Mobile-messaging competition heats up in Southeast Asia

Although WhatsApp is still the leading free messaging app globally, Asian players continue to gather momentum, with Southeast Asia as an emerging battleground.

Mobile messaging apps such as WeChat, Line and KakaoTalk provide a full suite of services, including instant messaging, group chat, photo or video sharing, audio notes and messages, and location sharing. Some even support live video or voice calling, and even microblogging, in a bid to gain a user base as wide as WhatsApp’s.

“More companies have realised the scale and strategic importance of the mobile messaging platform opportunity,” said Mark Ranson, associate analyst, consumer, Ovum. “Northeast Asian players Line, KakaoTalk, and WeChat are making big pushes into key Southeast Asian markets and will provide strong competition for entrenched services like BlackBerry Messenger, WhatsApp and Viber.”

Last week, China’s Tencent launched a joint venture in Indonesia with a local company, MNC Media, to promote the Chinese internet giant’s WeChat app.

“Asia is a huge potential market for WeChat, given its large smartphone users base,” Tencent told Campaign Asia-Pacific via email. “We will gain further understanding of the overseas markets by leveraging the know-how of our local partners, including JV partners, in order to provide premium user experience to our users and increase our presence in overseas markets.”

South Korea’s KakaoTalk and Line, which is operated by NHN Japan, are also fighting over users in Southeast Asia. The region currently makes up at least two-thirds of Line’s global user base, according to Simeon Cho, general manager of Line's business office for Southeast Asia.

“We’ve seen positive growth across this region in the past year, making it a very key market for Line,” Cho said. “The increasing smartphone, internet and social-network penetration rates, as well as rising ARPU [average revenue per user] numbers are showing us that this region represents a growing market for Line. And the current rate of user base growth signifies a market of users ready to engage with [the service].”

While focusing on key markets such as Thailand, Indonesia, Malaysia and Singapore, he added, Line is looking to localise the app and its offerings to each country and tailor its features to different user segments as it aims to grow its user base across Asia.

“At the outset, mobile messaging apps is (or is going to be) one of the most fiercely fought businesses in the marketplace,” said R. Gowthaman, chief client officer for Asia-Pacific and CEO of South and Southeast Asia at Mindshare. “Technological convergence will make the competitive set wider with even social networking sites getting into the play.”

Facebook announced at the Mobile World Congress in Barcelona last week that it had partnered with 18 carriers in emerging markets, including Thailand, Malaysia, Indonesia and the Philippines, to offer free or discounted access to the Facebook Messenger app through smartphones and feature phones.

Ranson explained that the current strategies messaging players use to grow the user base in an international markets tend to fall into three main categories: forming partnership with a network operator, conventional methods like conducting marketing campaigns with well-known local brands, and using television or print advertising.

Line has partnered with the network operator AIS to help the service scale in Thailand. Both Line and KakaoTalk have partnered with the carrier Telkomsel in Indonesia and advertised via television in Japan. NHN also used Line-branded subway trains to promote the service in Taiwan.

Last April, Tencent announced its strategic investment of a 14 per cent stake in KakaoTalk, which helps the Chinese messenger better understand the Korean social-communications market and explore future potential opportunities, according to the company.

With the growing user base, mobile messaging apps now are not only a chatting tool, but also a platform to facilitate the communication of brands, merchants and celebrities with their customers and fans.

“This kind of marketing channel allows brands to send group messages, exclusive contents and coupons to those users who opt-in to follow the brand's account,” said Ranson.

“I see immense potential for retail, automobile and quick-service restaurants to build their marketing around this,” Gowthaman agreed.

For instance, Starbucks has launched its official WeChat account last year to stay connected with its customers, who follow the brand’s official WeChat account to receive news feeds.

Thai Airways partnered with Line to create a set of branded 'stickers' (the service’s signature in-app emoticons), which are available for download and have managed to hit three million downloads so far, according to Cho.

Line also created a Thai Airways Official Account, a channel that allows the brand to better engage with their user communities on a more personal level.

According to Ovum’s latest global statistics, Line has more than 100 million users, while KakaoTalk has more than 75 million and WeChat more than 300 million.

Apart from the major players, smaller ones such as Viber, Vietnam’s Zalo and Taiwan’s Cubie, are also keen on tackling the market. However, Gowthaman pointed out that having too many players in the market defeats the potential to scale up.

“For a mobile messaging app to be successful, the same app has to be with as many people as possible to aid conversation and engagement," he said. "Ubiquitous existence of this service will increase adoption, as one would expect the same app to be widely available for connecting it, and this is where social-networking sites like Facbook become very powerful.”