An article by Polina Hristova Journalist at ROCCO

Personalized and responsive business-to-customer interactions are every company’s dream in the competitive western market and we see Facebook pushing WhatsApp in the same direction with the brand new WhatsApp Business Android-only app; but it’s far from perfect or exciting when compared to what WeChat has accomplished and it comes up surprisingly rarely in conversations.

WeChat appeared as a WhatsApp protégé in the East, even the colours and chat screen matched — white and green, simple and clean. Years have transpired since Tencent  scrapped the popular messaging app QQ and its desktop legacy to start from scratch. The web giant dominates China’s consumer Internet and solely finds competition in the face of Alibaba, the country’s other big player in the fields of e-commerce, technology, retail and AI. Tencent fully dedicated its attention to the smartphone boom in China — the WeChat app is now used by almost a billion people, shovelling an immense amount of revenues and power. WhatsApp, on the other hand, was acquired by Facebook for $19 billion and is currently used by 1.5 billion people around the world.

Tencent was not after the superficiality of numbers; it concentrated instead on functionality and cross-integration of innumerable amount of services, products and brands, all confined within a single app. You can pay bills, book a flight, purchase a bus/train ticket, order food, buy all kinds of products and services from the official business accounts, you can tip content creators for their work, access banking services, find new people in your vicinity, hail taxis, play games, book doctor appointments…  running out of breath. A true Swiss Army knife designed to cut all other apps out of the picture and avoid the well-known ‘app constellations’… but not really. Instead of creating new, clunky extensions and apps inside its system, WeChat integrates existing services, making its use not only a commodity, but also a necessity.

It might be giving us a pretty good idea as to where WhatsApp is headed.

There are many relevant components contributing to WeChat’s success:

a) Most competitors such as Facebook, WhatsApp, LINE and Twitter are banned in mainland China;

b) Mobile wallets/payments are still not a big thing in the West, while they’re used for almost everything in China;

c) WeChat works closely with the Chinese government to provide additional power and control over the population (despite their strict privacy claims), whereas WhatsApp’s reach is a lot more international, thus making it hard to expel competitors and satisfy regulations of different countries;

d) The good, old tinfoil-hat conspiracy theories — prevalent in western pop culture and news — prevent us from completely trusting ‘big, evil corporations’, while the stringent government restrictions and collectivism mentality of China ease people into using such an omnipotent app;

e) A gigantic portion of the Chinese population has highly capable smartphones and presents a more homogenous group compared to WhatsApp’s large base of international users.

This is why WhatsApp will not and cannot turn into the next WeChat; nor is the expression of WeChat being the “East Asian WhatsApp” accurate. The apps have only the bare minimum in common — the chat.

But this doesn’t mean that WhatsApp Business won’t integrate its own WeChat-ersque features.

What does WhatsApp business allow users to do?

The app is used with a number, like the regular app; small businesses are provided automated messages such as greetings, they can see messaging statistics, set up a profile page with the possibility to include their email and Facebook profiles, they are distinguished as business accounts and will be eventually verified as the platform gains more traction. Business owners can also access the app through the web. 80% of businesses in Brazil and India use WhatsApp for business already, why would they commit to this new app which is Facebook’s attempt to monetize WhatsApp?

It might be free for now but it will change very soon. Facebook CEO Mark Zuckerberg and WhatsApp CEO Jan Koum do not want to include advertising on WhatsApp, but seeing how much Tencent makes from ads alone, it is highly likely that they will reconsider.

The business app is only available on the Google Store in the UK, Indonesia, Italy, Mexico and the US. Facebook plans on expanding and launching an iOS version, as well as including a payment method and release an enterprise version of the app.

Features that WhatsApp Business might take from WeChat:

a) Push notifications: although they are limited depending on the account type on WeChat, they are still very effective and highly customized to include coupons and deals related to the customer’s purchase history.

b) Content creation: businesses on WeChat write informative articles that are further distinguished for their originality with labels and tags.

c) Flash deals: certain businesses would release discounted items on specific days and at a specific time, like 7:30 am on Mondays, for example, to win a bigger mindshare of the customer base.

d) Influencers: many bloggers and celebrities use WeChat to communicate with their fans by sending collective messages early in the morning when the traffic is low and writing sponsored content.

e) Sharing option: maybe posts by WhatsApp businesses will be included in a little feed similarly to the Facebook News Feed with sharing options to other apps and websites.

f) Apps-within-apps: simulations or limited performance functions of independent apps within the business accounts.

g) Group communities: WeChat supports group chats in which consumers can directly discuss the brand with one another and communicate with the brand representative.

WhatsApp is so widely used everywhere because it’s simple and basic, so if Facebook starts including new features and bloatware, it might have to resort to another ‘Lite’ version. What do you think?

WeChat announced that it will start issuing virtual ID cards, marking its transcendence beyond media, and they might one day replace the physical, state-issued IDs. The news raise concerns of identity theft, especially since citizens have to present their IDs for trivial things such as accessing the Wi-Fi network of an internet café, leaving possibilities for future rogue AP (copy-cat network) operations. A multi-layer identity authentication would be required to prevent identity abuse when phones are stolen or lost, among a myriad other preventions to truly ensure an impenetrable protection.

Telecoms in the west and in Asia are far from happy with WeChat’s and WhatsApp’s growing influence, and continue to undermine their reputation as fully equipped tech companies with terms such as OTTs, but they have long wasted the opportunity to compete with the new age of data calls, despite RCS revival attempts. So what now?

While shaking hands with your archnemesis might seem ludicrous, mobile operators and tech giants fit like puzzle pieces, compensating each other’s disadvantages. OTTs are flexible, innovative and always prepared for the next challenge, whereas MNOs are risk-averse and some are considered sleepy – what worked in the past to establish their dominion will not work any longer. It is time to think of the big picture now that the defensive reactions proved fruitless: the Joyn initiative has mummified and nobody even knows about Telefonica’s TU Me and Orange’s Libon, adding to a list of failed OTT duplicates and financial waste. Users love their apps and there’s already a huge advantage to be gained: loyalty and trust. MNOs can provide a more value-enriched service and thus boosting messaging, voice and data by allowing OTTs to integrate mixed telco features. IP based services fail in regions with insufficient connectivity and a SMS backup connection could enhance the user experience. Requesting the aid of third parties familiar with both business models could simplify the partnership process while maximising the experience. An increasing number of enterprises use the SMS-based two-factor authentication as well; it seems that MNOs can significantly strengthen the protection which would resolve rising privacy issues.

There are possibilities to monetise the use of messaging and data services in the future – only if the MNOs stop lying to themselves. There is no beating the “OTTs”, there is no “them or us”.

Messaging is the focus of ROCCO’s Messaging Strategy Report 2018 which is just now in the hands of our analysis team and due for publication next week. Look to our website for more information on its publication. The scope is not Chat Apps per se but rather more where messaging is going beyond A2P SMS. There are contradictory opinions which is always interesting.