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Global Markets: How apps like WeChat own the monetization conversation in APAC

by Michelle Ao on Jun 29, 2017

Home to 4.5 billion and growing, Asia-Pacific (APAC) boasts 60% of the world’s population, huge mobile device and app adoption rates, and a double-digit lead in its percentage of users who make mobile purchases.

Though among the most saturated mobile markets in the world, China, Japan, South Korea, Hong Kong, Thailand, Malaysia, Singapore, Vietnam, and others in the APAC region still have much room to grow. One of the largest drivers of economic growth will come from purchasing via mobile messaging apps—the ‘gotta have it’ app in APAC. Three core strengths define the APAC marketplace, the world’s crystal ball for mobile markets:

  • Penetration (of devices, apps, and mCommerce)
  • Integration (of technology, experiences, and utility)
  • Adoption (of brands, shopping, and payments)

For the uninitiated, WeChat is a ‘gotta have it’ app in APAC. It’s sort of a messaging app that’s really a platform, within an interconnected ecosystem, that’s providing inspiration for the rest of the world’s future mobile experience. In May 2017, WeChat reported 938 million Monthly Average Users (MAU), up 23% from just the previous quarter, and did $21.9 billion in Q1 of 2017.

By comparison, Facebook Messenger has about 1.2 billion MAU, but worldwide downloads of Facebook Messenger have only grown by about 5.66% from Q1 2016 to Q1 2017, and that app’s revenue numbers don’t even crack the Top 10 in the US market (and Facebook may not even be the best-positioned player in the West, anyway).

So, as the world ponders a looming future of hyper-connected, chatbot-dense, and brand-rich messaging apps at home and at work, here’s a look at what the strength and trajectory of mobile markets in APAC can tell us about the future.

APAC smartphone penetration

APAC is home to 5 of the top 10 global markets for smartphone penetration, including Singapore (88%), South Korea (83%), and Hong Kong (79%). Retail-branded apps—even those for a local convenience store—are quite popular, and more than 50% of all users routinely buy using mobile purchases. But more than being just a transactional instrument, in APAC, mobile apps are an engagement strategy and a way to service the whole of the customer’s journey.

In terms of ‘nearness to the mark’ in creating the one omni-channel mobile shopping experience that just works, APAC is the world leader. Mobile consumer demand for goods purchased and shipped from devices, apps, and experiences is even changing how the logistics industry is evolving there, with established providers such as DHL wrangling location, time, and predictive data across mobile, digital, and physical channels.

Not coincidentally to APAC’s high rates of adoption, app publishers are at an advanced state of capability. App marketers in Asia-Pacific are good and getting better at zeroing-in on the implications of a user’s frequency of engagement, how they interact inside and outside their app, and to what commercial ends these things lead. Because of this, brands in the APAC market are well-equipped (and willing) to invest in creative data marketing strategies that catch users at the right moments of their meandering journey.

Chat app integrations

Chat apps are the window to the customer’s soul in APAC, but the chat apps here are really so much more. It’s a chat app, but it’s also an eWallet, your social network, your filing cabinet, a communications tool…the integrated chat experience common to APAC needs a lot of words to describe it, but only one brand: WeChat (see below).

APAC isn’t home to 6 of the top 7 global markets for total percentage of mobile commerce shoppers simply because people like to shop. It’s because app publishers and brands have gotten extremely good at using apps to reach mobile users when they’re motivated to shop, searching for information, making payments and seeking rewards from brands for loyal behaviors. Mobile devices, apps, and transactions are so much a part of APAC user’s daily lives that barriers to user adoption, including building trust, are more easily navigated.

APAC’s differences from the Western market

Imagine an entire world where there is no Facebook, no Google, no Apple Pay, and none of the major apps that the Western world is used to. Now, remember that this same world has some of the most engaged mobile consumers in the world. People are still using something to search, socialize, organize themselves, and pay for things, aren’t they? In APAC, that something is WeChat—the mobile native’s go-to app for everything.

WeChat’s beauty (and the essence of all great mobile experiences) is that it provides extraordinary utility for the user. You can do anything, find anything, and buy anything using WeChat. All the brands you love can find and reward you—loyalty rewards are huge with mobile users in APAC. But more than that, WeChat is at the vanguard of how Artificial Intelligence and chatbots can be used to engage mobile users.

The pervasive, all-encompassing utility within the experience of a simple chat application will set a clear direction for the evolution of mobile markets globally. WeChat is gathering a treasure trove of data about customer journeys and doing it with chatbots. As the AI that makes them more closely mimic human beings evolves, app publishers will reach new peaks of efficiency in attracting and retaining users.

Looking forward

Big and getting bigger, in the last quarter of 2016, APAC was the leading region in terms of mobile connection penetration at 112% and rising. Servicing the consumers’ love for chatting, brands will continue to expand chat bots to create interactive, relatable engagements. On a converging behavioral and technical path, by 2019, digital wallets will be the most popular payment method in APAC.

Building on a deeply engaged market and rising tide of connected data, app publishers will focus on increasing frequency and duration of interactions, while brands will seek to create more personalized total customer journeys across digital and physical realms. It’s a guarantee that other global regions will scale up in coming years, and many will eventually follow WeChat’s lead, but the barriers each market faces in terms of penetration, integration, and adoption are significant, and Beijing ain’t Baltimore.

As the Western world struggles to catch up with a WeChat clone of their own, APAC markets, which have evolved beyond thinking of one-off mobile transactions, will continue to grow by providing mobile users with a holistic, integrated journey.

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