A scramble to get a piece of the action in the booming African market is being made by WeChat, China’s biggest Internet-based mobile messaging platform even though it is late to the party.
As Facebook’s WhatsApp is already part of the social media fabric in most African countries, the move is leading the South Africa-China joint venture down a fiercely competitive path.
The outcome could help determine who can turn the exponential growth in online messaging services into profits even though Africa is not often the scene of battles between tech giants.
As WhatsApp is used far more widely, making users naturally reluctant to choose a rival service, WeChat stands at a major disadvantage.
Its experience in selling products to lower income users in the villages of China and an array of services that include money transfers, prepaid electricity and airtime purchases are the two factors that WeChat is betting on to loosen the Silicon Valley grip.
“That’s at the heart of the story for us because we knew that we were late to the market compared to other instant messaging apps and so we realized that focusing on chat services was not the most practical way to get to market,” WeChat Africa head Brett Loubser said.
WeChat Africa is a rare south-south corporate partnership to expand on the continent and was launched in Africa in 2013 by China’s Internet giant Tencent and its 34 percent shareholder South African e-commerce and media group Naspers.
The adoption of WhatsApp in big African markets such as South Africa was lightening-fast because texts over a phone network are still expensive and it offers free text, picture and video messages makes it an uphill task for the joint venture.
WhatsApp had just over 10 million users in South Africa compared with just over 5 million for WeChat, shows a 2015 study by World Wide Worx, a Johannesburg consultancy.
WhatsApp has no immediate plans to make money out of the service in Africa, said Facebook Africa head Nunu Ntshingila. WhatsApp was acquired by Facebook in 2014 for $19 billion and which has a long-standing promise to keep the platform ad-free.
“At this point in time, we are not at the stage where we are looking at monetizing WhatsApp. That’s in a three-year time frame because right now the focus is on two big apps which are Facebook and Messenger,” Ntshingila said.
Analysts believe that as and when it turns on the monetization tap, WhatsApp can easily leverage its popularity on the continent given Facebook’s deep pockets. WhatsApp is the No.1 messaging platform in South Africa, Nigeria and Kenya, Ntshingila said.
“You could argue that WeChat is pulling ahead in monetization efforts but WhatsApp guys can do anything using their numbers. It’s all about who’s got numbers,” ICT analyst Sibonginkosi Nyanga at fund manager Momentum SP Reid said.
In January when WhatsApp announced it is dropping its token $1 fee levied on some of its users, its Chief Executive Jan Koum said that the company is testing making restaurants, airlines and credit card firms pay to contact consumers.
(Adapted from Reuters)









