Mobile Message App’s Monetization Strategy- What Wechat can learn from Line & KaoKao Talk.
As a loyal wechat user, I have noticed two recent move of wechat. One being starting to offer paid stickers( emoji). Secondly, The Tencent group (Wechat’s owner) has announced that they will be charging annual fee for the wechat official account. Wechat is know as the most popular free messaging app in china, their recent move interest me to do some research into how those free mobile message app monetize for profit. Here is the summary of the top monetization strategy from those mobile message apps.
1. Stickers
Stickers typically come in “packs” of between ten and twenty and can be downloaded and used within one-to-one or group chats. Selections of free sticker packs often produced by the app itself, are offered to drive awareness and encourage usage with the hope that once users are hooked they will become premium sticker users. Premium stickers packs are usually priced less than $2 per pack, they are a mixture of the app own-produced content, content form established producer such as Disney or Sony and from smaller providers who produce bespoke content especially for the app.
In my opinion, having paid sticker is the best monetize strategy for the app because it’s cheap; users enjoy those sticker very much while paying for that. It’s also a sustainable strategy; people who like using those stickers are likely to buy more new stickers as well. In July 2013,the hot Japanese message app is earning $10 millon per month alone from the stickers. Wechat’s strategy of modeling Line’s sticker monetization strategy is a very smart call.
2. Official Account
Official accounts give brands, celebrities and merchants the ability to connect and engage directly with users. Content could include basic marketing messages but more likely will take advantage of the closeness of the relationship to the user and include prizes, media, exclusive news, offers, coupons or discounts.!
There’s several different ways for the apps to monetise through official account!
1. Pay to create and promote official accounts!
2. Pay per engagement e.g. per contact added, per message exchanged, per content downloaded!
3. Pay per message e.g. brands could buy bundles of messages to send or receive!
With messaging apps having many millions of users in specific markets its easy to see how brands would be eager and willing to pay to get access to these users, particularly if users gain something valuable in return and are incentivised to connect to the official accounts.
Line is also a pioneer on this, according to the blog on “the next web” the company have to pay a one time fee (around $6,600) just to create the account. Other than that, the company will also pay to send messages. A 15 monthly message bundle for the official account is $5,000 per month while the 30 monthly message bundle is around $6,000. Wechat should definitely leverage on the official account, but I would suggest having different price levels for different size company. In that way wechat will have a bigger market for the official account, based on the fact that a big portion of official account user now are small entrepreneurs. Tencent should defiantly keep this portion of customers.
3. In-app Game Platform
Messaging app game platforms enable their users to discover and download games and other apps, play against each other and share results and leaderboards. Users can also buy virtual items and purchase extras like coins, levels, tips, boosts or anything that the user needs to progress in the game.! Revenues come from in-app purchase of virtual items in games (coins/levels/tips – things that users need to progress in the game.
The Korean app Kakao Talkhas 30 million users have played at least one of their 180 games. There are 400 million+downloads $311 million in revenue during the first half of 2013!
Currently wechat has started to offer free in-app games, which are very popular among users. This give wechat a huge potential market for further monetize through the in-app games.