Complete the sentence: Chinese influence is growing in ___________. Politics? Business? Culture? Yes, all of them. But, more than ever, Chinese influence is growing on our phones.
A perception a few years ago was that Chinese online companies simply copied Western ones. Silicon Valley built Google, Twitter and YouTube. China’s response was YouKu for videos, Baidu for search and Weibo for microblogs. But now many of the biggest mobile innovations are coming from the East. In 2019, it’s Silicon Valley’s turn to follow.
Chinese companies have benefited from a ‘Galapagos effect’ where they have been allowed to develop in the home market free from the competition of foreign giants: Google, Facebook, YouTube and Instagram are all blocked or restricted. While at the same time, Chinese companies can learn from what works on those platforms. With an online population of 800 million, China has a big enough domestic market for companies to become profitable just by being there. This allows them to build up the funds needed to expand abroad.
Two of Carat’s ten digital change trends for 2019 (highlighted in the Carat Trends for 2019 report) originate from China. ‘Contextual Commerce’ and ‘Games in Messaging’ are new developments in the West, but have been commonplace in China for years.
Contextual Commerce is the evolution of social media platforms into shopping malls. A great example of this is China’s largest social network, WeChat, which was born as a messaging app. Over 400 million of its 1 billion users have connected their payment cards to the account. Seamless in-app shopping with WeChat’s own mobile payment system is an integral part of the social network’s value.
Another example is the Chinese ecommerce giant Alibaba. Every autumn Alibaba live-streams a ‘See Now, Buy Now’ fashion show in the run up to their Singles Day shopping festival. The live streams last up to eight hours, and viewers can instantly buy everything they see on the catwalk, using Alibaba’s payment system Alipay.
Gradually, the West is starting to follow suit, and products on social feeds are becoming shoppable. Instagram had previously introduced a new “Shopping” tab in the explore section of the app, which has now brought about fully-fledged ecommerce functionality. Late last year, Snapchat unveiled that it would enable ecommerce functionality in-app. Pinterest has also introduced ‘Product Pins’ that enable brands to keep price and product details up to date, no matter how long ago a picture was ‘pinned’. New social shopping apps Depop and Poshmark look like Instagram, but instead of seeing friends’ selfies, their feeds are filled with merchants’ products – where (naturally) users can follow, like, and purchase.
In China, Contextual Commerce has given a lot of power to social media influencers. They know how to get the best engagement on social platforms, having loyal fans with potential to become shoppers. In the West influencer economics could be disrupted further, as platforms expand from a marketing channel to a sales channel. Influencers may find themselves ever-closer to the point of sale. Its QVC, but with instant clickable buying and millennials.
Games in Messaging – the blurring lines between messaging and gaming – is another trend from China that’s reshaping the concept of social media.
Tencent is the owner of WeChat, but it’s also the world’s biggest games company. It partly owns the online video game Fortnite which is emerging as a social network. Alongside this, the company is expanding WeChat into a gaming platform. Since December 2017, WeChat’s in-app games have been a huge driver of the messaging platform’s engagement. 17% of Chinese now play online games on a weekly basis.
It’s little wonder then that Facebook and Snapchat are introducing games and playful elements on their platforms. For instance, Facebook Messenger’s ‘Don’t Blink’ game challenges all those on a video call to keep their eyes open for as long as possible. Facial recognition spots closed eyes and the last one to blink wins. Snapchat rolled out last year its AR games feature, Snappables, which uses Snap’s familiar lens formats. This spring the partly Tencent-owned company is reportedly launching its own gaming platform.
Both trends; shopping on social platforms and gaming on them, shows how the role and functionalities on social platforms are expanding. On WeChat, users can do anything from shopping, banking and dating to hailing rides, booking flights and ordering food. These various functions are through their ‘mini-programs’. These programs effectively make WeChat an operating system rather than an app - everything else runs from it. For example, to call a taxi from Didi Chuxing, ‘the Chinese version of Uber’, you would likely use Didi’s mini program on WeChat, not Didi’s own app. WeChat now has over one million ‘mini-programs’ – over half the number of apps in Apple’s app store.
It’s safe to predict that the influence of Chinese digital giants will grow even more in 2019. In January, Facebook announced it plans to integrate its messaging services on Instagram, WhatsApp and Facebook Messenger. In March, the New York Times revealed, Facebook was developing its own payment system. And in his recent note on the company’s future, Mark Zuckerberg wrote:
“We plan to build – – more ways for people to interact – – including calls, video chats, groups, stories, businesses, payments, commerce, and ultimately a platform for many other kinds of private services.”
Sounds familiar? Chinese influence has never been bigger.