What is the greatest threat to WeChat?

The following article is a loosely adapted translation of this piece by Pu Fan and published by Sina Tech.

Over the past few years, there has been increasing concern about WeChat’s hegemonic position in China’s internet sphere. This discussion has recently flared up again, thanks to the January launch of three rival social apps that all seem to have flopped, mostly because sharing their links didn’t work smoothly through WeChat.

As part of this discussion some have wondered whether WeChat could be challenged. But the idea of what truly threatens WeChat is misunderstood.

One of the biggest misunderstandings in this debate is that WeChat is most threatened by the potential rise of a similar social app that sweeps in and steals its traffic. But there are two problems with this view.

First, traffic is not a zero-sum game. More than one product can have traffic, so what really matters is not the traffic but the relative positioning of the products.

Chinese smartphone users on the subway. Photo credit: Pedro Serapio

Second, WeChat’s traffic flow comes mostly from its ability to capture traffic from other sources, and this intra-app ecosystem is WeChat’s greatest resource.

This is why new social apps have had such a limited impact on WeChat. A successful competitor app would need to actively create points of differentiation, and avoid competition to the extent that it’s possible.

Chewing the cud

In fact, the greatest threat to WeChat is really WeChat itself. WeChat creator Allen Zhang touched on this himself in a recent speech, saying, “Our attitude toward users must be one of kindness, not simply one of routine.” The chance that WeChat could lose its friendly relationship with its users and flame out seems a larger risk than that it could miss KPIs due to competition from a similar app.

The other risk is that WeChat could fall victim to what British ecologist Garrett Hardin called the “tragedy of the commons”.

In what’s now a well-established social science concept, Hardin wrote in 1968 about over-grazing on public lands, pointing out that while each animal added to the herd increased profits in the short term, it also increased the burden on the available grasslands. If a dozen sheep are grazing on acres, there’s plenty of food left over if a patch goes bad or dries up. But if hundreds too many are grazing in the same area, they can exceed its capacity for support.

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It is not difficult to imagine that WeChat, with its billion-person userbase, could one day see its own internal ecosystem buckle under the strain of its traffic. And people are forgetting that the precondition of being a “WeChat god” is that its functionality as a tool is intact. In short, breaking WeChat’s rules is becoming a kind of industry skill, one that people have embraced with great skill due to the WeChat ecosystem’s tremendous power.

But WeChat is not the commons, although it is being over-exploited as though it was. In the end, that may be the greatest threat to WeChat.