THE BOTTOM LINE
Watch out if ‘WhatsApp on steroids’ loses its muscle
Via its 31% stake in Tencent, Naspers has much to lose if WeChat starts losing ground. So too does the JSE
Tencent’s WeChat has become so ingrained in Chinese society that it is difficult to imagine a scenario in which the social media app loses relevance.
WeChat is basically WhatsApp on steroids. The platform has a billion active monthly users. Beyond messaging, it facilitates payments, delivers news and content, and acts as an e-commerce tool.
Data shows that 83% of all smartphone users in China use WeChat. But, as highlighted by a report from Hong Kong’s South China Morning Post over the weekend, a growing number of Chinese nationals – especially those who have lived abroad – are becoming disillusioned with the app.To many, it’s concerning that the Chinese government can demand user data from Tencent for surveillance purposes. Last year a man was handed a jail sentence after privately commenting on the Islamic State militant group over WeChat.
However, WeChat has probably become too large and too entrenched in Chinese society to fail. Facebook, for instance, has more than two billion users and has faced similar discontent following its recent data breach. Many have threatened to abandon the US-based social media site, but most of the disgruntled are unlikely to do so because their friends and family won’t do the same.
However, to ensure they are sustainable over the long term, the likes of Facebook and WeChat need to make sure they listen to these relatively small groups of unsatisfied users.
Via its 31% stake in Tencent, Naspers has much to lose if WeChat starts losing ground. So too does the JSE, given Naspers’s heavyweight status in local indices.