Friday, May 16, 2014


Mobile Chart Of The Day

WeChat Nears 400 Million Users, But Growth Is Slowing

Tony Danova | | May 15, 2014
WeChat, the China-based messaging competitor to WhatsApp and LINE, now has 396 million monthly active users worldwide, according to the first quarter earnings report from parent company Tencent.
While an audience of nearly 400 million is impressive, WeChat's growth is starting to slow.
WeChat added an average of 14 million users per month during the first three months of 2014. That's less than half the 28 million users added per month in the fourth quarter of 2013.
WeChat still hasn't managed to catch up to its chief competitor, WhatsApp, which now boasts an audience over 500 million.
Remember MYSPACE? Once the Facebook of its day, the early social network was created in 2003, 11 years ago. 
3 years later the 100 millionth subscriber signed on and a universe was created. Rupert Murdoch's News Corp became a believer and paid for than $500 million for MYSPACE. A man adept at spotting trends and getting out front overlooked something. This was only the beginning of a communications revolution that accepted the challenge and potential of the internet and drew young people (for the most part) together around the world. MYSPACE was the beginning of an accelerating communications revolution that has not slowed down. Life turned out to be short for those who jumped aboard this high speed train.
There was no unique proposition at work here, just the first door opening on a new universe. FACEBOOK came along, grew to a billion and MYSPACE was sold for $35 million 7% of its valuation 5 years earlier. The first significant social network lasted, 5 years. (The decline started long before the sale.)
The story of FACEBOOK is familiar. It dominates. Does it?
In China BBS bulletin boards started the communications explosion on the internet in the 1990s. Given a population of close to 1.4 billion and despite a small percentage of internet users and computers in China's 1990s, the traffic quickly grew into 10s of billions of messages flying back and forth daily. The message that early adopters catch on fast.
Tencent, the Chinese communication giant that few people outside of China have heard of then introduced QQ, a message service that parallelled the explosion of mobile telephony in the Middle Kingdom. All of this paralleled the comparatively slow growth of social media outside China. The young generation in China, high school through college and university were early rapid adopters of the tools of social networking. QQ soon had company in imitators of FACEBOOK . No one dominated. Everyone just grew. Tencent has been fast enough on its feet to innovate and survive many of its early competitors, much as FACEBOOK is trying to remain relevant.  
But another phenomenon was taking place. New platforms were evolving rapidly and with the exception of QQ which remains viable in China, changing horses in midstream became a standard for users. 
Weibos took over from bulletin boards as the preferred platform (like Twitter) for information and commentary in China. Each platform quickly grew to 100s of millions of users, figures that still boggle the non-Chinese mind but are common fare in China. 
(What's 1% of 1.4 billion? The penetration of computers in China has reached 600+, and estimates (Forbes) are that there will be more than 750 million internet users in China by 2016. The comparable figure in 2010 was 450 million. And while we are at it, China's domestic smartphone sales exceeded the population of the US last year. 500 million Chinese are now using Smartphones to access the Internet. You get the picture)
As each social network platform grows and sees its day in the sun shrink the wildfire of growth accelerates. The 5-6 year growth that MYSPACE enjoyed happened in less than 3 years with Weibo. No sooner had Weibo reached its pinnacle, along came WeChat and the younger generations leaped aboard.
The slowing growth of WeChat reported in the BI INTELLIGENCE report at the top is an example of the rapid platform evolution that is characteristic of social networks. The difference seems to be that each new platform has a shorter lifespan than its predecessor. The established players overpay for embryonic platforms they see as potential material to be grafted onto their cores to keep them relevant and satisfy users.
Will it work? 
The Mark Zuckerbergs of the world do not have time to look over their shoulder to see where the competition is. This is a new form of competition. Forward competition, trying to outguess today's user who is likely to jump on a new offering. There is no brand loyalty in social networking. Just as there are now millions of apps for mobile telephony and tablets, there are international armies of young entrepreneurs with vivid imaginations and the skills to offer "the next best thing".
During the AT&T era in the United States,  a black rotary phone was the only standard, and calling long distance was something you did in an emergency or to announce birth, death or marriage. The older 1/3 of the baby boom generation remember that world. Their grandchildren are now part of another world and we're all in this game together. As daunting a challenge as this new world is for the businesses that are in it, it is as even more profound change for the societies that are being drawn together in ways that were once considered science fiction.

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