On the face of it, WeChat is just like any other chat platform. You download the WeChat app onto your mobile phone, register to use the service, and chat with any other subscriber of the service, just like Messenger, WhatsApp, or Telegram. Like other chat
apps you can also share files and photos. However, that is where the similarity ends. By registering for WeChat, you also sign up to an ecosystem that allows you to do much more: an ecosystem that enables a fully-fledged commerce functionality.
The key to the WeChat commerce ecosystem is the capability to pay for and purchase things. Today, you can buy food, hail cars, pay utility bills, and much more. The efficiency of the WeChat ecosystem is such that one can also pay for small items effectively.
WeChat effectively eliminated the need to have cash or credit cards. The functionality is ubiquitous in China, easy to use, and secure. As a matter of fact, WeChat is rolling out functionality to allow individuals to upload their ID documents and manage them
digitally. This is the absolute chat economy.
Even though WeChat tried and is still trying to export this ecosystem to the rest of the world – to the free world – it seems very difficult. Why is that and what is likely to emerge?
The only downside about WeChat is that it managed to build a critical mass in a closed environment. To use the functionality, all participants must be subscribers of the WeChat service. This is called a closed-loop system or often referred to as a walled
garden. And generally, there is a limit to how big these ecosystems grow. Absolute growth is inhibited by the need for free choice and competition. It is unlikely that WeChat would be able to do what it has done very successfully in China in the rest of the
world. What is needed is an ecosystem that is open and easy to integrate with. A system that is not controlled by one entity and where many players can compete on equal footing. These open systems usually emerge when all players start working and using open
standards to exchange information.
Open standards emerge in two ways: they emerge because many players instinctively start working in an open way – usually based on some underlaying concept (like open APIs for instance), or they get designed by industry bodies created by the players in the
ecosystem. Which will it be? Time will tell.