Will Wechat Contacts Grab Chinese Mobile Operators’ Market?

Written by Joey Wang

2014, Nov 11^th, nearly everyone was focusing on 
Single’s day online shopping, while Tecent launched a new product called Wechat Contacts, enables users make phone calls with their friends of Wechat FREELY, which seems may give Chinese mobile operators another hit. Flashing back, the figure of short message users dropped dramatically because of the popularity of Wechat, which triggered complaints and panics of mobile operators several months ago. Today, Wechat Contacts comes to challenge mobile operators again. Thus here comes a question: will Wechat Contacts grab or even shake mobile operators market in terms of calling service?

For mobile operators, on the one hand, the bargaining power of users gets increasingly stronger as they have substitutes such as communicating through Wechat so they are gradually hard to be pleased and satisfied. On the other hand, the appearance of new threat Wechat Contacts with its FREE service and similar call quality does burden their situation. For the mentioned reasons, Chinese mobile operators should loose considerable numbers of users theoretically. However, user adoption towards new product or service depends on multiple elements because the long-term generated user habit of calling can be difficult to change. That is to say, there are still limitations existing of Wechat Contacts that cannot easily shake mobile operators’ market position from my perspective.

In spite of its call quality, is the Free service really free? Actually, this so-called free calling is nothing but a strategy to attract users. Because users still have to use it by consuming network traffic, which has the similar price with normal communication by phone or even more expensive, even when using Wechat Contacts in Wi-Fi environment, users also have to pay for Wi-Fi. On the other hand, actually, before Wechat Contacts, they are already several apps with similar functions produced to serve users but failed to generate a large user scale, shows that the free calling service is less popular than expected. Since Wechat Contacts is not a real free service, what on earth is its core competitiveness and unique differenriation to catch users’ eyeballs? As one of the users, I cannot find anything special from its current app version, which also proves that the importance of user experience towards the promotion and popularization of a new product/service.

Apart from the product itself, its penetration can also become a challenge. According to recent research, there is increasing number of young generation users who are also the main force of smartphones preferring texting to calling as texting is asynchronous (non-blocking), low bandwidth (full attention not needed; answer when ready) and convenient in almost any situation. Admittedly, such a status does bring an obstacle to the penetration of Wechat Contacts, as calling is no longer the first choice among considerable users when communication happens. In addition, it is believed that early adopters play significant roles in the promotion of a new product. And Wechat Contacts is based on Wechat, whose users mainly gather in higher tier cities. That is to say, even there are numbers of early adopters willing to use Wechat Contacts, its penetration towards lower tier cities could be limiting. Therefore, Wechat Contacts is not competitive enough to conquer with the mobile operators, not to mention grabbing their market.

However, does it mean that Wechat Contacts will not threaten the market of mobile operators? Since it is a newly developed product with much potential to be exploited, maybe an integration of some O2O services or Yellow Pages navigation can enhance its competitive force towards mobile operators. As users are always the center of the products and services, only better user experience can help grab more market share in market competition.

Can E-commercialization of Paper Media Be Successful?

Written by Joey Wang

Facing the challenges from the expanding new media, traditional media especially the paper media are looking for a breakthrough to isolate its current bottlenecks. Being digital is no longer an innovative way for the survival of paper media as such a simple transition is still not efficient enough to catch eyeballs. Then here comes a new strategy called e-commercialization of paper media, which has already been conducted among several influential newspapers such as Beijing News, Guangzhou Daily and Shanghai Morning Post, etc. in China supported by Taobao early this year, aiming to save paper media’s downturn. So, how does it work and will such an e-commercialization be successful?  It is worth thinking and even doubting.

Find something mentioned in the newspapers interesting but have no idea about where to buy, most of people will choose to search online，which means the attention will be distracted or shifted immediately as the newspapers fail to fulfill readers’ demands. Therefore, once turned readers directly into consumers through a way，newspapers could get benefit theoretically.

Print the QR code of Tmall’s selling information on the newspapers and once a scanning behavior carried out by readers that Taobao would pay newspapers money, which is so called the e-commercialization of paper media. On the surface, it seems that the long-term built credibility and influence of newspapers and their brand effects could help guarantee the quality of the recommended products and earn the readers’ trusts. On the other hand, the low-cost printing QR code will help enrich the content of newspapers and improve the service function of newspapers. However, as the recession of paper media is an indisputable fact, it is inevitable to consider its limitations towards its process of e-commercialization and the potential negative effects therein.

First，the e-commercialization of paper media may lead to a reduction of the newspapers’ credibility as it will make the content of newspapers become more market-driven and profit-driven instead of being independent. For example, when newspapers would like to attract readers to scan the QR code, there must be related contents matching, which means the newspapers may be full of soft advertisements instead of the real valuable information. In other words, such an e-commercialization may affect the essence of newspapers from being information dissemination channels into a tool or springboard to serve the e-commercial websites. Besides, with the development of new media, the number of paper media readers shows a downward trend. The original readers are growing elder while the younger generations are reluctant to read newspapers anymore as they have better substitutes. Thus, when the majority readers of newspapers are the elders who have no awareness or needs of shopping online, let alone scan the QR code using a smartphone, then it will be more difficult or even useless to conduct an e-commercialization. On the other hand, precise advertising reach can also become a problem as different readers have separate needs that cannot be satisfied by only a few QR codes, which means that the recommended products may not cater to readers’ interest and even results in waste of resources.

Overall, although potential risks of the e-commercialization of paper media exist, such an attempt is worth encouraging. As at least it proves that the traditional media never give up the hope of surviving and still look for more breakthroughs, while being e-commercialized is just one way of them and may its development has more clear positions or directions and more room for the growth.

Will Apple Pay Threaten The Status of AliPay in China?

Written by Joey Wang

According to recent news, Tim Cook showed his interest of cooperating with Jack Ma and his AliPay, saying that he is going to discuss a marriage between the two and find some areas of common space, which gained much attention. We still remember clearly Cook showed how Apple Pay matters on the October’s Apple launch and feel impressed with its super convenience and safety for payment. Therefore, here comes the problem: there is no doubt that Apple Pay is a powerful competitor to AliPay who accounts for the 70% of China’s online transactions. What if it is inviting the wolves into their own home for AliPay once the cooperation is conducted? Will Apple Pay threaten the status of AliPay in China? Obviously the answer is YES, from my perspective. Although for many consumers in China, they have already developed a habit of paying via AliPay, which has become an indispensable part of their daily life. It seems that Apple Pay could make a change.

Let us review the steps how to consume via AliPay first：open the App, unlock with your gesture, get a QR code and scanned by cashiers. It is a simple operation that you get to used it very much, however, what if payment could become simpler? Would you like to give it a shot? Absolutely Apple Pay works quicker, when you make a purchase, just wave your devices in front of the stores’ reader, use the touch ID of your fingerprint, and then watch your money disappear. As the purchasing power of Chinese consumers keep rising, it is undeniable that such convenience of Apple Pay could further stimulate consumption, and consumers may heavily rely on it in the future.

Though AliPay has owned 3 hundred million users in China, which is hard to be exceeded in terms of online consumption. However, as a influential manufacturer, Apple recently has also announced that will bring Apple University in order to seek its business position in China for the long-term, which showed its great attention towards China market. And based on large numbers of Apple fans in China, it is believed that Apple’s innovative payment concept will get attractive and popular so that the new customers are more willing to choose Apple products, and mature customers are more loyal because of its newly updated services with great convenience, which means that consumers who used to consume via Alipay installed in iPhone may turn to use Apple Pay directly. After all, time is money.

However, it is also a challenge for Apple Pay to push in China, as the openness of NFC is quite low and it could take a long time and huge cost to build awareness among users. On the other hand, the relevant policies from Chinese government may also set up some obstacles for Apple Pay. If there is no cooperation between AliPay and Apple Pay, at least it gives Jack Ma enough time to response for the coming threat. And once all the barriers broken, no matter whether Apple Pay and AliPay will collaborate or not, it is inevitable to have a drastic competition between the two at last. Then how will Apple Pay attack and how will AliPay defense? Who will win the market? Let’s wait and see.