Don’t Talk, Chat – Bloomberg
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Think about the last time you made a call from your mobile phone to the mobile of someone you know well. Now consider how many times in the past week you actually communicated with that person.
In Singapore, there’s a 58 percent chance that you used an app to send a note, emoji, sticker, smiley or pic. If you’re in the United Arab Emirates, that jumps to 71 percent, according to data compiled by the ad agency We Are Social. In the U.S., the likelihood drops to 34 percent (even Canada is ahead, at 37 percent.)
In the chicken-and-egg cycle common with technology adoption, the advent of chat apps has given rise to strong usage, spurring the development of new chat apps. Now there are more than a dozen of them globally, led by Facebook’s WhatsApp and Tencent’s QQ and WeChat.
While chat-app growth data are hard to track, We Are Social says mobile social media — of which chat is a subset — grew 17 percent last year. With mobile social penetration at just 27 percent globally, compared with 51 percent of the world’s population using a mobile phone, there’s plenty of growth ahead. At this pace, it won’t be long before phone calls become old-school, relegated to the dusty dungeons of telemarketers and sales traders.
In Vietnam, you’re probably using Zalo, and quite unlikely to prefer WhatsApp. In Indonesia, Blackberry Messenger remains the local favorite, years after the parent company’s heyday, while Russians still like Skype more than competitors. Telegram reportedly is popular in Iran.
If it seems that this heterogeneity is an invitation to jump on the chat-app bandwagon: don’t. Outliers like Zalo and South Korea’s KakaoTalk are the exception. While localization may work for social media sites like VK (big in Russia, but few other markets),chat is more like the telephone of a century ago, where transcontinental and transpacific connections were crucial to adoption. Social is more akin to the local pub of yore.
The truth is, most of these chat apps will fail for two reasons. One is the business model. Few will attract generous patriarchs like Telegram’s Pavel Durov, or buyout offers from cashed-up behemoths like Facebook, which paid $19 billion for WhatsApp in 2014 . That means they’ll need to fend for themselves, as Line and Viber are doing through stickers and commercial branding channels, or WeChat and a few others with e-commerce, gaming and payments.
Both models require scale, however. Developing a marketing campaign takes the kind of time and money that really only works when a platform can deliver hundreds of millions of users with identifiable demographics. That’s why advertisers love Facebook and WeChat, and are keen to watch the evolution of WhatsApp.
Line is among those that recognize this challenge and is going global by tweaking the offering to local tastes — marketers call it glocalization. In Indonesia, it’s tapping into the power of alumni networks, and it’s added Ramadan-related features for Muslim countries, Bloomberg’s Yoolim Lee and Pavel Alpeyev report.
Not every chat app will pull off this trick, which might lead them to the graveyard of walled gardens. While long wires strung across the world made the telephone global, it was the technology’s general compatibility that ensured it took off. So too for mobile telephony and e-mail a century later. Hotmail, Yahoo and Gmail all persist because they work with each other, and cellphone usage only took off after devices could connect across global networks.
Among chat apps, though, even Facebook Messenger and WhatsApp, which belong to the same stable, aren’t cross-compatible. Local heroes like KakaoTalk and Zalo may have respectable shares of some markets, but WhatsApp, WeChat and Line offer similar services on a global scale, so convenience eventually will trump nationalism. When that happens, it will be time for more than two-thirds of the world’s chat apps to log out, permanently.
Despite Zalo having strong local share, 73 percent of Vietnam’s online advertising goes to foreign players, Tech In Asia reports.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
To contact the author of this story:
Tim Culpan in Taipei at firstname.lastname@example.org
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Don’t Talk, Chat – Bloomberg