China's Mobile Internet Messaging (IM) War, part 11: the battle is heating up

This is part 11 in this series. One can find the previous part (part 10) in this series here:

part 10 here

I am still keeping track of the weekly download statistics. The pattern I observed in part 10 is still valid. That is Netease/CHA (China Telecom)'s YiChat is still growing like crazy. Alibaba's LaiWang is a very strong grower. Sina's WeMeet is dying in front of our eyes.

In addition, there are two other new players that are getting into this space. One is from Shanda and another from a big retailer. But so far those two new players are not catching any traction at all.

Both Alibaba's LaiWang and Netease's YiChat had/will have major announcement. But first, some users statistics:

From the following article:

YiChat's super fast growth (in Chinese)

Netease's YiChat had already accumulated more than 30 million users. In addition, its user base are increased by 200k per day. Of all users accounts, 28% of them are daily Active account users. Thus, about 30*0.28 = 8.4 million users are using YiChat every day.

Considering YiChat starts operation on 8/19/2013, it is able to accomplish this feat in less than 2.5 months. I had never heard of any social networking product that are able to grow this fast out of the starting gate, anywhere.

But Alibaba is going all out for its LaiWang product. From the following article:

Alibaba is going all in (in Chinese)

Alibaba is offering all LaiWang users of free mobile data traffic cost for users in 4 major provinces. This trial will last 2 months for now. Alibaba would also likely to expand this free service.

Not to be outdone, Netease had just announced that it will have a major announcement on 11/8/2013. From the following articles:

Netease's major announcement (in Chinese)

(in Chinese)

(in Chinese)

The detail is still a little unclear. But it looks like CHA/Netease will expand the free data service offer for its YiChat users not just to all CHA users, but all users in China. It will also covers users from China Unicom (CHU) and China Mobile (CHL) users.

Of course, the cost of these free service is so large that is so far beyond what Netease can afford. Most likely, Netease is just alone for a free ride. Either the cost will come from CHA (China Telecom) or China Unicom and China Mobile will become partners of YiChat. We will find out more details on 11/8/2013.

end

China's Mobile Internet Messaging (IM) War, part 10: YiChat vs. LaiWang vs. WeMeet

This is part 10 in this series. One can find the previous part in this series here:

Part 9 here

This is going to be a quick update on the status of three new players in China's Mobile Internet Messaging war.

Netease and China Telecom's love child, YiChat had been out for about 6 to 7 weeks now.

NTES and CHA had spent a lot of money on marketing the first day of the launch. But interestingly, I don't see any more marketing on any of the popular web sites after the first day. But YiChat had been in the news non-stop because it is a product of a monopolistic like state own company and a highly competitive private company. Thus, YiChat had been getting free marketing after the first day of launch.

At about the same time, Sina come out with their new product, WeMeet. Except for the first week, I don't see any more marketing. There is also not that many news articles about WeMeet.

Not to be out done, China's internet and E-commerce giant, Alibaba, also comes out with its own mobile internet messaging product, called LaiWang. Alibaba had done very aggressive marketing on all of China popular web sites for LaiWang.

I want to know how are these three products doing. In part 8 of this series of articles, I had used Baidu searches to get a measure of how popular these services are.

Baidu Search statistics

But I don't think Baidu search directly translates to the popularity of these products (there is an indirect relationship, but I want a more direct and more correct measurement).

I believe the total numbers of downloads shall be a more correct measurement. To do that, I used some of the most popular download sites. Unfortunately, some of the most popular download site don't provide download statistics.

I used 4 of the most popular download sites that do provide download statistics. Taken all together, they represents about 1/4 to 1/5 of total downloads. These four sites are:

91 Android

360 ZhuShou

AppChina

WanDouJia

Adding the total download per week, I got the total number of weekly downloads from the four sites. The respective numbers for Netease's YiChat, Sina's WeMeet, and Alibaba's LaiWang is as follows:

Weekly Download Total	YiChat	WeMeet	LaiWang
8/30/2013	1660572	27888
9/6/2013	572497	2668
9/13/2013	653619	1823
9/20/2013	465007	1154
9/27/2013	613850	727	146928
10/4/2013	965452	505	71941

Again, the number here is not the absolute total number of downloads. It probably represents about 1/4 or 1/5 of total downloads. But the error will be the same for all products I tracked. Thus, it might not be great in predicting absolute number, but it shall be very good in comparison of different products as well as tracking the growth of a single product at different time.

From the above table, YiChat had a great beginning. It begins tapers about one month after the official launch. But after that, it had caught a second wind and is starting to grow again.

Sina's WeMeet had a horrible start. It is dying even faster. It is suffering a horrendous death.

Alibaba's LaiWang starts strong. Please don't compare to the start of Netease's YiChat. I had never seen a product starts so strong as I saw YiChat. It will be absolutely unfair for any product to compare to the original start of YiChat. None of the three major social networking products (Sina's Weibo, Tencent's QQ, and Tencent's WeChat) had a start anywhere close to the start of YiChat.

If we don't compare to YiChat, Alibaba's LaiWang actually had a very strong start. At this point, it is still way too early to say how good LaiWang will do. But I do know that Alibaba is sparing no expanse in promoting this product.

At this point, it appears that YiChat will be, at a minimal, at second place to Tencent's WeChat in China mobile internet messaging application. Again, as I mentioned multiple times previously, the best thing for YiChat is not to be second place in mobile IM application. It is different enough that it could create a brand new product that combine internet, mobile, off-line home phone, SMS (Short Messaging Service), and VOIP (Voice Over IP) into one giant social network.

For Sina's WeMeet and Alibaba's LaiWang, they have to compete in the mobile IM. They don't have  off-line telephone, SMS, and VOIP capability, nor will they ever have (unless one of China's 3 telecom becomes their sugar daddy). They have to compete with WeChat head-on. Of the two, WeMeet is dying in front of our eyes. But LaiWang has a very promising start.

I will provide another update on this in another couple of months.

end.

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:

Part 7 here

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

Article one (in Chinese)

Article 2 (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.

China's Mobile Internet Messaging (IM) War, part 6, Netease's YiChat Update

China's Mobile IM is white hot right now. But the development of cooperation between Netease and China Telecomm represents something even bigger. This development had captivated the attention of China (even for those who have no intention of ever using mobile IM).

Part 5 of this series can be found here:

Part 5 is on Sina's new entry

YiChat is for real!

Both China Telecom and Netease are devoting true and significant resources on YiChat. It is clear that, from the amount of new customers, the freebies from China Telecom is not going to be just from spare capacity. China Telecom is taking up real resources to give YiChat users free Short Messaging Services, free Mobile Bandwidth, etc.

For Netease, its technical excellence is shining through.

After the first day of YiChat, there are signicant complaints from Chinese users. The two biggest complaints are people can't register and SMS messages take a long time to deliver.

It is clear it is largely a capacity problem. Netease and China Telecom didn't anticipate the amount of user adoption.

The biggest YiChat tester is none other than CEO of Netease itself:

Netease's CEO's YiChat page (in Chinese)

From the following images, it is clear the CEO of Netease is testing the YiChat:

Above is Netease CEO's YiChat account. Where he is doing his accounting of his YiChat usage experience. "Too many people, we were not prepared...". "Machine crashed..." A big Yellow "SORRY" sign with an emoticon show he kneel down on all four begging for forgiveness. "Emergency Capacity expansion."

One can follow his account. It is easy to see he is testing YiChat's service all day and all night.

Netease's CEO is a serious person. He is an engineer by heart and can be obnoxious toward people in finance or budgeting. For him to use that emoticon to apologize to YiChat users. Even though it is through an emoticon, it is clear he felt a little humiliated and he is putting his personal prestige in this product.

Netease's vaulted technical team are doing double or triple shift. Within 3 days of launching the product, 3 updates had been generated to eliminate all the software bugs that came up. See the following images:

As of Friday (4 days after the launch), YiChat had already gone from v1.0 to v1.0.1 to v1.0.2 to 1.0.3. With each version update, significant bugs had been squashed.

At this point, it is clear that YiChat is real. Both China Telecom and Netease are sparing no resource for it.

China Telecom is devoting whatever resource to give Chinese users free stuff while Netease's technical team is delivered its end of bargain.

Netease's CEO can be hard to get alone with (he used to like to snicker at Wall Street analysts). But he is an engineer in nature and he build his company devoted to be excellent in engineering. I always thought Netease is number 1 by far in excellence in engineering in China's internet sector. So far, Netease is delivering.

Finally, this story had create something more than just YiChat alone. This thing had create a life of its own. The story had becomes whether a new model had been created. A model that one day may breaks down China's state dominated market economic system.

This story had just becoming a lot more interesting than just China's Mobile IM market.

end.

China's Mobile Internet Messaging (IM) War, part 5, Sina's WeMeet

China Mobile IM battle field is white hot right now. There are shattering news every few days now. My last update is on Netease's YiChat, see the following:

Part 4, quick update on Netease's YiChat

Today, Sina is announcing it is launching its own version of Mobile IM application, WeMeet. See the following:

Sina's WeMeet (in Chinese)

Quick observations from this announcement:

1. WeMeet is certainly a catchy name. Except it is catchy for English speakers. WeMeet actually sounds like "Micro-Rice" in Chinese. Sina needs to learn some basic marketing. Needs to know your audience. WeMeet is developed for Chinese (not English speaking customers). I am certain Sina can find another more catchy name for their product.

2. It is integrated with Weibo. I think this is the calling card for this application. If it has any chance of being popular, this is it.

3. Feature wise, it is not impressive at all. It didn't have any features of importance that current dominant application (Tencent's WeChat) doesn't have. Compared to Netease's YiChat that has quite a few significant features that are clearly superior to Tencent's WeChat.

4. It also didn't get a tie up with a telecom service provider unlike that of Netease's YiChat tie-up with China Telecom. Customers will not get any freebies from any of China's big three telecom service providers.

5. The application itself was not developed by Sina itself. The company that develops this product has some investment from Sina. It is not clear at this point whether this company is majority owned by Sina. For almost all cases, it would be a bad arrangement. Integration and inter-office politics usually doom those type of arrangement.

But for this case, I think it is good. Sina is terrible in developing technologies. Its own inter-departmental politics are terrible.

This new company will encounter significant resistance from Sina's many departments. But it is still a better arrangement than having Sina does it itself.

For me, I would rather have a company that I never heard of to develops a new technology product than having Sina itself develops it.

6. The timing is terrible. At this point, everybody is talking about Tencent's and China Telecoms' YiChat. It represents a truly significant event not just in China internet industry, but it is significant in China's overall economic development. It is a first time that a Chinese state own monopoly (China Telecom) cooperates with a private industry (Netease) and giving all execution power to that private company.

For Sina's announcement, it only has average Chinese customers' attention for a few hours. Vast majority of Chinese is much more interested in how the Netease/China Telcomm venture works out. Even those who don't care about Mobile IM products, they pay attention to Netease/China Telecomm venture because it represent a monopoly deliberately giving up power, a truly rare event.

I guess for Sina to pick this horrible timing, they are probably stuck between a rock and hard place. For Sina, now is the least worst.

In summary, under normal circumstances, Sina's WeMeet would represent the most formidable competitor Tencent's WeChat would face.

But this is not normal circumstance. Next, I would give another quick update on Netease's YiChat development.