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The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.

Monday, September 2, 2013

China's Mobile Internet Messaging (IM) War, part 8: Quick Status after 2 weeks

It had been two weeks and it is still a hot topic in China. Today, I am going to do a quick status update on the popularity of China's Mobile Internet Messaging (IM) products.


This is part 8 of long series of articles on this subject. Part 7 of this article can be found here:

From the following two articles (both are in Chinese):

I will summarize the important point in the above two articles:
Both of these articles talk about Netease's YiChat:
After the first day, YiChat had 700k new users.
After the first 24 hours, YiChat had more than 1 million users.
After the first 3 days, YiChat had more than 5 million users.
The majority of the users are IT workers, white collar workers, and students.
27% of users coming from China Telecom, 27% of users are coming from China Unicom, and 46% of users coming from China Mobile.
The short term goal for YiChat is 100 million registered users and 50 million active users within 6 months.

Those numbers are many times faster than when Tencent's WeChat first accumulate its new users. Netease's YiChat certainly had much faster start than the product it is trying to replace (Tencent's WeChat).

From part 5 of this series, Sina's WeMeet was also launched to compete with both Netease's YiChat and Tencent's WeChat. Let's see how all three products are doing in the last month. The following chart are the number of searches on Baidu for all three products.

 Note that green curve is the number searches in China for Tencent's WeChat. The yellow curve is for Netease's YiChat and the blue curve is for Sina's WeMeet.

The actual number for today, 9/2/2013 (Baidu made a mistake, it mistakes 9/2/2013 for 10/2/2013), is as follows:
The number of searches for Tencent's WeChat is 72242.
The number of searches for Netease's YiChat is 11088.
The number of searches for Sina's WeMeet is 854.

Note that we are talking about number of searches. One can't directly convert that to number of new users. For Tencent's WeChat, it had an install base of 500 million users. I am certain the vast majority of the searches come from existing users (bug fix, re-intall, etc.). But for both Netease's YiChat and Sina's WeMeet, since both are brand new product with install base of zero, vast majority of the searches come from potential new users.

From the above chart, we can already make two observations:
First, Netease's YiChat is for real. It is becoming a real competitor to Tencent's WeChat. Second, unless Sina's WeMeet really picks up steam in the near future, it is already dead on arrival.

Tencent got almost half its revenue from gaming. Frankly, it has virtually no expertise in developing games. But all its games (virtually all of them are from foreign licensed games, many of those licensed games are junks that nobody wants to play outside of China) are guaranteed to be popular at least for awhile due to its free QQ (Internet instant messaging) and WeChat (Mobile instant messaging) services.

By promising free elite QQ (or WeChat) membership or QQ (or WeChat) emoticons for one month, if the gamer will just play Tencent's game, Tencent can guaranteed any of its games great popularity (at lease for the beginning). And for some games that are not half bad, once sufficient player base formed, it starts to get a life of its own and Tencent would have a hit game.

But this is an unique advantage only Tencent has. But if Netease's YiChat becomes a significant player, life is going to be miserable for Tencent.

Netease had demonstrated its ability to develop popular games. If Netease's YiChat becomes a major player. It would truly be the worst nightmare for Tencent.

Tencent already show the world how to use its free popular instant messaging products (QQ and WeChat) to push for gaming and other Internet Value added services, even though it is pretty bad in developing games. Could one imaging if a competitor also get a popular instant messaging product (YiChat), except in this case, the competitor is much better in developing games?


end.




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