WeChat execs raise strategy concerns on potential exit of Allen Zhang

This article is co-written by Iris Deng.

WeChat head Allen Zhang Xiaolong used to approve every change to Tencent’s flagship social media app, down to the colors and fonts.

But, as WeChat surpasses 1 billion users and plays host to more than 1 million mini-apps on its ecosystem, operations have finally become too big for him to oversee everything.

How to stay agile and nimble in a rapidly changing social media landscape with a top-down approach for a 2,000-strong team, and what happens to strategy should Zhang one day leave or step back, were among the top issues on the minds of WeChat executives as the app enjoys its perch as China’s most dominant super-app.

These discussions, gleaned from interviews by the London Business School for a business case study and in written comments provided to the South China Morning Post, offer a rare glimpse into the inner workings of a unit that dominates the country’s social media scene.

“I admit I am very dictatorial,” Zhang, 49, told the London Business School for its case study. “There are many products that are very democratic, but if there are many leaders giving their thoughts, then there is no spirit to the product and the product fragments,” he said. “A product needs to have a strong identity in order to have everything in coherence.”

Started as a messaging tool in 2011, WeChat has become an indispensable tool for many of its users who rely on it for everything from paying bills to reading news, playing games, and ordering meals. At its core is an apps-within-an-app concept that allows users to meet most of their online needs without leaving the main app, a model that has since been copied not just in China but in Southeast Asia and, increasingly, in the West.

But, with 1.1 billion accounts for an estimated 829 million internet users in China, WeChat has hit saturation point. And for all its success, WeChat remains little known or used outside the country apart from overseas Chinese students, expatriates, and the Chinese diaspora.

At home in China, many social media startups have tried to take on the king.

Among them, ByteDance, the world’s most valuable startup backed by Japan’s SoftBank, has been the best-resourced. It has been challenging WeChat with its Toutiao news app Douyin (known as TikTok outside China) short-video app, and also more recently with Duoshan, a video-based social messaging app. Tencent has been alarmed enough to block users from opening links to some of ByteDance’s products within its WeChat app, prompting accusations that Tencent was engaging in monopolistic behavior.

WeChat’s ascendance can be traced to its birth at a time when smartphone ownership among Chinese consumers began to hit critical mass. At that time, QQ, another Tencent product, was the dominant messaging tool in China, developed for personal computers.

Pony Ma Huateng, cofounder and chairman of Tencent, had sensed the challenges posed by mobile-first services and gave Allen Zhang permission to set up a team to develop a mobile messaging tool.

Under Zhang, the WeChat team experimented with many different features, especially those that worked uniquely well on mobile phones, such as voice messaging and virtual red packets (a Chinese gifting tradition). They also created mini-programs, which are mini-apps that can load within the main WeChat app without requiring separate downloads from an app store.