Before the mobile OS and smartphones were full-fledged, applications on mobile were mostly migrations from desktop version or complementary access to existing online services. However, we believe contact-list-based multi-media instant messaging application has potential to become the killer app in the 3G mobile internet age, similar to what SMS has done in the 2G era. The apps feature intuitive UI that enable users to communicate in voice, pictures and video messages in real time with minimal data consumption. Recent exponential growth of Tencent Weixin, Xiaomi Miliao in China and KakaoTalk in Korea are triggering transformational changes in people’s daily communication.
Multi-media messaging could help people manage either “Strong Tie” or “Weak Tie” [See chart Below] types of relationships with its simplicity, instantaneity, and flexibility. With multiple features combined, it will marginalize traditional IM, text messages and voice mail to become the backbone application on smartphones.
Among all the multi-media instant messaging applications available on the market, we believe Tencent’s Weixin stands the best chance to gain dominance, further substantiating its existing franchise and customer stickiness. What makes Tencent so formidable in China internet space is not its size, but how the penguin can respond to latest trends and execute timely and decisively moves, despite its size.
Operators such as China Unicom and China Mobile also rolled out their own version of multi-media messaging applications, Woyou and Feiliao, respectively, to try to take a share in this emerging market.