Upsetting the app cart: Asian messaging services challenge mobile order
(Reuters) - Asian chat services KakaoTalk, LINE and WeChat threaten to overturn the mobile order of things, usurping the role of Google Inc, Apple Inc, Amazon.com Inc, Facebook Inc and telecoms carriers as gatekeeper to the consumer.
Context & Ripple Effects
The ground for this story was laid over the preceding year. AllThingsD reported in November 2013 on WeChat turning its chat app into an e-commerce channel, urging American rivals like Snapchat to take notes, while back in May 2013 Apple forced LINE to strip virtual-item gifting out of its iOS app — an early skirmish over who controls transactions inside a chat client.
Reuters' framing ties those threads together: KakaoTalk expects roughly $200 million in revenue for 2013 and reaches 93% of South Korean smartphone owners, while WeChat counts more than 270 million users and is expanding abroad. The claim that these services could displace Google, Apple, Amazon, Facebook and carriers as the consumer's gatekeeper is no longer hypothetical — the money and usage are there.
First-order effects
- KakaoTalk, LINE and WeChat now own the consumer relationship in their home markets, meaning discovery, payments and brand access increasingly flow through their platforms rather than carrier portals or app-store front pages.
- Platform incumbents face a direct revenue threat: chat clients that sell stickers, games and goods inside the conversation bypass the store-commission and ad models that fund Google, Apple and Facebook.
Second-order effects
- Apple has already shown its counter-lever — removing LINE's virtual-gifting feature from iOS in 2013 — so expect tighter store rules and commission enforcement wherever chat-app commerce scales on controlled platforms.
- Western players feel forced to respond in kind: commentary at the time pressed Snapchat and other US messaging services to copy WeChat's e-commerce playbook, pushing Facebook and peers toward platform features inside chat.
Third-order effects
- If chat apps consolidate into the primary transaction layer, the operating system and app store risk becoming commodity plumbing beneath them — shifting gatekeeper power up the stack to whoever owns the conversation.
- That migration would also drag regulators and governments into the picture, since controlling a national communication-and-commerce hub becomes a matter of state interest as well as market competition.
The trend: Messaging apps are graduating from communication utilities into distribution platforms that interpose themselves between consumers and the operating systems, stores and carriers beneath them.