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 also use 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 percent and 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?
(Editing by Steven Millward and Anh-Minh Do)