The role of messaging apps has evolved past that of simply messaging.
Today, they are incorporated with online payment methods and offline-to-online (O2O) shopping amongst many others.
At the forefront of such innovation stands WeChat and LINE – two apps that dominate the messaging activities of the Asian demographic. Beyond visually appealing stickers and a host of memorable cartoon ambassadors, both have ventured into previously unrelated fields.
LINE and WeChat have extended their services from the basic functionality of messaging to various payment methods.
WeChat offers the WeChat Wallet, a platform on which users can order taxis, book movie tickets, check into plane flights and even send red packets under a single integrated user interface. Moreover, the Wallet allows users to make payments with ease in physical stores using the application.
Moreover, the Wallet offers flexibility of payment by allowing users to pay through WeChat Pay or the ‘Find a Friend to Pay’ function which allows for the bill to be sent to a friend. They also offer the ‘Fundraise from Friends’ option to provide for collective group payments under RMB 10,000 or US$1,500.
From LINE comes LINE Pay which, in a similar manner, allows users to register debit and credit cards for peer-to-peer (P2P payments) and LINE Store purchases. It currently allows for easy transfers, splitting of bills as well as the withdrawing of cash since LINE accounts and bank accounts are linked. 1 million accounts have been registered in Thailand since its inception.
LINE has also partnered with Japanese credit card company JCB to launch the LINE Pay Card targeted at LINE’s 68 million Japanese users as of March 2016. It operates as a pre-paid card and features attractive designs to appeal to the Japanese market.
In addition, the LINE Points feature establishes a point system that rewards users for using LINE services. The user earns 2 points for every 100 yen – or US$1- spent which is credited to one’s LINE Pay Balance in various increments, coin balance for in-app sticker and LINE Store purchases. Possible developments include P2P transactions and credit transfer from LINE Pay into individual bank accounts.
Mobile payments have led to greater opportunities in mobile and hyperlocal commerce which involves the integration of offline stores with online digital platforms to enhance customer experience.
WeChat enables businesses to market products and services to customers through official accounts. With 50% of WeChat’s 700 million users registering their bank cards with the app, this revolutionary method of facilitating transactions has resulted in China’s mobile commerce accounting for nearly 50% of Chinese e-commerce in 2015.
WeChat and its 10 million virtual storefronts are one of the largest virtual shopping malls worldwide. It brought in Chinese e-commerce company JD.com, allowing for users to search for products and make purchases in-app.
Users are shown online merchants as well as physical retail stores with number of products successfully sold and satisfaction levels of other users. This is coupled with the ‘Quick Buy’ aspect mentioned earlier to allow full purchases on the mobile platform alone.
By incorporating external e-commerce platforms as well as some of its own – QQ Wanggou, Paipai and Yixun – Tencent can channel resources effectively and gain leverage against Alibaba’s e-commerce business.
It is estimated to process a whopping US$550 billion in payments, taking double the share of PayPal at US$282 million and making it a close rival to Alipay at $519 billion in 2013.
Messaging apps – namely WeChat – have ventured into unfamiliar territory by releasing investment platform Licaitong in January 2014 to compete with Alibaba’s investment fund Yu’E Bao.
Run by China Asset Management, Licaitong is an opportunity for Tencent to encourage users to link bank accounts with WeChat profiles.
Funds are accessible within the messaging app and there are no stipulations in contrast to fixed deposit accounts at conventional Chinese banks. With a backing of US$16.2 billion and an estimated 30 million users, Licaitong is strongly supported by WeChat Pay and its seamless integration of payments.
LINE has also steered its course into the market of delivery services. The LINE Man was launched in May 2016 and operates as a localized, on-demand service. By partnering with Wongnai, a popular Thailand restaurant review app and Lalamove, a Hong Kong-based start-up that operates as an Uber for motorbike couriers and truck drivers, LINE can utilize Wongnai’s food listings and Lalamove’s delivery services to deliver takeaway meals and products from convenience stores – by green-jacketed men on scooters.
From WeChat and LINE’s ventures, the concept of the messaging app has certainly been reinvented. With continual innovation and development, expect these apps to grow in popularity and function – their full potentials are yet to be fully realized.