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Zhang Xiaolong, also known as Allen Zhang, is a Chinese Programmer known for creating WeChat and Foxmail. Photo: handout

Within WeChat, worries about challengers and life after Allen Zhang

  • WeChat insiders discuss how to remain agile in the face of rising competition from upstarts in China’s competitive social media industry
  • London Business School conducted interviews with WeChat executives for a business case study
WeChat

WeChat head Allen Zhang Xiaolong used to approve every change to Tencent’s flagship social media app, down to the colours and fonts.

But as WeChat surpasses 1 billion users and plays host to more than 1 million mini-apps on its ecosystem, operations have finally become too big for him to oversee everything.

How to stay agile and nimble in a rapidly changing social media landscape with a top-down approach for a 2,000-strong team, and what happens to strategy should Zhang one day leave or step back, were among the top issues on the minds of WeChat executives as the app enjoys its perch as China’s most dominant super-app.

These discussions, gleaned from interviews by the London Business School for a business case study and in written comments provided to the South China Morning Post, offer a rare glimpse into the inner workings of a unit that dominates the country’s social media scene.

“I admit I am very dictatorial,” Zhang, 49, told the London Business School for its case study. “There are many products that are very democratic, but if there are many leaders giving their thoughts, then there is no spirit to the product and the product fragments,” he said. “A product needs to have a strong identity in order to have everything in coherence.”

Started as a messaging tool in 2011, WeChat has become an indispensable tool for many of its users, who rely on it for everything from paying bills to reading news, playing games and ordering meals. At its core is an apps-within-an-app concept that allows users to meet most of their online needs without leaving the main app, a model that has since been copied not just in China but in Southeast Asia and increasingly, in the West.

But with 1.1 billion accounts for an estimated 829 million internet users in China, WeChat has hit saturation point. And for all its success, WeChat remains little known or used outside the country apart from overseas Chinese students, expatriates and the Chinese diaspora.

At home in China, many social-media start-ups have tried to take on the king.

Among them, ByteDance, the world’s most valuable start-up backed by Japan’s SoftBank, has been the best-resourced, challenging WeChat with its Toutiao news app, Douyin (known as TikTok outside China) short-video app and more recently Duoshan, a video-based social messaging app. Tencent has been alarmed enough to block users from opening links to some of ByteDance’s products within its WeChat app, prompting accusations that Tencent was engaging in monopolistic behaviour.

WeChat’s ascendance can be traced to its birth at a time when smartphone ownership among Chinese consumers began to hit critical mass. At that time, QQ, another Tencent product, was the dominant messaging tool in China, developed for personal computers.

Pony Ma Huateng, co-founder and chairman of Tencent, had sensed the challenges posed by mobile-first services and gave Allen Zhang permission to set up a team to develop a mobile messaging tool.

Under Zhang, the WeChat team experimented with many different features, especially those that worked uniquely well on mobile phones, such as voice messaging and virtual red packets (a Chinese gifting tradition). They also created mini-programs, which are mini-apps that can load within the main WeChat app without requiring separate downloads from an app store.

WeChat succeeded in part because it was based in Guangzhou, away from Tencent’s headquarters in Shenzhen. The distance helped during the formative years because Ma seldom intervened in Zhang’s decisions, according to Dickie Liang-Hong Ke, an investor and London Business School Sloan Fellow who co-authored the case study, citing the relatively few advertisements on WeChat as an example.

Ma allowed Zhang to make all the key product decisions and did not set explicit financial targets for WeChat, which allowed the team to experiment without undue pressure to meet revenue metrics, according to Ke.

Tencent on Wednesday reported first-quarter profit rose 17 per cent to 27.2 billion yuan (US$3.9 billion). Online advertising contributed 16 per cent, with 13.4 billion yuan in revenue, driven by WeChat Moments, mini programs and QQ’s entertainment news feed Kan Dian.

Another question dogging WeChat is how to remain nimble when the original 10-person team has grown to an army of 2,000.

“We are definitely not as agile as we used to be,” Aimier Cheng, head of human resources for WeChat, said in written comments. “There are two reasons. First, Allen has limited time and energy: he can no longer oversee a product from beginning to end like he used to. Second, I believe WeChat shoulders too heavy a mission.”

With one billion users, there are “huge social responsibilities” and that puts a lot of pressure on people working there, Cheng said.

Zhang’s involvement in WeChat extended to approving features as small as the colour and font of messages, according to Lyle Chen, an early member of the WeChat team, in written comments. Zhang would monitor progress every day, use the app and provide feedback so that the team can make improvements, Chen said.

Zhang’s strong personal stamp on WeChat, ironically, raises the question what would happen to the product should he step back or down.

“As WeChat matures amid an ever sophisticated environment, WeChat will need something more than Zhang’s outstanding talent,” Wang Chong, professor at the Peking University Guanghua School of Management, said in an interview. “WeChat may find it hard to get substantial development by simply relying on Zhang’s personal ability.”

This article appeared in the South China Morning Post print edition as: Does WeChat have a post-Zhang strategy?
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