80% of smartphone users are predicted to be using messaging apps by 2018, but it will be for more than just communicating with friends, family and colleagues. Message commerce is going to transform the way e-commerce customers interact with brands.
A fantastic e-commerce website is may prove to be old hat. To understand the potential of message commerce we need to look to Asia. 58% of the world’s messaging app population live in Asia, so it is no surprise they are leading the way in using these apps as far more than communication platforms.
WeChat dominates the Chinese market, with 650 million active users at last count (Statista). The company is using one click and QR payment technology to make payments for a range of online and offline services and products more convenient for their users.
Users can transfer money to each other online, alongside advertising and selling to their contact list via the app. Further banking and e-commerce services are also accessible. Games, food, flights, movie tickets, taxis and more can all be purchased within the app using the WeChat Wallet payment system.
Although one click mobile payment systems have been introduced by specific brands in the Western market, there currently isn’t an equivalent ‘one stop shop’ like WeChat. WeChat have led the way, and retailers such as Coca Cola, McDonalds and Starbucks are now running in-app brand stores.
Retailers are seriously profiting from the platform. Last summer, Chinese company Haier recruited 30,000 people to sell their products via the app and they hope to have 1 million vendors on the app this year. It will only be a matter of time before chat platforms in the UK start to expand their message commerce offerings.
Money transfer is one concept that has made the transition, having been adopted by Western giants SnapChat and Facebook messenger. But we can expect other messaging commerce services to emerge in Western markets in 2016. Popular North American messaging apps Kik and Tango are specifically aiming to mimic WeChat’s business model.
LINE and Kakao Talk
Again, the expansion of both of these platforms began with message commerce services. LINE’s with a cash transfer service, called Line Pay and Kakao Talk’s with KakaoPay. KakaoPay accrued over 5 million users over its first 12 months, nearly 20% of all credit card users in Korea.
Oddly, rather than following the lead of WeChat’s successes, LINE launched a separate ecommerce app – Line Mart. However they do provide taxi ordering and food delivery services within the messenger app, which are potentially to be joined by a music download service in the near future.
Kakao Talk have more closely mimicked WeChat, providing options to pay for a wide range of things via message commerce; flights, movies, charity donations, the list goes on. As gifting culture is important in Korea, functionality to buy vouchers for food, services and products for friends was one of the first functions they introduced.
This offering is set to expand in 2016 as the company says they “are looking to build a comprehensive pay platform that includes utility bill payments, membership point management, automatic payments and more.”
What can we learn from WeChat, LINE and Kakao Talk?
- One click or QR payment systems make mobile payments quicker and easier
- Removing the barrier of leaving the app to pay makes ecommerce easier
- Users like the ‘one stop shop’ concept
- There are ways to better monetise chat platforms beyond advertising
What can we expect from western messaging apps?
1. In-app payments
SnapChat and Facebook Messenger have already launched peer-to-peer payment functionality. If they follow in the footsteps of Asian messaging apps we can expect this to expand to a variety of product payment or ordering options in the future.
2. Branded chat functionality
Brands have been started to interact with consumers via SnapChat over the past year, with branded stories, partnerships with social influencers, offers for loyal fans and more.
Facebook Messenger have just joined to party and have started testing “Businesses on Messenger” with a few brands in the US. This function allows brands to talk to customers directly and give customer service updates directly via the platform.
3. In-app ordering
Facebook Messenger are likely to aim to allow consumers to purchase directly via the platform in the future. WhatsApp has spoken of the possibility of expanding its message commerce offering but has not released any official plans as yet. Perhaps as it is owned by Facebook we could expect them to follow suit.
If these chat platforms follow the same route as the Asian chat platforms we could expect online to offline commerce to be the next step. Other services or partnerships could appear such as hailing a cab via Uber or getting food delivered from Deliveroo.