Tencent, China’s biggest online entertainment and social network company, has reported a 47% jump in second-quarter profits. Wechat, akin to WhatsApp, has superseded all its counterparts and dominated China messaging markets by 2016. By the reckoning of HSBC, a bank, according to current valuations for tech firms, WeChat could be worth over $80 billion already, which is totally beyond analysis`s expectations. From the standpoints of value proposition, I think that the reasons are as follows.
As a pioneers that introduces messaging app into China, Tencent has garnered enormous success from its precedent product QQ. While QQ`s targeted consumers group is Chinese teenagers, WeChat has proven to have more concise interface and omit unnecessary flashy functions, which are more accessible for middle-aged users in China who cannot master the operation of electronic device well. In a society that value time, Wechat also thrives with its integration of a wide spectrum of online services including video chatting, ride sharing services, online shopping, food deliveries etc. For it is always difficult for most people to memorize their accounts and password separately for each app that may require different forms, WeChat perfectly avoid this awkward situation.
Nowadays, the public suspects increasing important issues relating to cybercrime, malware and privacy. By persuading users to link their ID and bank accounts to their app, WeChat provides customers with reassurance that they will be safe using it. Another notable strength of Wechat is that it provides theirs users with platforms to engage in competition ranging from running distance, red bag campaign to games scores ranking. For example, the person who run the longest distance would be on the top of ranking board and receive others` compliments, which counters the individual`s desire for recognition in today stressful world.
Most importantly, all these functions above are free for customers to adopt, because the revenue source of its company is mainly from its online games and e-commerce. In June, Tencent, the company of WeChat, launched a mobile game named Miracle Nikki in Korea market, which at once topped the mobile game ranking. Same thing also happened in its launch in Japanese Market last year. This game requires a WeChat account to play and generates huge capital for the company. WeChat also acts as a platform for the connection of vendors and consumers, the low operational cost of not paying license, concise interface requiring less technical operation gives WeChat the comparative advantage over other online shopping websites.
By solving targeted customers` problems, providing them with enjoyment and differentiating itself from competitors, WeChat has occupied a conspicuous proportion in today`s China messaging market. And I believe it will achieve greater success as long as it runs on the right track basing on the value proposition.
Word-count:446
Reference:
http://www.bbc.com/news/business-37094256
http://dealbook.nytimes.com/2014/03/20/wechat-valuation-is-still-just-a-hunch/