Mark Zuckerberg Has WeChat Envy—and That’s Terrifying
Trade talks between the U.S. and China appear to have bogged down in recent days, in part over U.S. concerns China isn’t doing enough to prevent its companies from ripping off American technologies.
But I find no small irony in the fact that, even as negotiators from the two countries haggle, the founder of one of America’s biggest tech companies—none other than Mandarin-speaking Mark Zuckerberg—signaled Wednesday in a 3,300-word blog post that he hopes to copy the business model of WeChat, the super app pioneered by Chinese technology giant Tencent Holdings.
Zuckerberg made no mention of Tencent or WeChat in his post. And many analyses of his manifesto assume the Internet company whose business model he most hopes to expropriate is Snapchat. “It’s another instance of Facebook copying Snapchat,” wrote Todd Spangler in Variety. “Facebook Just Shoplifted Snapchat’s Best Idea,” blared the headline on Kara Swisher’s column in The New York Times. (Snapchat founder Evan Speigel’s disdain for Zuckerberg is well known.)
But I agree with Adam’s take in Friday’s Data Sheet: “Facebook hopes to keep making billions off its namesake platform and add new business models to its encrypted communications and messaging services, namely payments and e-commerce, which is WeChat’s model in China.”
WeChat, developed by Tencent’s Allen Zhang in 2011, often is described as China’s “one app to rule them all.” It allows people to message each other via one-on-one texts, audio or video calls, and form groups of up to 500 to discuss whatever issues they like. But they also can use WeChat to: schedule appointments; hail a car; make restaurant reservations; buy groceries; wire money to friends; book a hotel; buy insurance; invest; and much, much more.
WeChat now claims 1.1 billion monthly active users. If you live within China’s “Great Firewall,” it’s just about impossible to get through the day without a WeChat account. Business Insider’s Harrison Jacobs, who recently spent six weeks in China, describes the difference between his life before and after downloading the app as “like being able to see after spending a week blind.” At the moment, no digital platform in the West comes close to matching WeChat’s all-encompassing functionality.
For Facebook, expropriating the WeChat model won’t be easy. As the Times’ ace China tech correspondent Li Yuan points out, WeChat’s business model differs radically from Facebook’s in that it “isn’t dependent on advertising for making money.” Instead, WeChat relies on on its mobile payments system (which Facebook lacks) and charges commissions for services provided via its platform.
Zuckerberg asserts that he is looking for a way for Facebook to pivot to privacy. But if he is seeking to emulate WeChat, which amasses data about a far broader range of user activities than Facebook does now, his company may end up knowing more about us than ever.
More China news below.