Working knowledge: Messaging apps in APAC

This article will explore the messaging market in APAC and the various services offered by each of the platforms. Before diving into the individual apps, however, we need to first understand why messaging apps are the central part of the social landscape in Asia.

The chart below details the state of social worldwide, and illustrates the power of the Asian market. East Asia and Southeast Asia are the No. 1 and No. 2 social markets worldwide, with 1 billion people using social media across both regions. Although social penetration in East Asia is fairly high at 48 percent, Southeast Asia lags Europe and North America, with only 37 percent social penetration. Despite this, Southeast Asia still features the global leaders in social penetration: Taiwan and South Korea, with 77 percent and 76 percent penetration. By comparison, the USA only has 59 percent social penetration.

Source: We Are Social, Digital in 2016.

Despite the lower social penetration, Asia still represents 1 billion social media users. Where are these people spending their time? Let's look at the top apps by country.

There are a few lessons we can take from all of this data. First of all, it’s the utility of messaging.In six of these eight countries, two of the top three social apps are messaging-first platforms. The two countries where that’s not the case feature a regional monopoly: WeChat in China, and KakaoTalk in Korea. This is even more striking when compared to the USA, where the top three social platforms are Facebook (41 percent), Facebook Messenger (26 percent), and Twitter (17 percent). The next closest messaging app is ranked No. 8, Snapchat (11 percent), followed by Skype (9 percent).

The list here enforces Facebook’s global dominance, as Facebook owns social across the region. Every country on this list features a Facebook property, and all but China (where Facebook is blocked) have at least two Facebook properties. In India, the top three social platforms are all Facebook properties.

The only messaging apps that we see frequently here with significant penetration (>20 percent) across multiple countries are Line and Facebook Messenger. Taiwan, not pictured, also has significant Line use. Other than Facebook Messenger and Line, there is some frequent WhatsApp usage, with a sprinkle of Viber and Skype.

Taking a global look at the top messaging apps:

We see here that the four leading messaging apps in Asia, WeChat, Line, WhatsApp, and Facebook Messenger, represent over 2.5 blllion users globally. While WhatsApp and Facebook Messenger are significantly used worldwide, WeChat and Line are primarily-Asia focused.

What this means for brands

Given that most users in the region are on WeChat, Line, Facebook Messenger, or WhatsApp, these are the primary messaging/social channels on which brands should focus their engagement efforts. However, this means something different in the context of each channel.

To begin with, WhatsApp does not enable brand communications—Facebook has recently announced that it will allow business on the platform, but this is still some time away. Further, given the Western/USA base of the company, we can expect this to be restricted to Western deployments, at least to start with.

So that leaves us with WeChat, Line, and Facebook Messenger as the primary messaging engagement channels for users across Asia. Each of these three platforms enables brand communications and value-added services in different ways. The common theme among all of them, however, is that they have positioned themselves as centralized platforms, that users can use to access a variety of services, not just messaging. These platforms are moving the branded app and browser functionality into the messaging app itself, integrating themselves into every aspect of consumers’ daily lives.

WeChat: Industry pioneer

With more than 650 million users, mostly in China, WeChat is the clear leader in social in China. Like all of these messaging apps, WeChat began as a simple messaging app, and from there added a variety of value added services that users can take advantage of.

In doing so, WeChat has pioneered the model of the messaging app as a gateway to all consumer services.

Connie Chan, a Partner at VC-firm Andreessen Horowitz, wrote a great blog post detailing how WeChat sits at the center of how Chinese consumers access services. She emphasized how WeChat’s Payments and Commerce services help it play such an important role.

WeChat offers movie tickets, transportation (air, rail, taxi) and money transfer, among others. And in addition to these utility services, it has made it possible for brands to create accounts on the platform and engage users directly, via ‘Official Accounts.’

These Official Accounts enable brands to offer users a mobile app/browser-like experience for followers. Adding a brand account is like adding a friend—you either search for them or scan their barcode, and they are added to your contacts list.

Now, this interaction reveals a key difference between how consumers in China are comfortable interacting with brands versus those in the USA. For the Chinese, it’s normal to have a business in your Chats list, and to receive messages from it. If you’re not interested, you just ignore.

There's little concern about businesses being intrusive; having businesses in your chats list is a part of life. However, even though businesses appear in the Chats list like a friend, their accounts are anything but simple chat windows.

Let’s first take a look at social-care innovator KLM Airlines’ WeChat account:

When we first access the KLM account, we are greeted by a message giving us several options to quickly access KLM’s services. However, it’s not that simple. The customizeable WeChat keyboard at the bottom of the screen gives us other ways to engage with KLM:

We can also chat directly with a KLM service agent directly in the chat window (as if I was chatting with a friend) to resolve a customer service issue:

All within the KLM WeChat account, I can access the full lifecycle of services from the airline, from flight booking to customer service. For a transportation provider like KLM, these utility services are extremely important, and the WeChat presence is architected to reflect this.

For a sports brand like the NBA, other things are important; news, team standings, merchandise. The NBA WeChat account is built to help followers easily access their preferred information of interest:

Of course, no matter how much you love a business, nobody wants to get inundated by frequent promotions and messages from their favorite store. To guard against spamming and alienating users, WeChat limits how frequently account holders can broadcast unprompted messages to followers to four times per month. However, if a user interacts with a brand account (which can be as simple as accessing the account and clicking on something), then the brand can message the user an unlimited amount of times over the next 48 hours.

But what about businesses, like news media, where the value is frequent, fresh content? To satisfy these businesses and their need for frequent customer interaction, WeChat provides Subscription Accounts. The NBA and KLM account examples above sit in users’ Chats list, and are WeChat Service Accounts. Unlike Service Accounts, Subscription Accounts are not individually included in users’ Chats list; rather, they are all bundled in a “Subscriptions” folder:

These accounts lack a lot of the functionality of the Service Accounts, but are ideal for brands that simply want to distribute content frequently. For example, below we see fresh motivational messages from Lebron James and daily news from the Wall Street Journal:

Unlike Service Accounts, Subscription accounts can send one broadcast message per day; like Service Accounts, the restriction is lifted when a user interacts with the account.

Within these branded accounts, users can access all of the content and services from a business that they need—why would they use the mobile browser or branded app? Though we’ve shown examples from some blue-chip brands, WeChat Official Accounts aren’t only for large multinationals; small laundromats and restaurants in China also have Official Accounts. If you’re a brand in China, big or small, you need to be on WeChat if you want to engage your users.

Line: Not just about the stickers

Line is the leading messaging app in Japan, Taiwan, and Thailand, with 200M+ users worldwide.

Launched in 2011 by NHN Japan, the Japanese arm of Naver (the Korean internet giant), the platform has many similarities to WeChat—users add friends via barcodes, and brands create accounts to interact with users.

When it comes to services, Line’s main difference from WeChat is that it provides key value added services via unbundled apps (50+ apps in the “Line Family”). Apps in the Line Family include Line Shop, for finding the best deals, and Line TV, for watching videos.

Although Line and WeChat both offer accounts for businesses, they take different approaches.

Whereas WeChat Official Accounts are free, Line charges businesses for its Official Accounts. Further, Line has created the Line@ app for smaller businesses to communicate with users. Line@ Accounts are also significantly cheaper than Official Accounts (nominal subscription fee versus tens of thousands of dollars).

Below are images of how users engage with brands on Line. As we can see, just like on WeChat, a user can access the branded Line account to access the latest content/services relating to that particular brand. Brokerage SBI Securities also lets Line users buy stock by texting back and forth with a stock trader:

Brand engagement on Line goes beyond the branded account however. A big part of Line’s rise was fueled by rich, animated stickers depicting Line’s two main mascots, Cony (bunny) and Brown (bear).

Below are a few stickers featuring Cony and Brown and couple of other Line mascots:

Users love these stickers, and Line lets brands create and offer stickers for sale (featuring the Line mascots) via the Line Creators Market. Brands like Disney, Burberry, and UNIQLO sell these stickers, driving brand affinity while increasing revenue.

Media personalities like Paul McCartney, Taylor Swift, and Maroon 5 can also build their brands using Line stickers:

On the back of the stickers’ popularity, Line has become a cultural phenomenon. Line Stores and Line Cafes throughout Southeast Asia offer consumers Line merchandise and food, and Line Games and TV Shows featuring Cony and Brown are popular in the region.

KakaoTalk: The WeChat of Korea

The only WeChat-like dominance we see in the region is from KakaoTalk in South Korea. KakaoTalk has 41 percent penetration in South Korea, while Facebook Messenger, the next closest messaging app, has only 12 percent penetration. As we can see from the data, KakaoTalk isn’t really used anywhere besides Korea.

Like WeChat and Line, users can interact with brands on KakaoTalk using Plus Friend:

Although they are dominant in Korea, that represents ~50 million active users, compared to the 650 million on WeChat and 212 million on Line. For now, KakaoTalk is most relevant for brands where South Korea is a highly strategic market.

Facebook Messenger: Taking a cue from Asia

Facebook has been a key platform for social customer service and engagement for many years, as brand ‘Pages’ have been the center of all customer engagement on Facebook. In 2014, Facebook disabled the Messenger feature in the mobile app, forcing users to download the standalone Messenger app. The unbundling of Messenger was the first step in establishing Messenger as a platform (like WeChat).

Facebook took another big step In March 2015, when it announced Business on Messenger, a set of new functionalities enabling deeper customer engagement and integration into existing enterprise platforms (CRMs, etc.).

The images below show the retailer Everlane engaging with a customer, sending a receipt, shipping update, and processing an additional order.

In addition, Facebook announced a variety of value added services for Messenger, including Facebook M (Virtual Assistant), a partnership with Uber for enabling in-Messenger taxi booking, and developer integrations (Giphy, Dubsmash, etc.) for richer customer communications.

Facebook has acknowledged the Asia influence, calling Messaging the next frontier. Messenger for Business has been rolling out in the West over the last year with selected partners and customers, including Sprint and Hyatt.

Conclusion

The social media landscape in Asia is dominated by messaging apps. WeChat and Line have enforced their dominance by providing access to various consumer services through their platforms. Although Facebook Messenger doesn’t yet do this significantly in the region, it has risen to the top of several markets in Asia on the back of the Facebook Social Network. As Facebook expands Business functionality and value added services globally, it is ideally positioned to rise to the top in Asian markets where there is no dominant platform. Brands that want to engage customers in Asia must understand the unique social media/messaging dynamic and the distinctive capabilities of each platform.

Donovan Rose is business development manager for chat app API at Nexmo