The Future of Mobile Chatting: Commerce

Ease, convenience - and customers. Digital commerce will follow the consumer - and the money. JL

Deepa Seetharaman and Juro Osawa report in the Wall Street Journal:

Messaging apps are ideal hubs for other services because they are simple to use and have large numbers of users who spend a lot of time with them. For growing numbers of smartphone users, messaging apps have become the center of their online activity. Hundreds of millions of users in China tap the service to send money, buy shoes and even book doctors’ appointments.
In 2011, Chinese Internet giant Tencent Holdings Ltd. TCEHY 0.34 % launched a smartphone app so people could send each other free text messages. Five years later, WeChat’s hundreds of millions of users in China tap the service to send money to friends, buy shoes and even book doctors’ appointments.
The evolution shows how for growing numbers of smartphone users, once-simple messaging apps have become the center of their online activity, in some cases eclipsing social-media portals such as Facebook.
The phenomenon is most pronounced in Asia, but advancing in the U.S. and elsewhere. Uber Technologies Inc. said last month​ it would let users hail rides through Facebook Inc.’s Messenger app, a texting service akin to WeChat.  Alphabet Inc. GOOGL -1.36 % ’s Google is developing a new chat app that will tap artificial intelligence. Ephemeral chat app Snapchat Inc. is incorporating news, while startup Slack Technologies Inc. has pioneered the chat platform as the center of workplace communication and collaboration, often displacing email at small and medium-size businesses.
“There is no other technology that is more closely examined and discussed in Silicon Valley than messaging,” says  Jenny Lee, a managing ​partner at GGV Capital.
Analysts say messaging apps are ideal hubs for other services because they are simple to use and have large numbers of users who spend a lot of time with them. Facebook—which apart from Messenger owns WhatsApp, the largest chat-based service in the world with 900 million users—says it is closely studying WeChat and other apps, seeking to create a similar ecosystem. But it won’t be simple for Facebook or others to copy WeChat’s success.

 Today, about 2.5 billion people are registered to use at least one messaging app, according to advisory firm Activate. By 2018, the firm expects that number to be 3.6 billion, 90% of the world’s Internet-enabled population.

In China, it is hard to find a smartphone owner in major cities who doesn’t use WeChat; in professional circles, people often trade WeChat usernames rather than business cards.
WeChat’s rise coincided with the expansion of China’s middle class; for many consumers, the app was their introduction to the Internet. WeChat and other messaging apps initially won users looking to avoid texting costs that are 26 times higher in China than in the U.S., according to Activate. But they quickly branched into other areas. Soon after launching, WeChat added a walkie-talkie-type feature allowing users to send audio messages. It introduced a feature called “Drift Bottle,” where users throw a virtual bottle out to “sea” and connect with the user who picks it up.
In 2013, WeChat included a payment function, part of an effort by parent Tencent to challenge rival Alibaba Group Holding Ltd. BABA -2.64 % ’s Alipay affiliate. Once it could handle payments, WeChat moved to integrate other companies’ services like taxi-hailing and restaurant booking.
“It’s a gateway to many things: to entertainment, to other information,” says Shen Haoyu, chief executive of JD Mall, the shopping site of Chinese e-tailer JD.com Inc. JD -1.18 % Tencent owns a minority stake in JD.com in a deal that also allows WeChat users to shop on JD.com in the chat app.

One of WeChat’s most popular features is a virtual envelope stuffed with cash that users can send to one another—the online version of a Chinese “red envelope” tradition of exchanging money during the Lunar New Year holiday. WeChat introduced the hongbao (red envelope) feature during the 2014 Lunar New Year, but people now use it throughout the year.

China’s WeChat, known as a cross between WhatsApp and Facebook, aims to be part of every aspect of your daily life. WSJ’s Menglin Huang explains how it works. (9/16/2014)

Lin Cui-Lu, a 27-year-old employee at a startup in Shenzhen, recently sent a WeChat hongbao containing 12 yuan ($1.85) to a colleague who brought her lunch from a nearby KFC restaurant. Ms. Lin says she sends several WeChat red envelopes a week and on friends’ birthdays. Ms. Lin says she also uses WeChat to pay for meals, buy movie tickets and hail taxis.
“I use WeChat more often than any other app,” she says.
Messaging apps aren’t as deeply rooted in countries such as the U.S., where texting is cheap. “There’s no great example in the West,” says Ted Livingston, chief executive of Canada’s Kik Messenger Inc., which introduced a texting app in 2009.
Two years later, Kik allowed outsiders to attach their own apps to the service. But users didn’t download the apps and developers lost interest in building them. In August, Tencent invested $50 million in Kik to bolster the service.
Facebook has doubled down on messaging apps. In 2014, it snapped up WhatsApp for $22 billion. Then, it boosted Messenger’s prominence by requiring users to download the app to send Facebook messages on mobile phones.
In March, Facebook unveiled about 40 photo- and video-editing apps tailored for Messenger. Today, more than 700 apps are plugged into Messenger, although only about 70 are featured in the app and visible to users.
David Marcus, a former PayPal executive who runs Messenger, says his team is studying how companies can keep in touch with customers over chat without being intrusive. But many Americans remain unfamiliar with messaging as anything other than a way to chat with friends or family in real time. The social network says e-commerce companies Everlane and Zulily would start using Messenger for customer service.
In early 2016, Dutch airline KLM plans to offer booking confirmations and boarding passes over the app.
Hyatt Hotels Group guests can ask for fresh towels or housekeeping over Messenger. But some curious users test the feature by sending messages that simply read “Hi,” says  Dan Moriarty, Hyatt’s director of digital strategy and activation. Hyatt doesn’t see this behavior on other platforms, including WeChat.