Yesterday, I was reminded of a concept that’s actually a well-accepted truth in China tech circles, but is often abbreviated away by myself and others who have resided abroad, because it’s just so much easier to compare WeChat to Facebook than explain what it truly is, and that is … an address book 通讯录 + instant messenger 即时通讯. I’m taking a lot of points from this article (in Chinese), which was written earlier this year to make sense of the Clubhouse phenomenon, and then also adding my own thoughts.
First things first — here, we are defining a social network as a place where you can, well, you know, network, or, as Wikipedia says, “an online platform which people use to build social networks or social relationships with other people who share similar personal or career interests, activities, backgrounds or real-life connections.”
While it is true that WeChat does allow you to build new relationships (now that international travel is paused, I do all of my new BD on WeChat, of course), that’s a result of its natural flexibility, and not really its strength. Unlike Facebook, WeChat does not allow you to find new users easily (except for Shake). It does not allow you to discover existing social relationships easily (ie I cannot see second degree connections, nor even know which one of my first degree connections know each other, unless they happen to interact with each other in Moments). And any time they do open up a public identity, such as for the new video Channels, or the older Subscription Accounts, that is completely separated from one’s private identity, unlike on every other social network or media (ie you can follow someone’s private Facebook page by default). For a 1 billion user network, WeChat really isn’t much of a network at all, but an extremely private contact list. (It is true that you can get Facebook to function somewhat like WeChat by tweaking your privacy settings, but it is not commonly done, and that’s not the default around which everything is designed.)
If I had to explain it, it’s really most like your email + email contact list, except in an instant messaging format, with a lot more interactivity as well as context (because of the Moments feed, etc.), of course. So, for example, most people have a professional and a personal email address + list. Imagine that is collapsed into one. And you don’t use email to communicate but multimedia-rich instant messaging, with a world of plugins covering every function at your finger tips. And that’s kind of getting close to WeChat. But really, it’s only the first part of the sentence that’s important. WeChat has all of your private communications with every person you ever talked to, ever. How much is that worth to you? Probably a lot, right?
And probably more than any other public communications you have as well, because public communications are at least somewhat dependent on the platform. That is, the platform determines what you share and to whom you share. Public platforms are about building relationships, and private platforms like WeChat are about communications.
Put another way, you can have and are indeed likely to have activity and identity on multiple public platforms. Unless there is a structural reason — ie work vs personal email addresses, or your family is all on WhatsApp and not Signal — you are unlikely to want to switch or maintain multiple private communications. It’s why most of us don’t want to change our phone numbers or email addresses, but we are much more willing, should the appeal be great enough, to register for a new social platform, if only to lurk.
Facebook is not entirely public like a Twitter. But it is semipublic. WeChat, on the other hand, is as private as it gets. As I mentioned, you cannot see how many friends you share with me (unless you serendipitously see them post on my Moments), just like you cannot see who is in my email / phone contact list. You cannot see which groups I’m in, until you join those same groups. You cannot see which Subscription Accounts I follow, only that X of your friends follow it, nor what I’ve read, unless I actively click “Wow” on the article, which is different from an anonymous like. WeChat doesn’t even give you read receipts, which Allen famously decided against to protect the privacy of the recipient. Even vis-a-vis email, WeChat does a better job of keeping out spam by having not just a very strict opt-in feature for all subscriptions but actually physically limits the number of posts that can be delivered to you each day.
Obviously, private networks are much harder to grow than public ones, which offer so much more in the way of discovery and connection. But private networks, especially proprietary ones like WeChat with network effects, once established, are basically impossible to topple. Even interchangeable private communication services like email that don’t have network lock-in are much stickier than semipublic networks like Facebook, for example. If anything, you can always leave Facebook and communicate with your friends via email. And that is the power of WeChat.
I’m sure this is all very intuitive, but it’s sometimes really easy to forget especially when there are strong foes like ByteDance trying to overtake your business. Not saying ByteDance won’t ever succeed, but trying to win against WeChat’s core private communications product is fundamentally different from crushing Kuaishou, Weibo, Xiaohongshu, or any other public network. (There aren’t really any prominent semi-public networks in China, the closest might have been the beginnings of Weibo, before it became full-on social media.) That being said, the onslaught of competition means that WeChat’s share of the public sphere (ie Channels being the best example) may not be very large. But that’s the point anyway, right? There will always be multiple public networks … that much is obvious. In the right ecosystem and with the right timing (unlike in the US when there was too much lag between the rise of email vs instant messaging etc.), it’s very possible that there could just be one, overwhelming, dominant private network. And so while maybe semi & fully public networks have a set lifespan that could be roughly matched to generational gaps … WeChat may not. WeChat may be here until there is a new fundamental shift in communications technology, which was what gave birth to itself. So while ByteDance et al have a very low probability of beating WeChat, it must try, because its platforms are much more at risk of being displaced by the next new shiny thing. Until then, I’m long WeChat, and even more appreciative of Allen’s leadership, which is as prescient as ever. And I’d suggest that folks read less into the time spent on WeChat, and more on its GMV and ecosystem growth, as well as messages sent, all more important metrics for what is, at its core, a communication tool and not media platform.
PS BTW, some of you might remember that in 2019 Facebook made a big deal about how The Future is Private. So, it’s not like this is some unique insight. It’s just that Facebook has a different competitive landscape to navigate, and also of course a really large legacy business that is doing quite well that would certainly experience shocks if it were to really try to transition into more of the WeChat model, even if it could or should. There are always pros and cons to everything, and I believe that the cost WeChat pays for its longevity will ultimately be its “under-monetization,” (and vice versa for Facebook and its affiliates) which really isn’t necessarily “under,” as much as that private networks may always be less monetized than public ones, by their nature. I haven’t done any specific analysis on that, but I’m sure someone has. I’d love to hear about it if any of you have to something along those lines to share!
PPS I often also compare WeChat to WhatsApp, and I do believe they are much closer. I think you can also use the above framework to explain why WhatsApp is so sticky despite being, honestly speaking, a horrible product. WeChat is WhatsApp done right … it’s also, as some folks have said, private Facebook done right … either way you want to attack it, WeChat really understood what it was trying to do, and made the right decision over and over about public vs. private, and because of its coincidental timing with the rise of the mobile internet, which was a necessary although insufficient condition for its success … didn’t even have to give up anything in terms of growth, either! Just monetization. Still, amazing restraint on the part of Allen, and amazing wisdom on the part of Pony et al to go with Allen’s vision. I’d love to read a tell all book about that one day!
What are your thoughts?
