WeChat rides the IM wave

WeChat in India is being modified locally and marketed by Indian internet company Ibibo. Tencent invested in Ibibo in 2008 and with WeChat emerging as key part of global agenda of the Chinese company, Ibibo team in India has been working on WeChat mostly since 2012. The company is expecting to grow at 100% as the instant messaging market has grown at a similar pace in India during 2013.

“Tencent has done this in the instant messaging era in China and we have the right DNA and insights to back our growth. Getting people to pay for some value addition and let the gaming come at the right time of the critical mass of internet audience. This ecosystem is not built by advertising, but by users. We understand that it is a long game and India is a market of diversities. We are not in a hurry to say that we have reached a milestone as the milestone itself is growing so fast,” says Rahul Razdan, president of Tencent India.

Razdan is unfazed by competition and the emergence of other free messaging apps and says that an ecosystem of such magnitude cannot be replicated. “Ecosystems cannot be replicated overnight. Apps may become the flavour of the month,” he says. The Chinese company is competing globally against others like Snapchat, Japanese player Line, India’s Bharti Group’s Hike, BlackBerry messenger called BBM and Facebook’s Messenger among others.

WeChat, which originated as Weixin in China, being envisaged only for mobile and not being a legacy product coming from web or browser itself sets it apart, he says. According to Razdan innovations like voice messaging, video calls and shaking the phones to identify friends’ phones or through QR codes are among the many innovations that sets the platform distinct, he says.

The company’s innovation streak has been noticed with the Chinese tech giant being one of the only three tech companies to make the cut in four top tech innovator lists from Forbes, Boston Consulting Group, MIT Technology Review and Fast Company. Razdan says that innovation stems from the fact that company always listen to the users to understand the user problems apart from doing lot of research and surveys among its users.

Globally while internet companies have advertising as the most successful business model, Tencent has done it through providing value added services, like club memberships, avatars, community memberships, and dating services collecting micro payments. Tencent derives 80% of its more than $7 billion in revenue from sales of these services.

Despite its acceptance and growth in India, Razdan still feels that there is a long way of growth in India before even thinking of monetisation from the platform. He feels that the first step will be the selling of stickers with the next stage being games. “Lot of these games could be free to play but there would be items inside the games that will have to be bought. Since all this is happening with the social graph that already exists as part of your friend group as part of the WeChat, the level of engagement happening will be more,” he adds.

According to Razdan, it is easier for a game developer to get his game discovered on a social platform like WeChat rather than on the appstore where a million apps are present. Though he admits that once tens and hundreds of games come on the platform, it might be a challenge. “Social will solve some of the problems of discovery due to the viral and friend circle present, if not all of them,” says Razdan.

The Chinese tech major is expecting the brands and businesses to form the apex part of the monetisation pyramid. Brands can start what is called an official account with permission from WeChat. The official accounts are unlike a user account and get many privileges and users follow them, but converse as with a friend. For instance the multiplex chain PVR already has an official account and pass on some discounts to WeChat users. “Now we have a line of brands wanting to open an official account, but we have not opened up it yet. We are not yet thinking of making those paid yet as there is a value being created for the users and are focussing on creating an ecosystem,” Razdan says.

Despite growing at a fast pace, the company is still not looking into regional languages as the intuitiveness of apps and smartphones cannot be easily replicated easily in Indian languages now. It feels that most of the localisation needs are taken care of by stickers, smileys, video calls and voice messages. “The voice message leapfrogs the need of having a keyboard in a different language and anyway it is a problem for a smartphone makers to solve. And if we continue to grow the way we are doing right now, we will reach the segments of population where literacy has not reached, voice messaging works,” says Razdan.