(Chinese Version)

In 2011, Ma Huateng looked upon WeChat as the last hope for Tencent to bridge across the sea. Now, as growth reaches bottleneck overseas, globalization somehow failed WeChat again. When old ambition meets new reality, Tencent offers itself as a bitter lesson of globalization for the domestic Internet industry to learn from, though it still remains the definite ruler. 

When it comes to overseas promotion, WeChat is hardly a strategical loser. It has partnered with Facebook and Google, and has also invited sports players Lionel Messi and LeBron James as its spokesmen. For products, progress is also kept as the same pace abroad as is at home, while the WeChat public platform is also brought online. However, WeChat still appears imperfect when compared with Whatapp. So, why does Wechat lose, or to put it worse, why does China’s entire Internet globalization lose?

Chinese way of thinking dooms WeChat to lose

Only two years ago, we were applauding for WeChat’s innovative edge. But to review it today, this mobile Internet giant does not really get away from its QQ model. With communications, social activities, e-commerce, payment, smart hardware platform and reading sources all integrated in one, a single WeChat makes up an entire mobile Internet.

QQ and WeChat aside, almost all scaled Internet products are not contented with existing in single product form any more, this also does not exclude Weibo, Taobao and Meituan. Being too eager to cash in their booming traffic, some apps integrated social function with e-commerce, squeezing finance management and O2O into the shopping carts, while some even transformed news clients into app downloading platforms.

On the other hand, however, western products like Facebook and Twitter focus only on socializing without expanding into e-commerce and payment like WeChat and Weibo did. Even Whatsapp, whose users now mount over 800 million, is single-heartedly dedicated to communications. American Internet companies prefer making products simple and using different products to cater user needs, whereas Chinese Internet companies prefer making it huge and inclusive, trying to make things convenient for clients in every conceivable way. For example, WeChat is exactly the combination of Whatsapp and Facebook.

This eventually brought WeChat to the bottleneck where it now stands, though it was able to embrace an initial user boom, thanks to money burning in the underdeveloped instant messaging market and appreciation from overseas Chinese. At the end of the day, communications is all what the users need. Socializing and LBS services are simply minor to what is necessary. With mounting pressure from Whatsapp and Facebook, it is only imaginable that WeChat confronts a hiccup.

WeChat lacks small competitors

Different from western Internet products that focused on globalization in the first place, Chinese Internet companies were incubated in the mild domestic environment before fully fledged in both user size and business models to chart into the global water. Undeniably, Chinese Internet companies also plagiarized western product forms. These two factors determined that WeChat should find an appropriate competitor in globalization.

Though Tencent adopts an all-in-one approach, vying for the domestic market with counterparts like Alibaba who think alike, it has only one single product to brag about when going out. Competitors determine your horizon. From forms to functions, WeChat shows astonishing resemblance with LINE and Kakao. More similarly, all the three did not manage to break out of Asia, with most users concentrated in the domestic markets.

But Tencent aims higher than that. It is determined to become international instead of non-Asian. Generally speaking, while WeChat mainly focuses on the American markets where competitors like Whatsapp and Facebook loom large, it also lacks small and specific competitors. Pathetically, WeChat did not garner this potential blue ocean. Quite on the contrary, it is only fumbling forward due to the lack of specific product orientation and competitors.

Among the three BAT giants, Baidu is able to grow at a leisurely pace in the domestic search engine market where Google cannot stretch its arms. Likewise, Alibaba also follows systematic strategies overseas. Since 2005, the grandiose Tencent has been preparing itself for globalization, yet without specific competitors, it is doomed to encounter setbacks in the overseas market, where socializing are not generally favored.

Three potential approaches

As the domestic market reaches saturation point, globalization becomes the necessary choice for Internet giants. Though BAT’s overseas strategies do not turn out well, there do exist successful cases. If you ask me, there are three approaches for Tencent to try out.

1. Win-win partnership

Judging from how overseas Internet companies come into China – Amazon purchased Joyo.com, Yahoo partnered with Alibaba, and LinkedIn made relevant integration with social media platforms like Weibo and WeChat - though WeChat cooperated with Google for a while when entering the U.S. market, its expansion is only limited in user figures. Overall, what WeChat has chosen is a lone strategical battle, despite its highly customized localization and campaign efforts.

If the overseas version of WeChat can open up part of its functions and partner with local businesses to make amends for each other’s disadvantages, the results would be different. For example, before Facebook acquired Whatsapp, WeChat was absolutely capable of making up for Facebook’s weakness in voice messages. If WeChat can leave its ‘friend circle’ social functions to Facebook, and provide due assistance for Facebook’s entering China, such a two-way globalization approach would be quite a workable idea. Additionally, when it comes to WeChat Pay and WeChat Buy, there are also a lot of opportunities for Tencent to team up with local businesses, only if it can well balance ambition and the reality.

2. Cash in investments

The overseas strategies carried out by enterprises like Huawei and TCL are largely associated with investment and acquisitions. What’s more surprising is Tencent’s passion and dexterity in overseas merger and acquisitions, especially in the Korean, European and Singapore markets. It has invested in about 30 gaming and social media companies, including Blizzard and Kakao Talk.

Domestically, WeChat has become an important venue for Tencent games. In the overseas market, it could also intensify its gaming impacts. On the one hand, WeChat can serve as a portal for the debut or reproduction of its invested gaming contents, and try to implant WeChat Pay into the games on the other. Years ago, Yixin was outperformed by WeChat in socializing and communications but then generated huge profits after a change of focus on games. WeChat could absolutely follow such a model. This provides an alternative thinking for Tencent: using WeChat to cash in its investments, boost market share and rectify investment direction.

3. Counter-globalization

When overseas Internet companies enter China, Tencent is the partner that cannot be ignored, thanks to its incomparable impacts as a social media. Since most hardware products or Internet apps first matured in the domestic markets before expanding overseas, Tencent could be an important channel for those overseas intending to enter China.

In all, WeChat’s globalization is far from being satisfying. If only its international version can cut back on some Chinese thinking and be more simplified to achieve accurate definition and orientation. 

(This article is published and edited by TMTpost with authorization from @Alter, please note reference and hyperlink when reproduce.)

Translated by Sharon Lee(Senior Translator at ECHO), working for TMTpost.