Chat apps set to disrupt the mobile app store

Neha Dharia/Ovum

OvumIn January 2017, WeChat announced the introduction of mini programs on its chat app platform. These mini programs enable WeChat users to experiment and use apps on the platform without having to first download them – as per the traditional smartphone experience. The apps are essentially light cloud-based versions, which are quick to develop and launch. Users must then download the app to get access to the full features. Popular Chinese internet services such as JD.com and Didi have already launched mini programs on WeChat.

The mini app breaks down the barrier of having to download an app before being able to use it, which is especially useful for users in emerging markets where mobile data is still expensive and used in a metered fashion. With this strategy, WeChat is clearly aiming to provide an alternative to the mobile app store, as users first experiment with and then download their apps directly from their messaging platform. As of now, WeChat has not announced the launch of a store for its mini programs, but Ovum expects this to be a longer-term strategy depending on the uptake of mini programs on the chat app.

WeChat has been working closely with content and service partners since the very beginning to ensure its growth beyond a chat app to a mobile media and services platform. The ability to use other partner services such as e-commerce, games, music streaming, or even financial services like investments encourages the use of WeChat communications services for business-to-consumer use. The option for users to then opt in or "follow" a business provides the unique ability for users to create a custom platform based on their own preferences.

Engaging with brands and services is a trend that is not isolated to WeChat – other chat apps are also on the path to the platform model. Facebook Messenger has already launched over 30,000 bots that enable a light chat-app-like experience on the Messenger service, and users can also pay for services such as Uber from within the Messenger app. Similarly, WhatsApp has plans to open its APIs to businesses, which will allow consumers to engage with businesses directly on the app, following a slightly different model than WeChat and Facebook Messenger.

WhatsApp, WeChat, and Facebook Messenger together account for more than 3 billion monthly active users (MAUs), and Ovum estimates that their combined MAUs will cross 6 billion by the end of 2019. Ovum is also seeing a rapid increase in OTT communications service usage, with chat apps crossing 61.8 trillion messages and 2.5 trillion OTT mobile VoIP minutes by the end of 2019.

We can already see growth in the use of media and services on chat apps with the popularity of services such as Snapchat, with over 40% of adults aged 18–35 using the app every day in the US. The growth of video services on chat apps will encourage users to interact more with media and brands on the platform and will slowly pave the way for users to do more with the brands on the app than watch videos.

Given the sheer size of the user base and high level of engagement, chat apps – if successful with the mini-program strategy – could prove to be a formidable force and disrupt the status quo of app stores.

Neha Dharia is Ovum’s senior analyst specializing in service providers sector. For more information, visit www.ovum.com

 

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