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Mark Zuckerberg recently published an article that has attracted much attention entitled "A vision of social networking focused on confidentiality." He added that the platform would focus on simple private interactions and merge functions for Facebook., Messenger, Instagram and WhatsApp.
He also wanted to "create more ways for people to interact, including calls, video chats, groups, stories, businesses, payments, commerce," and so on. He also recently commented on an article suggesting that Facebook should try to learn from WeChat, admitting, "If only I listened to your advice four years ago."
Many conclude that Facebook wants to emulate WeChat and that its ultimate goal is to become a similar super application.
I think they are right. But is it feasible?
There are many inventions that have revolutionized culture and society. The phone. Television. L & # 39; s internet. Personal computer. Smartphones. Applications.
At present, WeChat is paving the way for the next phase: the digital ecosystem. That's what Facebook wants to copy.
To represent Zuckerberg's vision, we must understand his inspiration and precedent, WeChat. In China, his name is Weixin, and overall he has more than one billion active users. He dominates the world of Chinese social media.
The version of the application used in China offers a wide range of features that do not exist in the international version. You can order food, send and receive money, shop, pay utility bills and check-in for flights. It's really ubiquitous and in some provinces in China, people can even ask for divorce via WeChat.
WeChat offers a ton of features, but most of its features typically fall into the following categories:
1) Social media
It contains private messages, groups, "Moments" (similar to the Facebook wall) and "People nearby" that help you find and meet people.
2) News, weather, gossip entertainment, marketing, advertising and content blogger / influencer / KOL
Users can read articles, stay abad of news, or follow groups, bloggers and celebrities. There are also public accounts where brands can communicate with their customers and their fans.
3) E-commerce, payments and scheduling
Purchases can be made at WeChat's online stores as well as at offline stores. You can order meals, buy movie tickets, transfer money and pay utility bills. You can even pay street artists, peddlers or street vendors with the app.
Tencent, the company owning WeChat, is badociated with JD.com, one of the leading e-commerce platforms in China, which covers online and offline markets, logistics, data bulky, etc. It is also launched WeChat Intelligent Healthcare (WeChat Smart Healthcare) (信 智慧) which allows users to make an appointment to the doctor, make payments, and so on. via WeChat public accounts. In 2017, there were more than 38,000 medical facilities in China with WeChat accounts with many online consultations and about a third accepting WeChat payments.
4) Mini programs
The mini-programs, introduced in 2017, are like applications within the application that provide advanced features and services such as Games, online stores, shared bike access, admission to offline events, customer relationship management systems, discounts, etc.
For example, at Walmart, there is no need to queue at the cash register. You can simply open a WeChat mini program, scan barcodes and then pay with WeChat. Allan Zhang, known as the "father of WeChat," mentioned at the annual WeChat conference in January 2018 that the next big step for WeChat is to explore offline services.
WeChat offers what Facebook, WhatsApp, Messenger, Amazon, Uber, Venmo, Apple Pay, Deliveroo, Epocrates, KRY, HealthVault and many other apps offer together in the Western world. Tencent's strategic partnerships also make WeChat a member of an expanding empire that surpbades all other existing applications. In comparison, Facebook, WhatsApp and Instagram are limited to messaging, broadcasting and marketing.
Judging by recent business announcements, I think Facebook wants to make two major changes:
1) On the social media side, he wants to strengthen instant messaging functions. Messenger, Instagram and WhatsApp will converge to users able to send messages to all three apps without worrying about whether their friends are using the same.
2) On the e-commerce and payment side, users must now leave Facebook to shop on Amazon or eBay. and pay using external providers. With its own integrated payment and purchase system, Facebook could retain this traffic. This is probably the idea behind adding the "Marketplace" section.
This new business model could result in a system allowing anyone to list products or partner with an ecommerce platform so that users can purchase items within the application.
It could also lead Facebook to develop an offline payment system that can deal with Paypal, Apple Pay, Samsung Pay, Mastercard and Visa.
More than 50% of Tencent's revenue comes from payment commissions, which constitute 44 out of 80 billion RMB, from the third quarter of 2018. Facebook, on the other hand, s press on the advertising up to 98% of its turnover. In the future, Facebook needs its buying functions in the market and in the application to generate a constant flow of capital.
These changes are unlikely to succeed because users use WhatsApp, Instagram, and Facebook in very different ways. It is therefore difficult to combine them. In addition, online payment and e-commerce competitors already have a leg up on Facebook and are unlikely to partner with them. Then there are more and more calls to use antitrust legislation to treat overly dominant players.
Although WeChat is considered by many to be the social media manual, it is not easy to replicate its success. China is a unique environment that provides WeChat and other entities with what the Chinese call "天时, 地利, 人和" – a combination of the right time, the right place and the right people.
WeChat was launched in 2011 on the world's largest e-commerce market with a generation of digital-aware users with easy access to mobile phones ready to be explored. Being a global digital leader is a goal clearly articulated by the Chinese government and is widely supported. Foreign social media applications such as Facebook, WhatsApp and Line are also stuck in China, making it less open to foreign competition and allowing WeChat to grow unhindered.
With the 5G on the horizon, WeChat should continue to add features, making its dominant position unshakeable.
Compared to Tencent, Facebook seems to be in an early stage of development. It also faces a different regulatory regime, which varies from region to region and from country to country, particularly with respect to the regulation of digital payments and privacy laws. .
If this is the direction taken by Facebook, it must thoroughly test its Marketplace in different countries and regions and adapt it to meet the needs of different user groups.
The company must focus on creating an ecosystem rather than on the acquisition of competitors. Every product they develop and every business they acquire must serve one purpose; improve or add new features useful to the Facebook ecosystem. Otherwise, it is a waste of capital and resources.
The mini-programs have become the main feature of WeChat, but there is no equivalent on Facebook. So, if the ambition is to make Facebook the essential social ecosystem of the West, they should start working on their version of mini-programs as soon as possible, otherwise they will never catch up in the era of the 5G.
Facebook has to change. However, the road is long and arduous if it wants to maintain its position and remain relevant in the future.
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Posted on 6 April 2019 – 13:30 UTC
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