How do WeChat and Facebook’s marketing strategies differ? We’ll look at this question in two steps.
- Part 1: how did Instagram, Facebook and WeChat get where they are today?
- Part 2: what are they doing today in order to maintain their momentum?
Part 1: Origin stories, how did Instagram, Facebook and WeChat get their first followers?
Facebook origins
The Facebook story might be the best documented through David Fincher’s movie The Social Network.
Although the movie was criticized by Mark Zuckerberg as misrepresenting the early intent of the Facebook team, it highlighted one thing: Facebook first grew in a selective way by focusing on universities and forcing users to sign-up with their .edu e-mail address.
This strategy had several advantages:
- It enabled Facebook to grow in a controlled way by progressively “unlocking” universities from which users could sign-up
- Using university e-mails forced a “real name” policy, while other social networks around the world were plagued with fake and anonymous accounts. This culture remained core to the Facebook spirit to this day.
- The progressive roll-out created a feeling of expectation among users, as they waited for their university to become part of the network.
In a recent Quora answer (later published as an article on Forbes), Andy Johns, Former Product Manager of Growth at Facebook, described the inner workings of the “Growth team” which helped take Facebook to 500 million users.
Andy breaks down the growth strategy of Facebook in N parts:
- Tactics. “test, optimize, rinse, and repeat”: Facebook leveraged all potential tricks in the book in order to take a complex, data-driven approach to growing users by extensive testing
- Hiring. Andy describes the team leader Chamath Palihapitiya as a pivotal aspect to Facebook’s growth success
- Strategy. Facebook had a clear process aimed at getting as many users through the door, retain them, and bring them back in the funnel in case they dropped-out. The company therefore performed a series of moves, including acquisitions, which would support this mechanism.
- Culture and Priorities. Everything from the office decoration to the way people interacted was inducing a very aggressive growth strategy and risk-taking approach.
In summary, it is not one move but a series of good hires and decisions which led Facebook to its explosive growth, with a few brilliant ideas on the way which might have been game-changing as to the ultimate success of the company.
WeChat origins
Unlike Facebook, WeChat wasn’t founded in a dorm room by college students. WeChat was created by the Chinese Internet behemoth Tencent. In fact, while WeChat was being developed in 2010, Tencent properties already neared 600 million users.
Tencent’s flagship product at the time was QQ (QQ own’s origin story dates from the late 90’s when Tencent’s CEO Pony Ma was trying to develop a chat software to be licensed to telecom companies) and QQ gave an impressive amount of traction to WeChat.
Early WeChat users could leverage their QQ address book to invite friends. This gave tremendous momentum to WeChat, which was at the time the first mobile-only chat APP in China.
What was the next step for WeChat? Adding features. Fast. WeChat released an impressive number of features during their first year of existence:
- Ability to send video clips
- “Find nearby” function. This feature had a powerful “buzz” factor has it was mostly used, in its early days, as a substitute to a dating APP (dedicated APP’s such as Momo and later Tantan didn’t have much traction back in these days)
- WeChat “moments” functions, equivalent to Facebook timeline
- … quickly followed by numerous other features including (but not limited to) booking flights, trains, payments, loyalty cards, voice calls, company accounts.
This quick release of enticing features, added to the initial momentum provided by QQ, enabled WeChat to get its first 100 million users in only 14 months.
Instagram origins
The origin story of Instagram has been described in detail by Kevin Systrom in this Quora question which was later turned into the infographic bellow.
Part 2: taking it to the next step: how are Facebook and WeChat approaching growth today?
Facebook and WeChat, have today fundamentally different marketing strategies which reflect the very different contexts in which they operate.
Both companies have been pursuing two forms of growth:
- Horizontal growth: growth in the same market, gaining market share and achieving geographical expansion
- Vertical growth: growth in new markets and product lines
WeChat marketing strategies
1 – WeChat horizontal growth strategy
WeChat horizontal growth is extremely challenging. With over 650 million users, the APP pretty much saturated its native market.
Tencent tried to promote WeChat abroad through several strategies:
- Endorsement by superstars such as the football player Lionel Messi
- Partnership with local companies such as Food Panda, Lazada and Easy Taxi accross South East Asia
- Integration with local medias such as the radio show from in South Africa
- Large marketing investment in advertising
These strategies have so far proven largely unsuccessful, and after an initial show of interest, the popularity of WeChat abroad has plummeted.
As of today, WeChat’s horizontal growth strategy can be considered a failure.
2 – WeChat vertical growth strategy
WeChat vertical growth approach is, by contrast, extremely successful.
The application has diversified its revenue sources and made investments in such areas as:
- Online payments
- Financial services
- In-APP game purchases
- Online advertising
- Taxi orders
- P2P lending
- Food delivery
The cornerstone of this growth strategy is WeChat payment. Tencent has been aggressively pushing its payment solution since its launch in August 2013.
One of the killer strategies for promoting WeChat payment has been the use of “digital red envelopes”.
It is an old Chinese tradition to swap red envelopes containing money during Chinese New Year. WeChat made this process digital by enabling Chinese users to send money through their payment solution, and the campaign proved to be a huge success: over 8 billion digital red envelopes were sent through WeChat during Chinese New Year 2016 alone.
In parallel to pushing WeChat payment, Tencent has conducted a very aggressive investment and acquisition strategy, targeting start-ups in domains related to its core domain, or other major Internet giants (Tencent holds a 15% stake in Chinese e-commerce giant JingDong, and purchased a 20% stake in the APP DianPing which was tightly integrated with WeChat).
Facebook growth strategy
1 – Facebook horizontal growth strategy
Facebook exists in an entirely different context from WeChat. Facebook already accounts for more 1.5 billion users… but there are 7 billion people in the world (5.5 billion of which don’t live in China). That’s a tremendous potential for growth.
The path for horizontal growth for Facebook is therefore not so much about winning market share against competitor as it is about getting more users online. Hence the Internet.org initiative which aims at giving everyone (especially in developing countries) access to Internet.
2 – Facebook vertical growth strategy
Facebook is much more focused than Tencent. There a few areas in which Facebook is heavily investing:
- Messaging with the acquisition of Whatsapp, the attempt to purchase SnapChat, the acquisition of Instagram
- Virtual Reality with the acquisition of Oculus Rift and partnerships with Samsung
- Artificial Intelligence (which cuts across al the domain of Facebook), with internal development and open-sourcing of libraries such as Torch
Some of the elements of vertical growth from Facebook also involve a deeper integration of business operations within the platform. From this perspective, Facebook is taking a deep inspiration from WeChat: trying to make its messenger application a place for customers to connect with companies (with the release of the new “Facebook for Business” features).
To a large extent, the two companies, albeit deeply different, share some common goals. They reach them at different pace. And therefore learn from each other, inspire each other, and move forward isolated into their specific ecosystem and yet with a sense of a common purpose.