The clash of the chat apps

Just as we finished with our review of WeChat's first advertising campaign in India, and thought that we had done a good job of making our audience understand about the marketing challenges of this sector, we found two new companies launching their first major advertising campaigns targeting the same set of audience in the country.

The mobile messaging app market has seen a proliferation of apps and though all these apps, be it WhatsApp, WeChat, Line or Hike, have different business models, they all seem to be eyeing the same consumer. As the battle to acquire that sweet spot in the consumers' smartphone grows hotter, companies are hell bent on having share of the consumers' attention as well.

Where it all started

It all started with WeChat, a mobile phone text and voice messaging communication service developed by Tencent of China, which launched a television campaign in India featuring popular Bollywood stars Parineeti Chopra and Varun Dhawan. Designed by O&M, the first TVC of the campaign went on-air on May 10, while the second ad was released on May 17. Both the TVCs seem to promote the 'Hold to Talk' feature of the app, which allows the user to send voice messages to another WeChat user.

Rahul Razdan, head of Tencent India, says that Chopra and Dhawan are not only young stars with a mass youth appeal, but also represent the freshness and the excitement which WeChat brings for its users. "Our brand ambassadors are currently the youth heart throbs and represent the spirit of young India, which is fun, happy and NOW. This definitely helps our brand penetrate the youth in the country," he adds.

Recently, Japan-based Line came up with its TVCs which had one clear message --'now you can make calls on Line for free'. Various telecom providers have been talking about low calling rates, but nobody has been able to offer an absolutely free call and Line claims to fill the gap.

Typically, though these apps claim to be offering free chat and call services, they use the phone's internet connection to send and receive messages and thus are not absolutely free as the user is charged for data consumption.

Jun Masuda, chief strategy and marketing officer (CSMO), Line Corporation tells afaqs!, "We wanted to establish that free calls mean 'endless calls.' Now with free calls you don't have a reason to put down the phone."

Distinctively, the TVCs appear to place Line as an alternative to voice calls. Is this what the company wants to portray? Masuda however disagrees stating that Line does not 'replace' but 'complements' the voice call. "We want to appear that our users can talk as long as they want with their close friends or couples. It is in a very intimate space," he adds. Hakuhodo Percept is the agency behind the advertisements.

Very recently, the home grown brand Hike, a product of Bharti SoftBank (BSB), had rolled out its first-ever marketing initiative for India on the digital platform. Taglined 'Keep close friends close', this campaign was aimed at showcasing Hike's unique product features that will enable today's technology-savvy youth to stay connected to close friends.

Kavin Bharti Mittal, head of product and strategy, BSB, states, "We were in the fourth month of our launch and have spent quite some time in understanding the consumer and the market. We realised that this is the best time to reach out to the consumers and showcase the product," he adds.

Eyeing the same pocket?

With all these ads, are these companies spending large to be placed side by side on the same smartphone? Apparently yes. For all these players, the target consumer is anyone who has a smartphone and is looking for an efficient, differentiated and richer social communication.

According to a report by Mary Meeker, India ranks fifth among the top countries for smartphone users with an estimated 67 million subscribers in 2013, behind China, the US, Japan and Brazil. Hike however works on both smartphones as well as phones with simple internet connection.

"The priority target is the young, especially young females with high communication desire.　Regarding targeting the first timers at chat applications or people using other chat apps, we are trying to target both the categories of potential users. We are trying to become the first choice for the new smartphone user," informs Masuda.

Mittal also appears to be targeting the same segment as he states that Hike's primary target is the youth who is aware of internet and is chat-savvy. "We are looking at both first timers as well as the ones who are using other platforms," he informs.

All these players have made a few tweaks and changes in their product line to appear unique. However, all three have their fair share of problems with concerns regarding their user interface and usability issues.

As far as downloads go, all three have managed to earn similar points on Google Play Store. Line for Android manages a rating of 4.1 stars, while WhatsApp attains an extremely high 4.6 star rating, and WeChat claims 4.3 star ratings. Hike has 4.4 star ratings. However, it is one thing to download an app and a totally different thing to use it heavily.

In the midst of all this hoopla, WhatsApp still remains the king of instant messaging on smartphones, with a claimed number of 20 million users in India. It also enjoys the first mover advantage in the market.

For Line, the claimed Indian user base is more than eight million. Masuda is, however, optimistic about its adoption. "While some IM apps offer vanilla text and image communications over multiple carriers, through multiple devices such as mobile and PC, Line offers additional features for free such as stickers and voice chat (group chat, too). One of the main reasons why Line is being adopted so rapidly compared to other major messenger apps is its unique sticker feature," he adds.

The Challenge

It is never easy to explain the features of a technology-oriented product to an audience through a video and that is why, the marketing challenge, according to WeChat's Razdan, is to demonstrate each benefit in the most simplified and appealing way.

Hike's Mittal also notes the challenge posed by the huge diversity of the Indian market. "The diversity of consumers in India is the biggest challenge we face as a product now. Besides, language is another major obstacle that might come in our way of growth. If we have to scale as a platform and reach all corners of India, we can't continue to be an English-only platform. Developing these technologies takes time and also, educating the consumer about the product in an effective way holds the key to success," Mittal adds.

To catch on to more users, Hike, as an introductory offer to a new user, provides one month free access to the platform, which means that the consumer will not be charged the data fees. For this, Hike has already partnered Airtel and is in talks with other operators. Notably, Hike's parent company Bhart Softbank is a joint venture between India's Bharti Enterprises (the company behind Airtel) and Japan's SoftBank. Hike claims to be in talks with other service providers too.

Line is taking a step forward and devising its business model keeping the diverse audience in mind. Masuda states that while other IM apps rely on one single business model, such as app-purchase (WhatsApp becomes paid from the second year of usage) or banner advertising (in case of WeChat), Line has three streams, which includes paid stickers for the consumers, game purchases for the consumers, and official account and sponsored stickers targeted for partner brands and businesses.

As the Indian smartphone penetration grows, there will be more players eyeing the market and thus their marketing strategies will become critical in assuring their success stories. What remains to be seen is how these apps become successful in sustaining the user base after the advertising campaign is over.