Internet & Tech

Killer app?

Why WeChat’s latest rival is Bytedance’s Flipchat

Zhang-Yiming-w

Targeting Tencent: Zhang Yiming

Meitu, known for its beauty-centric camera apps, has shut down its smartphone business. Handset makers Smartisan and Meizu have needed cash injections from local governments to stay afloat. But the setbacks for China’s more marginal handset brands has not deterred Bytedance, owner of news aggregator Jinri Toutiao and short video star TikTok (also known as Douyin in China) from getting into the smartphone business too.

According to the Financial Times, Bytedance boss Zhang Yiming has wanted to make a smartphone pre-loaded with his company’s apps for a while. Earlier this year it did a deal with Smartisan, buying a patent portfolio and hiring some Smartisan employees. Products like TikTok are already hugely popular, hitting five straight quarters as the most downloaded app in Apple’s App Store. But smartphone pre-installs are a potential means to build up even bigger customer bases.

Still, some analysts are querying any foray into such a fiercely competitive arena. Tech giants like Alibaba, Amazon and Google have all tried and failed to make branded handsets. Incumbent brands Apple, Huawei, Vivo, Oppo and Xiaomi are heavily entrenched, and they won’t offer much of a welcome to Bytedance. “There’s basically no space for Bytedance in the mass market,” Jia Mo, Shanghai-based analyst at Canalys, told the FT.

In the meantime Bytedance continues to launch new products, unveiling its new messaging app Feiliao, also known as Flipchat in English. Flipchat has been built to challenge WeChat, which is run by Tencent. Indeed, Caijing magazine reckons that Flipchat has swiped some ideas from WeChat, allowing users to send text and voice messages, as well as make voice and video calls.

Significantly it also has in-app access to services off-limits to WeChat, namely Alibaba’s e-commerce mall (Taobao), its maps (Gaode) and payments infrastructure (Alipay).

While WeChat is the overwhelming choice for daily communication, as well as offering a variety of services like mobile payments, car-hailing and food delivery, Flipchat is trying to encourage its users to create forums and chat groups centred around their interests and hobbies. In fact, the first page of the app is a list of interest groups catering to everyone from workout lovers to online gamers.

36kr, a tech portal, sees crossover here with Tencent-backed social app Jike, which allows its customers to search for preferred content and connect with each other based on topics of interest.

Initial impressions of Flipchat have generally been good: “I bet that [Bytedance boss] Zhang Yiming’s Flipchat will be very successful. I see many elements that will make it popular,” Li Xueling, chief executive of livestreaming platform YY, wrote on WeChat.

“Flipchat is more like the mobile version of Douban [the TV series and film review site]. It recommends a lot of community groups for users to join, which is more in line with the logic of Douban… I am confident that it will succeed in the long term,” Wei Zhicheng, another tech entrepreneur, told 36kr.

Not everyone is so sure. “Although there is a discovery page for users to find their interests and recommendation on groups to follow, these recommendations are not targeted, that is, there is no difference between the users. To put simply, it’s just blindly pushing content ” another tech blogger complained.

Others are sceptical that Flipchat will challenge WeChat’s dominance in mobile messaging. “In the past few years, there has been no shortage of challengers taking on WeChat: there was Alibaba’s Laiwang and Ding Talk; more recently, there was Yixin and Zhidan Duanxin [developed by Smartisan]. The only one that posed any sort of a threat was Zhidan Duanxin but even that ran into the problem of user stickiness. After garnering a lot of users in the first month, many later uninstalled it. This is a persistent problem Flipchat will have to solve,” Caijing concluded.

In March Bytedance accounted for 11.3% of users’ total time spent on ‘giant apps’ – i.e. those apps surpassing 100 million monthly active users — according to data from research firm Questmobile. Tencent controlled 43.8%. The remaining 44.9% was shared between Alibaba, Baidu and others.


© ChinTell Ltd. All rights reserved.

Exclusively sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.