The multitude of messaging announcements this week has raised some interesting questions about the future of social networks in China in general and the fate of WeChat in particular. The WeChat team—and Tencent as a whole—should be worried about Bytedance products taking more and more user attention, but Bytedance’s platform play just isn’t enough to topple the reigning champion.
To say that WeChat is the Chinese internet is certainly an exaggeration, but it’s still pretty darn close. But the Chinese internet is hungry, perhaps even starving, for something new. In the era of rapid heating and cooling consumer tech cycles, China’s young mobile users expect their experience to constantly improve and seek out new forms of “play” that hold their attention.
WeChat has changed dramatically since it was first released in 2011. From simple messaging formats like Kik and WhatsApp at the beginning, to voice and video messages, short videos (aka WeChat’s Sights), QR codes, a Facebook-like feed Moments, to mini programs and now the WeChat version of Stories and UI overhaul in 7.0, which launched two days before Christmas.
While the overall change seems dramatic in hindsight, the development cycles are glacial with major updates coming with more than one year between them—6.0 was released in 2014. WeChat is a mature product with more than 1 billion users. It’s not surprising that the youthful appeal of new arrivals such as Douyin and Bullet Messenger is strong.
WeChat may be reliable, but it’s also ordinary. Douyin, on the other hand, is flashy and seductive. Started in September 2016, the app known as TikTok internationally allows users to record, view, and share short videos. It has already reached 250 million daily active users (DAU) and is playing in the rapidly growing short-video market. WeChat only grew 11% in 2017.
With the launch of its Stories-like Time Capsule in version 7.0, WeChat is certainly trying to carve out its piece of the short-video market, too. But its 24-hour lifespan videos won’t be enough to make a dent.
Duoshan at the door
Enter Duoshan, the messaging app from Bytedance released in Beijing on Jan. 15. Its name translates as “many sparkles” or “very shiny.” It’s perhaps the only product Bytedance has gone out its way to announce. From all accounts it is very close to Snapchat. I have yet to try it as it’s still in testing on iOS. However, members of the TechNode team tell me that it’s very similar to Douyin and that it feels like a video-based messenger app crossed with Vine.
First impressions of DuoShan: Yet another Snapchat clone. Built on the pretty much nonexistent TikTok social graph, with no iOS version. You can imagine the sighs of relief at Tencent head office. pic.twitter.com/ocpIy4qdha
— Matthew Brennan (@mbrennanchina) January 15, 2019
Leveraging brand strength in short video, Duoshan is a messaging app that allows users to upload short videos that disappear in 72 hours, as well as stickers, and text to chats.
Chen Lin, chief executive of Bytedance-owned Jinri Toutiao, said that Duoshan is only for “… intimate communications, letting people with close relationships communicate with each other without any pressure,” a clear dig at the tendency for WeChat users to mix their personal and professional contacts.
The problem for Douyin is that it’s never been a social network. Sure, you can leave comments and interact with the content creator or other commenters, but that’s a social network of weak ties and less valuable users. Much more valuable is a platform that combines social networking and connects to the offline world, in other words, WeChat.
Bytedance has had its eyes on WeChat for some time. Toutiao launched its mini programs last September, Douyin followed suit in October, and Duoshan already has a wallet feature out of the box. While statements from Bytedance executives play down the competition to WeChat, it’s clear that Duoshan is Bytedance’s platform play.
Bytedance’s core strength is the application of artificial intelligence. AI is great for understanding and recommending content, but doesn’t seem relevant at all in the context of a messaging platform. On top of that it has no track record for social networks, unlike Tencent whose entire business was built understanding how users want to interact and then providing services on top of that.
Tencent should tremble
Bytedance isn’t the only major company to have gone up against WeChat. Alibaba tried and failed once with Laiwang and decided to pivot into enterprise chat with their DingTalk instead of taking on WeChat head on. Smartisan is backing a messaging developer and infamous QVOD founder has launched Matong, an anonymous messaging platform. While none of these has a chance to topple WeChat, Tencent should be worried about these new apps, and not because they compete with WeChat.
QQ, WeChat’s older sibling, is China’s Number 2 social network after WeChat. While its user numbers have declined, QQ has been doing its best to stay relevant, in particular by appealing to a younger demographic. In November, it announced it would be adding in more content channels, including e-sports, live streaming, gaming, and beauty, as well as QQ Lite Games, casual games existing only in QQ. And QQ is where Tencent monetizes its network. Users are incentivized to purchase a wide variety of virtual goods, from gifts to decorations for their profile page. Duoshan is a direct threat to this.
Both Douyin and QQ have a similar demographic profile: under-30s who live in China’s smaller cities and towns. Duoshan most likely will appeal to a similar user base as well. While Douyin was a tangential threat in the sense that it siphoned user time away from other products, Duoshan has the potential to steal much of the QQ user base. While QQ has tried to stay with the times, the UI is still not that modern whereas Bytedance has absolutely killed it when it comes to the design of Douyin and Duoshan.
While Duoshan may not be the platform play Bytedance wants it to be, it will certainly be giving QQ a run for its money. Maybe this threat will force Tencent to rethink its social strategy even as it pivots into the enterprise—with Bytedance hot on its heels in that market too with Lark, its enterprise messaging app.
Tencent has been dominant for too long in this space. I’m glad to see some competition.