choosing an NTT Docomo number. In Taiwan, LINE provides its operators with a wide range of services within the app to woo their support. For instance, the transition of the app from communication software into a life service platform. 6 (3) Develop WeChat platforms to expand profit models At present, WeChat mainly relies on third-parties to make a profit. This profit model is too simplified and highly risky. In order to expand its profit model, WeChat can follow the example of LINE and encourage users to pay. Despite the fact that WeChat has introduced paid services such as small games (with paid props) and paid stickers, it fails to achieve what Tencent QQ has achieved in the field of value-added services. In comparison, games operated on the LINE platform generate quarterly revenues of more than USD $50 million. 7 In addition to the third-party and value-added services, it is also recommended that WeChat develops enterprise public platforms and accounts. For example, 5 Shurong Zheng, A study on innovative options for cooperation with its operators from the debate on whether WeChat should introduce paid services, Telecommunications Industry Management, 2014, Issue 2. 6 Jia Ge, LINE knows better than WeChat about how to make money, Business Review, 2013, Issue Jia Ge, LINE knows better than WeChat about how to make money, Business Review, 2013, Issue 10.

12 46 W. Kuang Enterprise services are LINE s third largest source of revenue. In Taiwan, companies have to pay 20 million TWD to set up a public account. In addition, official accounts with more than 60 million followers are required to pay a monthly fee of over $USD16,000 to LINE if they choose to send 30 messages per month. 8 Additionally, developing e-commerce platforms is also a good strategy, as the majority of WeChat users are young people adept at using new media, and they would be the same target market who shop online. This has laid a solid foundation for the development of mobile e-commerce for WeChat. The introduction of WeChat s public platform makes targeted advertising possible. Information sent by platforms of enterprises and institutions can reach their followers who are potential consumers. This way of pushing information is essentially a kind of targeted advertising. Meanwhile, WeChat public account admins can manage users basic information and achieve more targeted marketing as a result. WeChat ads come in different types, including drift bottles (e.g. China Merchant s Bank s love drift bottles), interactive advertising, chat dialogues, posts on Moments, release of advertising information posted on public platforms, information on activities, promotional offers and new products sent in the form of text or audio or even games, etc. WeChat also allows users to chat with other people thousands of miles away based on the location-based services (LBS). By taking advantage of this feature of WeChat, businesses can launch promotional campaigns in exhibition halls, communities, business circles, schools and other places suitable for their products. They can also use the People nearby and Shake features to send real-time promotional information to the followers of their public accounts and attract their attention. WeChat advertising features in-depth communication, accuracy and precision, interaction, user loyalty and low cost. All in all, idle theorizing cannot solve these WeChat development issues. It is necessary to investigate the problems, take reality into account and adopt feasible measures to address them. Author Biography Wenbo Kuang Professor of the School of Journalism of China People University, Doctoral Supervisor, Researcher of the Journalism and Social Development Center of China People University. 8 Jia Ge, LINE knows better than WeChat about how to make money, Business Review, 2013, Issue 10, pp

13