How Asia’s messaging apps will blossom as mobile platforms

September 17, 2013 Leave a comment

How Asia’s messaging apps will blossom as mobile platforms

September 17, 2013

by Joshua Kevin

Joshua Kevin is a former blogger at Tech in Asia and former community manager at KakaoTalk Indonesia. Now, he’s working on his own startup which he hopes to have fully launched early next year. You can follow him on Twitter, @jshkvn. The views expressed are his own and are not related to KakaoTalk in any way.

There has been a lot of debate about how messaging apps, especially those from Asia. Line, KakaoTalk, and WeChat are going to rule the world, starting from their own region or country, then expanding. While it’s still early days for these apps, I want to talk about something that’s often mis-interpreted: stickers. Yes, those huge, animated stickers/emoticons were started by KakaoTalk and Line, then WeChat followed, and then even western companies such as Path and Facebook followed the trend. This has made tech blogs and the media, in general, go crazy about how stickers are going to set the social media world on fire and make tons of money for these companies. Yes, they’ll bring in some cash, but they won’t be the main source of income.The importance of social gaming

Talking from my experience, stickers are just a tiny bit of income generation. The cutesy stickers are useful for people to communicate easily, and of course they add a fun factor into the chatting experience. Some users do buy sticker packs (Line got $17 million on stickers alone) plus brands can alsouse this channel as a way to reach out to users. But there is a bigger plan going on here.

We all know about SaaS or PaaS – software or platforms as a service. But what about ‘Messenger as a Platform’? Yes, this is gonna be the grand plan of each company with a chat app. When you have users, you can practically do anything on top of your platform. First checkbox: games. That is the most logical extension to be built on top of a messenger platform. Games + social effect + in-app purchases = $$$. Proof? KakaoTalk is the main distributor/publisher in Korea with a number of games in the top 10, with a collective $311 million in revenue

Line is doing exactly the same with its revenue from in-app game purchases already topping 53 percentand we are likely to see that increase a lot more with Line selling prepaid cards in Japan and Taiwan. Even WeChat, who at first seemed to be reluctant to bring games to its 300 million users, brought social gaming into its recent v5.0 update. WeChat maker Tencent is rumoured to have an office in Seoul to outsource or build games for its users. Reasons? People love playing games on their smartphone, and when you add leaderboards and social features, these games will go viral, hence making a lot more money than just selling sticker packs.

Shopping via chat apps?

Another future source of primary income is m-commerce. How? KakaoTalk has been experimenting with this option in a few ways. It has already sold products through the Kakao Gift feature, wherein you can buy a coffee for your friend in Starbucks, for example, without actually have to go to the shop. You can buy through the KakaoTalk app, plain and simple. Though it’s only available in Korea for now, it will expand soon to other countries, perhaps to Malaysia first. Rivals Line and WeChat look set to do the same thing.

We can look forward to some interesting years ahead for these messaging apps. I’m looking forward especially to the competition in emerging markets like Indonesia. So far, I think WhatsApp is still leading the way across much of Asia (excluding China) since it’s a simpler messaging app which is a natural replacement for SMS. For those in Blackberry-loving countries, there’s BBM, which appears to be used more by professionals and a more mature audience for whom stickers are not an attraction. In various other nations, it’s a battle between Line, WeChat, and KakaoTalk for dominance in individual countries. Yet, the same question remains: Will it be one winner that takes all the market, or can Asia’s diverse nations allow more than one messaging app to survive and actually make a profit out of their users?

Filed under TMT Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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