Sat, Jul 23, 2016 - Page 11 News List

Late contender WeChat faces uphill battle in Africa

Reuters, JOHANNESBURG

Late to the party, WeChat (微信), China’s biggest Internet-based mobile messaging platform, is scrambling to get a piece of the action in the booming African market.

The move is leading South African-Chinese joint venture WeChat Africa down a fiercely competitive path, as Facebook Inc’s WhatsApp is already part of the social media fabric in most African countries.

Africa is not often the scene of battles between tech giants, but the outcome could help determine who can turn the exponential growth in online messaging services into profits.

WeChat stands at a major disadvantage, as WhatsApp is used far more widely, making users naturally reluctant to choose a rival service.

However, WeChat is betting an array of services that include money transfers, prepaid electricity and airtime purchases and its experience in selling products to lower-income users in the villages of China might loosen the Silicon Valley grip.

“That’s at the heart of the story for us, because we knew that we were late to the market compared with other instant messaging apps and so we realized that focusing on chat services was not the most practical way to get to market,” WeChat Africa head Brett Loubser said.

Launched in Africa in 2013 by China’s Internet giant Tencent Holdings Ltd (騰訊) and 34 percent shareholder South African e-commerce and media group Naspers Ltd, WeChat Africa is a rare south-south corporate partnership to expand on the continent.

The joint venture is facing an uphill battle in taking on WhatsApp, which offers free text, picture and video messages and whose adoption in big African markets, such as South Africa, was lightning-fast, because texts over a telephone network are still expensive.

A study by World Wide Worx, a Johannesburg-based consultancy, showed WhatsApp had more than 10 million users in South Africa last year, compared with more than 5 million for WeChat.

However, WhatsApp has no immediate plans to make money out of the service in Africa, Facebook Africa head Nunu Ntshingila said.

“At this point in time, we are not at the stage where we are looking at monetizing WhatsApp,” Ntshingila said.

“That’s in a three-year time frame, because right now the focus is on two big apps, which are Facebook and Messenger,” she said.

Ntshingila said WhatsApp is the No. 1 messaging platform in South Africa, Nigeria and Kenya.

Although there are no reliable statistics on the number of mobile phone owners who use either WhatsApp or WeChat on the rest of the continent, there are parts of Africa where WeChat is almost unknown, whereas WhatsApp is everywhere from Namibia to Niger.

“I used to have a WeChat account, but I deleted it, because you will find virtually nobody to chat. With WhatsApp, there are no complications, it’s simple and all my friends use it,” said Nkululeko Mabuza, a 24-year-old social worker in Tzaneen, a large town 400km north of Johannesburg.

Loubser said WeChat is all about making it easier for users, with a suite of features to order takeout, shop online, search for jobs and transfer money without having to leave the interface.

“We looked very carefully at what the platform can achieve beyond just messaging, because people use products when there’s value for them,” he said.

Late last year, WeChat launched mobile money services, or WeChat Wallet, which allows users to store bank cards and withdraw cash at the automated teller machines of a partner, Standard Bank of South Africa Ltd.

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