Will Chinese super apps succeed in the West?

In many ways, the Chinese tech scene was sort of a parallel world that flourished in isolation from the West. But as of late, some Chinese tech companies have been looking to expand their services into North America and Europe.
WeChat, Weibo and QQ are some of the most popular social apps in China (BBC)
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The United States has always held the top spot in technology and innovation thanks to Silicon Valley. But in recent years, China has been catching up.

Last year, China produced 22 new 'unicorns', or companies with a valuation of more than $1 billion. That's second only to 24 in the United States.

"It's less about the origin of the app and more about if they offer universal value to the people who are using it" - Kevin Wei Wang

In many ways, the Chinese tech scene was a sort of parallel world that flourished in isolation from the West with products made for the Chinese consumer. But as of late, some Chinese tech companies have been looking to expand their services into North America and Europe.

China's super app: WeChat

WeChat, owned by China's tech giant Tencent, is a hugely successful social app with close to a billion users, but it's not very well known in North America.

It's a good example of the Chinese approach to digital consumer tech, and given its wild success in China and strong presence within the Chinese communities here in North America, we wonder if WeChat and other Chinese services could also go big in the West.   

Kevin Wei Wang is senior partner at McKinsey's Hong Kong office and the leader of digital practice for Greater China (McKinsey)

Similar to WhatsApp and Facebook Messenger, WeChat is primarily a messaging service. Users can send messages via text or voice, and video chat on the platform. WeChat Moment is another one of its prominent features; similar to Facebook Wall, users can post content on their personal pages.

Kevin Wei Wang is senior partner at McKinsey and Company's Hong Kong office and the leader of digital practice for Greater China.

Beyond its social features, Wang said WeChat can also facilitate mobile payment and is connected to a swath of online-offline services such as ride-sharing. 

"It's a mega app with multiple functions," said Wang. Chinese users can pay bills, order food and transfer money to friends and family all in one app.

Chinese tech firms go West

The success of apps like WeChat prompts the question: why haven't they taken off outside of China? After all, Facebook has users from all over the world.

Wang attributes it to the fierce competition between the major internet players in China. "There's a lot of tension around winning in China even when these apps become well-known." Thus, Chinese tech giants are mostly focused on the home market.

It's also difficult to transfer Chinese products to a new market given the differences in culture and user behaviour, he pointed out. Additionally, native social apps like WhatsApp enjoy the 'first-mover' advantage, which makes it tough for foreign players to break into the market.

Last year, Chinese bike-sharing giant Mobike launched in the US capital, bringing its "dockless" system which has swept China and is used in some 180 cities worldwide. (AFP/Getty Images)

Despite the circumstances, a number of Chinese tech companies are planning to move into Western markets. Ride-sharing company Didi intends to go head to head with Uber in Mexico, and last year, bike-sharing company Mobike launched in Washington D.C., following expansions into Singapore, U.K. and Japan.

As these companies set their sights abroad, Wang says their biggest challenge lies in dealing with local regulations.

"China took a very relaxed approach to let these innovations grow first before they started to regulate," he explained. "But if they're expanding into Western countries, they'd have to deal with local regulations."

It would take some time to tailor Chinese products to meet local demands, according to Wang, but that's something that internet players in China will need to learn to do, he said.

The good news is that Chinese products have a good chance of succeeding abroad if they can provide real value to local users, said Wang.

"It's less about the origin of the app and more about if they offer universal value to the people who are using it."

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