Abu Dhabi, UAETuesday 21 May 2019

WeChat chief unveils new vision for China's online giant

As users' behaviour changes, Allen Zhang has plans afoot for the next act for China’s premier super-app

Tencent's WeChat internet giant is set for an overhaul. AFP
Tencent's WeChat internet giant is set for an overhaul. AFP

Allen Zhang stepped on stage to wrap up a long day of presentations at a Tencent conference - four hours later, the WeChat founder had methodically torn apart his own brainchild before mapping out the next act for China’s premier super-app.

Mr Zhang, who commands a cult-like following in China thanks to WeChat’s explosive popularity, got an audience of thousands glued to their seats until nearly midnight last week. The usually reclusive executive, in a company known for low-key leaders, laid out a vision for how the platform used by a billion people should evolve: by emulating real life and social circles.

His creation - a mash-up of WhatsApp, Instagram, Facebook, Yelp, Paypal, Twitter and Kindle - has become intertwined with the daily lives of just about every Chinese person.

And it is hugely successful financially. Despite the fact that the world's largest social media site Facebook had more than twice the number of active users at the start of last year, revenue for WeChat's owner Tencent was not far off parity. In addition, the Chinese firm's first-quarter net profit for 2018 was only around 20 per cent lower than the US behemoth's at $3.8 billion, according to Statista.

Yet Mr Zhang confessed WeChat, known as Weixin on mainland China, risks becoming obsolete. It’s lost the veneer of authentic discovery that endeared it to users, because people were becoming too sensitive to their online personas on Moments (a feed akin to Facebook’s.)

The 49-year-old’s first step is deceptively simple: a video-streaming feature, not unlike Instagram’s feed, so people share their lives in real time, not through carefully curated photos and messages.

“WeChat will need to face new challenges in the next eight years,” Mr Zhang said “Moments has become a very traditional place for social networking, as people use it to showcase the best of themselves to win recognition from others.”

Introduced in December, the video-streaming button - a camera icon on the top right corner of the user profile page - allows people to add emojis, text and music. Mr Zhang sees it as the antithesis of Moments: even the “send” button is swapped with a nonchalant “this will do” to dampen anxiety.

“What we want is something that can let people record what they’re really experiencing, and let their friends see,” he said. “This process should not be like Moments. If it were, we wouldn’t be doing this.”

While Moments has grown users continuously for seven years and each day more than 45 billion messages are sent, Mr Zhang is looking ahead. Many are starting to re-think how they showcase their personal photo and article-sharing history to new contacts as their phone book expands. To counteract that anxiety, WeChat introduced a setting to let people display posts for just three days, a function now employed by more than 100 million.

“Allen really spent a lot of time trying to explain the philosophy behind the WeChat product during that four-hour speech,” said John Choi, an analyst with Daiwa Securities in Hong Kong. “It’s clear that they need to further enhance user engagement, as user growth is not going to be the key growth driver in the future.”

While WeChat has been the star of China’s internet for years, newcomers like Bytedance are now making things harder. The owner of Toutiao, Douyin and Tik Tok has become the world’s most valuable start-up, according to Bloomberg, which in October last year said Bytedance closed $3 billion (Dh11bn) of funding from SoftBank Group and other major investors at a valuation of $75bn.

“The much-reported cannibalisation of screen time from Bytedance’s apps are obviously hurting WeChat, and with little wonder,” said Mark Tanner, founder of Shanghai-based research and marketing company China Skinny. “WeChat needs to stay relevant for those hundreds of millions of users who just want something simple to use, that looks good and is entertaining and are used to newer, shinier things being launched.”

A red flag for the app is that readership for articles referred by friends on Moments has been dropping. Mr Zhang conceded that WeChat’s algorithm-based referral feature is sub-par. So he introduced “Hao Kan” (or good-looking), letting users mark articles they’ve read as an alternative way to spread the word among friends.

“The way we mostly gather new information is not from the library or actively searching from the web but from people around us,” said Mr Zhang. “In order to create a product that attracts the masses to read, it needs to be based on social recommendation, only then will this have a chance.”

As in real life, people also don’t hang out in one locale. Hence, Mr Zhang envisions a plethora of satellite apps - similar to the digital book service already in use - which share functions and links to the main app but can stand alone.

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“WeChat as an app has already featured many, many things,” he said. “But there’s a limit to how much it can hold.”

Complementing those initiatives will be a build-out of Mini Programs - the lite-apps platform that already sits atop WeChat’s interface and provides quick access to services including restaurants and cinema bookings.

WeChat plans a recommendation system based on friends’ reviews, to help people discover products. Mr Zhang hopes users in future can search within its ecosystem. For example, when a person looks up a flight, it directs them to an airline’s lite-app.

“We have the patience to nurture it slowly,” said Mr Zhang.

To assure third-party developers, he insists WeChat won’t play favourites or direct traffic to Tencent’s portfolio companies, while acknowledging the company hasn’t operated as fairly as it could have in the past. That stance has been a point of contention within Tencent, with staff from other divisions often complaining about how WeChat is run like a dictatorship. Mr Zhang said if he didn’t rule the roost, the product would lose its soul.

“I’ve always regarded myself as a product manager and not a professional manager,” he said. “A good product needs a dictator, otherwise if too many opinions are involved, the product will fall apart.”

In regards to dictators, many may see a parallel in Beijing's presence online. In September, The National reported on the Social Credit system that’s being rolled out in China. A hybrid of credit ratings, behaviour analysis and state blacklists, it was announced by the Chinese Ministry of Public Security in 2015 as a way of assigning every Chinese citizen a score based on their “sincerity”, and to reward high achievers. It’s set to become fully operational in the next two years. “Its objective,” read the Ministry’s announcement, “is to raise the honest mentality and credit levels of the entire society”.

The Chinese Supreme Court’s 2013 decision to make public the names of defaulting debtors was perhaps the first seed of the Social Credit system. It’s been reported that 8.7 million flights and 3.4 million train journeys were denied to blacklisted citizens up until the end of 2017. But the integration of smartphones into society, and the widespread use of payment apps such as Alipay and WeChat Pay, has resulted in a colossal amount of behavioural data that can be fed into a calculation of “sincerity”.

The progression from these trial schemes into a fully-fledged Social Credit score relies on data sharing and co-operation between technology firms and the government. “Chinese tech companies operate because the Chinese Communist Party allows them to,” according to Dr Samantha Hoffman, non-resident Fellow at the Australian Strategic Policy Institute. “It does not matter if a company, or the individual leadership of a company is indifferent toward the Party – they are still legally responsible to the Party.”

It remains to be seen whether Mr Zhang’s most recent vision will prevail. WeChat has kept its dominance in a sea of rival Chinese apps in part because it maintained a clean interface and hasn’t bombarded users with ads and alerts.

Take Mr Zhang’s insistence on never changing WeChat’s welcome screen, which shows a silhouette of a lone person looking up at a vast depiction of planet Earth.

“Every time you see the loading page of WeChat, you’ll think ‘what is this person doing? What is he doing in front of planet Earth?” he said.

“One billion users will have one billion interpretations and find something that moves them.”

Updated: January 15, 2019 03:48 PM

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