Asia drives Uber, Facebook to enhanced messengers

Popular Asian message apps like WeChat have become digital Swiss Army knives: People can hail a car, shop for games, buy virtual stickers and even shop for physical goods

Asia drives Uber, Facebook to enhanced messengers
Mike IsaacVindu Goel
Last Updated : Dec 18 2015 | 12:10 AM IST
For years, Asia's technology giants have been one step ahead of Western companies in how they treat messaging apps.

Instead of the relatively simple programs that Americans use to send messages and photos to friends, popular Asian services like WeChat have become digital Swiss Army knives: People can use them to hail a car, shop for games, buy virtual stickers to send to friends and even shop for physical goods.

But recently, Facebook, the world's largest social network, has begun to emulate its Asian rivals, making its Messenger service - with 700 million users - more of an all-purpose platform.

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On Wednesday, Facebook announced a partnership with Uber, the ride-hailing service, that will for the first time allow users in the United States to summon a vehicle from within the Messenger smartphone app. It is a significant move for both companies, which are expanding aggressively beyond their core markets.

Uber will be able to capitalise on Facebook Messenger's hundreds of millions of users. The service will be introduced in the United States first and only in cities that have Uber. International expansion is planned for later.

"A lot of the plans that you are making with friends and family are happening through Messenger," David Marcus, vice president for messaging products at Facebook, said in an interview. "When people come together, there is always a need to request transportation. It's actually bringing a lot of utility to the platform."

Facebook said it would add more ride-hailing companies in the coming months.

For much of the last year, Facebook has been gradually trying to make Messenger more than a communications app.

In March, it began allowing developers to write small apps that could be included in Messenger, although most of them are variations on emojis and selfies. A handful of retailers and other companies are using Messenger to provide customer service.

Messenger also introduced a payment service that allows users to send money to one another via debit cards but cannot be used to make purchases. And it is testing a concierge service called M that blends humans and computer algorithms to respond to service requests.

Facebook's cautious approach is warranted, said Brian Blau, an analyst with the technology advisory firm Gartner. The Swiss Army knife model popular in Asia helps an app get big fast, he said, but the risk is that it gets bloated.

"People want ease of use," Blau said. Silicon Valley has "moved away from feature-heavy apps."

Uber's integration with Facebook is fairly straightforward. Over the next few days, Facebook will be updating its app so that existing Uber users can connect their accounts to Messenger and request rides from inside conversations in the app. New users can sign up for Uber from within Messenger, a potential boon to Uber's growth prospects. (As an incentive to try ordering an Uber car through Messenger, the first ride up to $20 will be free for each customer.)

Uber executives say the Messenger experience will be far beyond what is available in today's Asian messaging apps.

"It's first inning, as far as how much these apps are capable of doing," said Emil Michael, senior vice president for business at Uber.

Facebook is banned in China, but it has closely studied Asian chat apps like WeChat, Line and KakaoTalk, which play a far more prominent role on mobile phones overseas than messaging apps do in the United States and Europe.

"What is common is this notion that messaging apps can be the place for everything that is happening in your life," Marcus said. "The way we are going about it is different."

Facebook, he said, wants to provide its additional services within the thread of a conversation.

"For us, it's all about context," Marcus said. "The way we look at whether an experience makes sense inside of Messenger is if it makes sense within the confines of a conversation."

WeChat, the dominant Chinese chat app, is more like a collection of apps. Made by Tencent, a Chinese gaming and e-commerce conglomerate, WeChat bundles many services, including games and shopping, and new ones are being added every day. Group messages are a main attraction, as are recorded voice messages that can be sent like texts, and many companies use the service for business discussions.

Companies like WeChat - and similar messaging services like Line in Japan and KakaoTalk in Korea - do not make money directly from messaging. Instead, their strategy has been to make the number of people who use the app as large as possible and make money on extra services, like games or stickers. More than 650 million people regularly use WeChat every month, and the service averages $7 in annual revenue per user on its network, according to estimates from the research firm Nomura.

Scott Nelson, head of North America for Viber, a chat service owned by the Japanese retail giant Rakuten, said every messaging service was trying to find its own formula. Viber, for example, features public conversations that celebrities, news outlets and consumer brands can have with their followers.

Nelson said messaging apps must find the right balance between simplicity and providing the features that users want - something that may vary by country.

"You've got to be light and nimble," he said. "That being said, there is a place for a few things here and there that make the end user's life easier."

Blau said it remained to be seen what extra services users really wanted to see from Messenger. "They can add taxis, they can add banks," he said. Virtual personal assistants, like the M concierge service that Messenger is testing, might also be appealing.

"The question is which ones of these will be core," he said. "We are still in relatively early days for messaging platforms."
©2015 The New York Times News Service

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First Published: Dec 18 2015 | 12:10 AM IST

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