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WeChat users look to Japan's Line for alternative as US ban looms

As Washington scrutinizes Chinese chat giant, downloads of rival surge

(Source photo by Reuters)

PALO ALTO, U.S./HONG KONG -- After the Trump administration announced it would look into banning Chinese social media apps, much of the attention focused on TikTok, the wildly popular platform for sharing short videos. But it is far from alone.

Chinese messaging giant WeChat, owned by Tencent Holdings, has also become a target of Washington's scrutiny, and the possibility of a U.S. ban on the app is already benefiting competitors as users search for "safe" alternatives.

Li Wen is a diehard WeChat user, but when more than a dozen of her friends started setting up accounts on Line, a Japanese messaging app, in July, she decided to do the same.

"Please add me on Line in case one day you may no longer be able to reach me on WeChat," Li posted in WeChat, along with the QR code for her new Line account.

Though the 24-year-old has been living in Los Angeles since she moved here from Jiangsu province six years ago, WeChat remains her most used app.

"The majority of my social circle are connected by WeChat," said Li, an overseas education consultant. "Not only do I use it to talk to my family and friends back home, but most of my friends here in the U.S. chat via WeChat."

Li, like many other WeChat users, is now worried she could lose vital online connections, both personal and professional.

"[TikTok] and WeChat are the biggest forms of censorship on the Chinese mainland, and so expect strong action on that," White House trade advisor Peter Navarro said in a TV interview on July 12, days after the U.S. Secretary of State Mike Pompeo said that the government was looking at banning Chinese social media apps amid rising tensions between the two countries. 

One concern U.S. regulators have raised is the supposed link between these apps and the Chinese government, saying it could give Beijing access to data of U.S. users. When asked if Americans should keep Chinese social media apps on their phones in a TV interview, Pompeo replied: "Only if you want your private information in the hands of the Chinese Communist Party."  

The drama surrounding WeChat highlights the tricky position of users like Li, who live in one country but rely on an app from another: As geopolitical tensions rise, crackdowns on foreign apps are becoming more common, threatening the convenience and ease of communication that billions of internet users have come to take for granted.

While details of a possible WeChat ban remain unclear, users have wasted little time seeking alternative messaging apps.

Following Navarro's comment, Japanese messaging app Line was installed at least 119,000 times in the U.S. between July 13 and 19, jumping 213% from the previous week's total of 38,000, according to statistics from market intelligence firm Sensor Tower.

American messaging apps such as WhatsApp and Facebook Messenger did not log notable increases in adoption during the same period, according to Sensor Tower.

Facebook's WhatsApp, Instagram and other major social media apps such as Telegram and Signal are blocked in China. Line, a popular messaging app in Asia, is no exception.

"All foreign apps are blocked in mainland China. ... But at least Line is not owned by a U.S. company, which makes it more likely to be unblocked by the Chinese government compared to the American ones," Li said.

Several other U.S.-based WeChat users interviewed by the Nikkei Asian Review cited Line's non-U.S. affiliation as the main reason for choosing it as their top alternative.

Line, created by South Korean internet giant Naver and recently merged with Yahoo Japan, was blocked in mainland China in July 2014.

"The blockage of Chinese social media apps by the U.S. will for sure be seen as politically motivated by Beijing, which means China will retaliate and crackdown on U.S. apps even further. ... It might be possible for some foreign apps like Line to be unblocked in mainland one day, but it is less likely for the American ones under current circumstances," said a Silicon Valley-based venture investor who asked not to be named as the matter is sensitive.

Potentially complicating the situation, however, Japan has recently started looking into banning TikTok, a move that would certainly anger Beijing.

Line, which has 200 million active global users, has another selling point, however: its popular stickers.

"I'm a big fan of Line Friends, so when I started to think of finding a back-up messaging app, Line was the first that came to mind," said Ceci, a New York-based WeChat user who works as a corporate lawyer and relies on the Chinese app to contact with her colleagues in China on a daily basis.

Line Friends -- unique cartoon characters created as sticker for use in the app's chat function -- have been used in a wide range of products, from clothing and toys to cafes and theme parks, since they were spun off from Line Corp. as a stand-alone company in 2015.

Despite the app being blocked in China, Line Friends still opened more than seven stores in China since 2014, which has helped the Line brand become more familiar to Chinese consumers than some other foreign social media apps.

Line declined to comment other than to confirm that its app is still blocked in mainland China.

With more than 1.2 billion monthly active users, WeChat has grown into a ubiquitous super app that is used not only for messaging but also online meetings, payments and other daily functions in China.

"WeChat is more than a messaging app. It is also the center for my social and work life. ... In China, you might not have your contact's phone number, but you must have his/her WeChat," said Ceci. "I don't even know how to reach my mom if the app is blocked."

While a U.S.-ban would be disruptive for many WeChat-dependent users, the loss of access to the U.S. market would likely have less of an impact on the app's owner, Tencent.

"The U.S. market is not the most important market for WeChat," said Matthew Brennan, managing director of Shenzhen-based consultancy China Channel.

Indeed, of 279 million overseas downloads in the past six years, the U.S. contributed less than 7%, or 19 million, according to Sensor Tower.

David Dai, an internet analyst with Bernstein in Hong Kong, agrees.

Since Silicon Valley titans such as WhatsApp, Messenger and Signal have already established market dominance in the U.S. and Europe, "the chance for WeChat to crack into those matured markets is slim," even if WeChat did not face regulatory headwinds, Dai said.

Tencent did not respond to Nikkei's request for comment.

But the U.S. is not the only overseas market that Tencent has to worry about.

Last month, the Indian government announced a ban on 59 Chinese apps including WeChat. Users in India are now no longer able to log in to the app or send and receive messages, the Nikkei has confirmed.

Similarly to the U.S., the ban has given other messaging apps a boost in terms of downloads in the country.

"We have seen some lift for WeChat competitors in India since its removal there, including Telegram which has surpassed WhatsApp for daily installs during the past week," said Randy Nelson, an analyst at Sensor Tower.

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