Elon would have known that his plan to make X a WeChat-like super app is doomed.

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Elon Musk believes that turning X into a WeChat-like app with everything could be profitable for the company.
He may have missed a key point: the US is not China, and WeChat may not be able to replicate its success.
Musk will need to rethink his strategy if he is to bring the company back on track.

Elon Musk could be all-in with his plan to make X an app that does everything, similar to China's WeChat. His grand plans may not be realized due to the huge differences between US and Chinese markets.

Last week, the billionaire took some drastic steps to completely rebrand Twitter. Musk changed Twitter's bird-logo to the letter "X" on July 24. In a tweet sent the same day, Musk also announced that he planned to make X an "everything" app that would have "comprehensive communication and the ability of conducting your entire financial life."

It might sound like tech-world mumbo jumbo but the ambitions Musk had for PayPal, X.com and other companies makes sense. Musk actually gave us a glimpse of what X could look like in the future when he expressed last summer his admiration for China’s all-encompassing app, WeChat.

"For those who have used WeChat I think WeChat is actually a good example. Musk stated on the "All-In Podcast", in May 2022, that it does everything. It's like Twitter plus PayPal and a bunch of other stuff all rolled up into one, with a really great interface.

It's a really good app. Musk added, "We don't have any app like that outside China."

Here's the tricky part for Musk

WeChat has been positioned from the beginning to be an "everything" app

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China has a number of rules for business. For things to run smoothly, the sky above and the earth below must be in alignment. The first and most obvious problem Musk has to deal with is this. The road ahead is not paved to allow X to reach the holy grail app of all apps in the same manner as WeChat.

WeChat started out very differently from Twitter. This is part of what made it so popular. Tencent, a Chinese tech giant, launched WeChat in 2011 as a simple message app. Statista reports that WeChat has more than 1.3 billion active monthly users. This is nearly four times as many users as Twitter had in December of 2022.

Musk misses the point when he looks at the numbers of users and assumes that by adding features to X, it will become the WeChat of the West. WeChat has a built-in social ecosystem that keeps its users locked in. Facebook and Twitter, for example, will never be able achieve this.

You can't get away from WeChat if you are a Chinese, because all of your family members, including parents, grandparents and childhood friends, as well as teachers, co-workers, and bosses, use it. It is the main communication tool for Chinese living behind the Great Firewall.

You won't be able to leave WeChat, even if it's your wish. In modern China, you cannot buy anything without WeChat. WeChat Pay, the digital wallet of WeChat, is used by most Chinese retailers to accept payments. WeChat is so ubiquitous in China that even foreigners find it difficult to navigate the country without using this app for simple purchases. WeChat reigns supreme in China's cashless app garden.

WeChat has become a part of everyday life in China. WeChat is used to pay utility bills, fines from the government, and even medical appointments. Musk has been behind the curve. People have already used WeChat for years to pay their utility bills, fines and even schedule medical appointments.

X has entered the market too late and there are too many competitors for it to be able to gain a dominant position

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Musk may not be able to find a way to make the features attractive enough for Western consumers to commit to a possible X ecosystem. It's important to note that a decade ago when Tencent launched WeChat, China's digital market was still developing and there were no major players.

Uber, Lyft and China's Didi Chuxing are just starting to grow. Facebook had not yet acquired Instagram or WhatsApp — but this didn't matter to Chinese consumers, since Meta's platforms were unavailable in China without a VPN. WeChat was able to use these conditions to position itself as the gateway for all of these services in one click.

Musk is trying to create a niche in the crowded tech industry. Musk's plan to disrupt the industry by creating an all-encompassing app is a war against the other tech giants, including PayPal, Venmo and Meta.

We haven't heard or seen enough about X yet to be able to say for certain if he has a chance to win. Musk could be too late in the game to have a chance of winning.

Musk would do well to acknowledge the obvious: WeChat and X are not WeChat.

WeChat is fundamentally different than Twitter. Musk's audience, which is primarily Western, does not operate the same.

WeChat's popularity is largely due to China's tech censorship. When you don't have any real competition, it isn't difficult to be a leader in digital platforms. Popular sites such as Google, YouTube and Facebook are all blocked in China.

It was much easier for WeChat, which combines the best features of these Western platforms, to fill this vacuum.

Musk has a lot of business interests in China. One would expect him to know a bit more about China and do a bit more research before he decides that X will be the American WeChat.

Insider's request for a comment sent after regular hours of business was not immediately responded to by X representatives.

Original article available on Business Insider

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By: ktan@insider.com (Kwan Wei Kevin Tan)
Title: If Elon Musk understood anything about China, he’d know his attempt to make X a super app like WeChat is doomed to fail
Sourced From: www.businessinsider.com/why-elon-musk-attempt-twitter-x-super-app-doomed-fail-2023-7
Published Date: Mon, 31 Jul 2023 07:16:50 +0000