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WeChat, Line use marketing might to upend rivals like WhatsApp, Viber
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  • WeChat, Line use marketing might to upend rivals like WhatsApp, Viber

WeChat, Line use marketing might to upend rivals like WhatsApp, Viber

FP Archives • October 23, 2013, 04:05:38 IST
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In the battle to become the global messaging app of choice, China’s WeChat and Japan-based Line have brought out some large marketing guns - TV ads featuring soccer star Lionel Messi, for instance - that have powered promising bursts of overseas growth.

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WeChat, Line use marketing might to upend rivals like WhatsApp, Viber

Tokyo: In the battle to become the global messaging app of choice, China’s WeChat and Japan-based Line have brought out some large marketing guns - TV ads featuring soccer star Lionel Messi, for instance - that have powered promising bursts of overseas growth.

The big bucks strategy stands in stark contrast to other messaging apps, or even apps in general, which spend little on marketing. US rival WhatsApp eschews advertising altogether and has instead relied on word of mouth to become the dominant chat app in many Western countries.

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WeChat, a unit of Tencent Holdings Ltd, has budgeted up to $200 million for marketing overseas this year including the Messi ads. Line, owned by Korean company Naver Corp, declines to say how much it spends but has relied heavily on celebrities in TV ads in many markets.

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Spurring them on is the belief that now is their chance to build an international brand, and that if they play their cards right, they can become serious threats to more established social networks such as Facebook Inc and its instant messaging service.

[caption id=“attachment_1188181” align=“alignleft” width=“380”] ![WeChat](https://images.firstpost.com/wp-content/uploads/2013/10/WeChat_380_WeChat.jpg) WeChat has budgeted up to $200 million for marketing overseas this year including the Messi ads. Pic: WeChat[/caption]

Both apps have added ‘stickers’ or large cartoon-like emoticons, games and a raft of other features to draw users in, but the jury is still out on whether they’ve reeled in long-term active users and just how far their advertising dollars will stretch.

“A lot of Line’s growth has been driven by marketing. The question is how sticky that will be?,” says Benedict Evans, a mobile and digital media consultant based in London.

DOWNLOADED BUT ACTIVE?

A plethora of messaging apps, including the likes of Viber and Kik Interactive, are seeking to capitalise the appeal of free SMS services - especially in emerging markets.

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But expanding overseas is tricky. Analysts cite Korea’s KakaoTalk as an app that, despite sealing up the local market, hasn’t done as well due to its lack of marketing clout. KakaoTalk declined to comment on its advertising budget.

“The difference between the apps is who backs them. Both (Line and WeChat) can fund global ambitions of penetration first and then monetization,” said David Gibson, senior research analyst of games and IT at Macquarie Securities in Tokyo.

Download numbers for Line and WeChat have been encouraging although both firms decline to specify how many foreign active users they have.

Line says it has notched up 270 million registered users in just over two years, with 80 percent of those overseas. In Thailand, it has 18 million and in Spain, 15 million. In India, where it tied up with Sony Corp to be pre-loaded on Xperia smartphones, its number of registered users jumped to 10 million in the three months after its July launch.

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Since introducing the Messi ads in 15 countries in July, WeChat - primarily seen as a Chinese app with the bulk of its 236 million active users in China - has seen the number of its foreign registered users shoot up rapidly.

It said it had 100 million registered users overseas as of end August, double the number in May, as it focused on extending its reach in the rest of Asia and Latin America.

But toppling an incumbent is never easy.

Line’s downloads in Spain, for example, tripled to 15 million in five months after TV commercials starring celebrities from a popular soap opera were aired this year. At one point, it overtook WhatsApp in terms of user numbers before handing the lead back, although it commands a respectable No. 2 position, with 50 percent of smartphone users having downloaded the app.

“It’s difficult to beat an established service that people are used to,” Line CEO Akira Morikawa said in an interview last month.

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One of the oldest messaging apps at four years, WhatsApp boasts 90 percent penetration among iPhone and Android smartphone users in several countries, including Mexico, Italy, and India, according to an app analysis firm Onavo Insights.

COUNTING ON CUTE

Much of Asian messaging apps’ popularity has been attributed to the stickers sets, which are offered for around $1.99 and are often adapted for local cultures - FC Barcelona players for Spain and Ramadan-themed stickers for Indonesia, for example.

“As Spaniards like to express our feelings using our bodies and facial expressions the stickers are very cool,” said Marina Couso, a 29-year old Spanish animator and Line user living in Tokyo. “I can never stay angry at my boyfriend long if he sends me a cute sticker.”

While the apps’ feature-rich environments, which include offerings such as horoscopes and weather forecasts, appeal to some, to other users the platforms may seem cluttered.

WhatsApp, by contrast, offers no stickers and charges only an annual subscription fee of $0.99. But its users send an average of 100 messages a day - far more than the average of 30 for a Line user, calculations based on figures from the companies show.

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MONEY FOR MARKETING

Making money off users is something that most chat apps are leaving for the future. As such, current marketing strategies could prove costly, especially in the hard-to-crack US market.

Even WhatsApp has not gained much traction in the United States - only 10 percent of smartphone users have downloaded it, half of Facebook Messenger’s share, according to Onavo Insights.

Of the two dominant Asian chat apps, WeChat looks to have the deeper pockets. Tencent is a $100 billion company and although its WeChat marketing budget pushed second-quarter profit below market expectations, the company’s president, Martin Lau, has stressed that this is the year to spend aggressively.

For Naver, an $17.6 billion company, expectations of an IPO for Line abound. Until then, analysts say, TV advertising fees in the United States are likely out of its reach.

“You can do TV marketing in Indonesia, you can do TV advertising in Spain, but if you want to do the same in the United States then your coffers must be really full,” said Serkan Toto, a Tokyo-based technology consultant.

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Reuters

Tags
Emerging markets Lionel Messi BBM Spain SMS FC Barcelona TV commercials WhatsApp Viber WeChat emoticons line Tencent Holdings Ltd KakaoTalk Kik stickers Macquarie Securities
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