NEW YORK -- From Facebook to Snapchat, U.S. social media giants are starting to borrow from Tencent Holdings' playbook, rolling out one after another update reminiscent of the Shenzhen-based company's flagship product, WeChat.
WeChat, the messaging app boasting over 1 billion daily active users, is often known as the original "super app" -- a mobile platform offering myriad features, from ride hailing to wealth management, which users can access without having to leave the app.
Los Angeles-based Snapchat, which Tencent holds a stake in, has just introduced Snap Games, allowing users to play in-house or third-party video games with friends without having to exit the app, much like mini games launched on WeChat in 2017.
Wall Street, which has long been concerned with Snapchat's ability to turn a profit, reacted positively to the change, pushing parent company Snap's stock higher after the announcement.
Connie Chan, a partner at Menlo Park, California-based venture capital firm Andreessen Horowitz, said that while historically there was little English coverage on Chinese tech from a product and strategy perspective, large U.S. tech companies are now starting to take note, partially because the likes of Alibaba Group Holding and Tencent have demonstrated their clout through strong market caps.
Chan, who worked in Beijing prior to joining Andreessen Horowitz, writes and produces a podcast regularly on analysis on Chinese tech and shares her insights with portfolio companies, entrepreneurs and Fortune 500 tech companies. She is known in Silicon Valley as the "China whisperer."
San Francisco-based online forum Reddit began testing a tipping feature that would allow users to make payments to authors of posts, following a $300 million funding round led by Tencent. The option to tip a content publisher has been available on WeChat's publishing platform on and off since 2016.
A Reddit spokesperson said the company is "always running experiments to test potential features that support and empower our users. The tipping feature is one such experiment aimed at empowering users to reward creators and support their community. Only a small percent of experiments get implemented."
Matthew Brennan, a Shenzhen-based tech analyst, said Tencent as an investor brings industry expertise to the table -- besides just capital -- for companies like Snap and Reddit, which have to compete with larger U.S. players such as Facebook.
"Tencent can add a lot more value than just the money," Brennan said. "Reddit is probably quite happy that they got this company that has so much expertise in a market that's China, which is dynamic these days and has so much going on."
The largest U.S. social media company by market capitalization, Facebook also looks to be taking hints.
Last month, Facebook CEO Mark Zuckerberg unveiled a "privacy-focused vision" for social networking, centered on a private messaging-based platform that will also offer calls, video chats, stories, payments and commerce. Two weeks later, its subsidiary Instagram rolled out an in-app e-commerce feature for select retailers.
Earlier in 2015, Facebook added a payments feature to its instant communication tool Messenger, one and a half years after Tencent.
Facebook declined to comment when asked if they had studied the WeChat model.
In China, many mobile users have long grown accustomed to completing various tasks within WeChat's platform. Without leaving the app, users can complete various tasks such as making a purchase or booking movie tickets, services provided by Tencent's own portfolio companies including Nasdaq-traded Pinduoduo, as well as other businesses.
The technology has paid off enormously. According to a 2018 report by Beijing-based data research company QuestMobile, 47.3% of China's total time spent online on mobile could be attributed to Tencent.
In earlier years, Chinese social media platforms were not known for their innovation, with the first players in the space being mostly ripoffs of Western counterparts.
Tencent's instant messaging platform QQ was an answer to then-popular ICQ (later acquired by AOL) and Microsoft's MSN. Renren.com, the Chinese equivalent of Facebook, enjoyed huge popularity in the latter half of the 2000s but flopped when Tencent's WeChat took over by storm, starting a mobile revolution. That was when the tide started turning.
"Mobile first and mobile only, I think, is the overarching theme of China -- also the idea of experimenting different business models outside of advertising, which you're starting to see very early signs in the West," Chan said.
Chan explained that by being mobile-first, Chinese social media was forced to experiment alternative monetization techniques very early on, with advertisements being less appealing on a phone compared to a computer. The super app, which minimizes the taps needed for each action, thereby improving user experience, also stems from the mobile-first principle, she said.
Fierce competition and consumers readily embracing new practices and models also pushed Chinese companies to innovate faster and better, according to Chan.
"Consumers in Asia are, on a margin, more experimental when it comes to accepting new features or tolerating constant changes to the user experience," she said.
Michael Pachter, an analyst who covers Facebook and Snapchat for Los Angeles-based Wedbush Securities, said it makes sense for companies like Facebook and Snapchat to emulate what has worked in China.
"The Chinese aren't that unique. They are consumers and they respond" to the kind of in-app functionalities WeChat has, Pachter said. "If it works well in China, it should also work elsewhere."
Besides Facebook and Snapchat, some smaller companies are also learning from Tencent -- and they are not hiding it. In 2014, Ted Livingston, CEO of Canadian messaging service provider Kik declared his ambition to make Kik the "WeChat of the West." Tencent became an investor in Kik the following year.
Analysts warned, however, that Western companies will not be able to simply copy and paste the WeChat model, due to different consumer and regulatory environments.
"If we didn't have anti-trust rules, I think Facebook would have bought everybody up" and become a super app, Pachter said.
"It's important for an entrepreneur studying Asia to know which things translate, and which things are very much a function of Chinese or Asian culture," said Andreessen Horowitz's Chan.
