Allen Zhang stepped on stage to wrap up a long day of presentations at a Tencent conference - four hours later, the WeChat founder had methodically torn apart his own brainchild before mapping out the next act for China’s premier super-app.
Mr Zhang, who commands a cult-like following in China thanks to WeChat’s explosive popularity, got an audience of thousands glued to their seats until nearly midnight last week. The usually reclusive executive, in a company known for low-key leaders, laid out a vision for how the platform used by a billion people should evolve: by emulating real life and social circles.
His creation - a mash-up of WhatsApp, Instagram, Facebook, Yelp, Paypal, Twitter and Kindle - has become intertwined with the daily lives of just about every Chinese person.
And it is hugely successful financially. Despite the fact that the world's largest social media site Facebook had more than twice the number of active users at the start of last year, revenue for WeChat's owner Tencent was not far off parity. In addition, the Chinese firm's first-quarter net profit for 2018 was only around 20 per cent lower than the US behemoth's at $3.8 billion, according to Statista.
Yet Mr Zhang confessed WeChat, known as Weixin on mainland China, risks becoming obsolete. It’s lost the veneer of authentic discovery that endeared it to users, because people were becoming too sensitive to their online personas on Moments (a feed akin to Facebook’s.)
The 49-year-old’s first step is deceptively simple: a video-streaming feature, not unlike Instagram’s feed, so people share their lives in real time, not through carefully curated photos and messages.
“WeChat will need to face new challenges in the next eight years,” Mr Zhang said “Moments has become a very traditional place for social networking, as people use it to showcase the best of themselves to win recognition from others.”
Introduced in December, the video-streaming button - a camera icon on the top right corner of the user profile page - allows people to add emojis, text and music. Mr Zhang sees it as the antithesis of Moments: even the “send” button is swapped with a nonchalant “this will do” to dampen anxiety.
“What we want is something that can let people record what they’re really experiencing, and let their friends see,” he said. “This process should not be like Moments. If it were, we wouldn’t be doing this.”
While Moments has grown users continuously for seven years and each day more than 45 billion messages are sent, Mr Zhang is looking ahead. Many are starting to re-think how they showcase their personal photo and article-sharing history to new contacts as their phone book expands. To counteract that anxiety, WeChat introduced a setting to let people display posts for just three days, a function now employed by more than 100 million.
“Allen really spent a lot of time trying to explain the philosophy behind the WeChat product during that four-hour speech,” said John Choi, an analyst with Daiwa Securities in Hong Kong. “It’s clear that they need to further enhance user engagement, as user growth is not going to be the key growth driver in the future.”
While WeChat has been the star of China’s internet for years, newcomers like Bytedance are now making things harder. The owner of Toutiao, Douyin and Tik Tok has become the world’s most valuable start-up, according to Bloomberg, which in October last year said Bytedance closed $3 billion (Dh11bn) of funding from SoftBank Group and other major investors at a valuation of $75bn.
“The much-reported cannibalisation of screen time from Bytedance’s apps are obviously hurting WeChat, and with little wonder,” said Mark Tanner, founder of Shanghai-based research and marketing company China Skinny. “WeChat needs to stay relevant for those hundreds of millions of users who just want something simple to use, that looks good and is entertaining and are used to newer, shinier things being launched.”
A red flag for the app is that readership for articles referred by friends on Moments has been dropping. Mr Zhang conceded that WeChat’s algorithm-based referral feature is sub-par. So he introduced “Hao Kan” (or good-looking), letting users mark articles they’ve read as an alternative way to spread the word among friends.
“The way we mostly gather new information is not from the library or actively searching from the web but from people around us,” said Mr Zhang. “In order to create a product that attracts the masses to read, it needs to be based on social recommendation, only then will this have a chance.”
As in real life, people also don’t hang out in one locale. Hence, Mr Zhang envisions a plethora of satellite apps - similar to the digital book service already in use - which share functions and links to the main app but can stand alone.
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“WeChat as an app has already featured many, many things,” he said. “But there’s a limit to how much it can hold.”
Complementing those initiatives will be a build-out of Mini Programs - the lite-apps platform that already sits atop WeChat’s interface and provides quick access to services including restaurants and cinema bookings.
WeChat plans a recommendation system based on friends’ reviews, to help people discover products. Mr Zhang hopes users in future can search within its ecosystem. For example, when a person looks up a flight, it directs them to an airline’s lite-app.
“We have the patience to nurture it slowly,” said Mr Zhang.
To assure third-party developers, he insists WeChat won’t play favourites or direct traffic to Tencent’s portfolio companies, while acknowledging the company hasn’t operated as fairly as it could have in the past. That stance has been a point of contention within Tencent, with staff from other divisions often complaining about how WeChat is run like a dictatorship. Mr Zhang said if he didn’t rule the roost, the product would lose its soul.
“I’ve always regarded myself as a product manager and not a professional manager,” he said. “A good product needs a dictator, otherwise if too many opinions are involved, the product will fall apart.”
In regards to dictators, many may see a parallel in Beijing's presence online. In September, The National reported on the Social Credit system that's being rolled out in China. A hybrid of credit ratings, behaviour analysis and state blacklists, it was announced by the Chinese Ministry of Public Security in 2015 as a way of assigning every Chinese citizen a score based on their "sincerity", and to reward high achievers. It's set to become fully operational in the next two years. "Its objective," read the Ministry's announcement, "is to raise the honest mentality and credit levels of the entire society".
The Chinese Supreme Court’s 2013 decision to make public the names of defaulting debtors was perhaps the first seed of the Social Credit system. It’s been reported that 8.7 million flights and 3.4 million train journeys were denied to blacklisted citizens up until the end of 2017. But the integration of smartphones into society, and the widespread use of payment apps such as Alipay and WeChat Pay, has resulted in a colossal amount of behavioural data that can be fed into a calculation of “sincerity”.
The progression from these trial schemes into a fully-fledged Social Credit score relies on data sharing and co-operation between technology firms and the government. “Chinese tech companies operate because the Chinese Communist Party allows them to,” according to Dr Samantha Hoffman, non-resident Fellow at the Australian Strategic Policy Institute. “It does not matter if a company, or the individual leadership of a company is indifferent toward the Party – they are still legally responsible to the Party.”
It remains to be seen whether Mr Zhang’s most recent vision will prevail. WeChat has kept its dominance in a sea of rival Chinese apps in part because it maintained a clean interface and hasn’t bombarded users with ads and alerts.
Take Mr Zhang’s insistence on never changing WeChat’s welcome screen, which shows a silhouette of a lone person looking up at a vast depiction of planet Earth.
“Every time you see the loading page of WeChat, you’ll think ‘what is this person doing? What is he doing in front of planet Earth?” he said.
“One billion users will have one billion interpretations and find something that moves them.”
MATCH INFO
Fixture: Thailand v UAE, Tuesday, 4pm (UAE)
TV: Abu Dhabi Sports
The Pope's itinerary
Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport
Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial
Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport
UAE SQUAD FOR ASIAN JIU-JITSU CHAMPIONSHIP
Men’s squad: Faisal Al Ketbi, Omar Al Fadhli, Zayed Al Kathiri, Thiab Al Nuaimi, Khaled Al Shehhi, Mohamed Ali Al Suwaidi, Farraj Khaled Al Awlaqi, Muhammad Al Ameri, Mahdi Al Awlaqi, Saeed Al Qubaisi, Abdullah Al Qubaisi and Hazaa Farhan
Women's squad: Hamda Al Shekheili, Shouq Al Dhanhani, Balqis Abdullah, Sharifa Al Namani, Asma Al Hosani, Maitha Sultan, Bashayer Al Matrooshi, Maha Al Hanaei, Shamma Al Kalbani, Haya Al Jahuri, Mahra Mahfouz, Marwa Al Hosani, Tasneem Al Jahoori and Maryam Al Amri
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
ASIAN%20RUGBY%20CHAMPIONSHIP%202024
%3Cp%3E%3Cstrong%3EResults%3C%2Fstrong%3E%3Cbr%3EHong%20Kong%2052-5%20UAE%3Cbr%3ESouth%20Korea%2055-5%20Malaysia%3Cbr%3EMalaysia%206-70%20Hong%20Kong%3Cbr%3EUAE%2036-32%20South%20Korea%3Cbr%3E%3Cbr%3E%3Cstrong%3EFixtures%3C%2Fstrong%3E%3Cbr%3EFriday%2C%20June%2021%2C%207.30pm%20kick-off%3A%20UAE%20v%20Malaysia%3Cbr%3EAt%20The%20Sevens%2C%20Dubai%20(admission%20is%20free).%3Cbr%3ESaturday%3A%20Hong%20Kong%20v%20South%20Korea%3Cbr%3E%3C%2Fp%3E%0A
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Youth YouTuber Programme
The programme will be presented over two weeks and will cover the following topics:
- Learning, scripting, storytelling and basic shots
- Master on-camera presence and advanced script writing
- Beating the algorithm and reaching your core audience
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
hall of shame
SUNDERLAND 2002-03
No one has ended a Premier League season quite like Sunderland. They lost each of their final 15 games, taking no points after January. They ended up with 19 in total, sacking managers Peter Reid and Howard Wilkinson and losing 3-1 to Charlton when they scored three own goals in eight minutes.
SUNDERLAND 2005-06
Until Derby came along, Sunderland’s total of 15 points was the Premier League’s record low. They made it until May and their final home game before winning at the Stadium of Light while they lost a joint record 29 of their 38 league games.
HUDDERSFIELD 2018-19
Joined Derby as the only team to be relegated in March. No striker scored until January, while only two players got more assists than goalkeeper Jonas Lossl. The mid-season appointment Jan Siewert was to end his time as Huddersfield manager with a 5.3 per cent win rate.
ASTON VILLA 2015-16
Perhaps the most inexplicably bad season, considering they signed Idrissa Gueye and Adama Traore and still only got 17 points. Villa won their first league game, but none of the next 19. They ended an abominable campaign by taking one point from the last 39 available.
FULHAM 2018-19
Terrible in different ways. Fulham’s total of 26 points is not among the lowest ever but they contrived to get relegated after spending over £100 million (Dh457m) in the transfer market. Much of it went on defenders but they only kept two clean sheets in their first 33 games.
LA LIGA: Sporting Gijon, 13 points in 1997-98.
BUNDESLIGA: Tasmania Berlin, 10 points in 1965-66
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
Russia's Muslim Heartlands
Dominic Rubin, Oxford
The specs
Engine: 3.8-litre twin-turbo flat-six
Power: 650hp at 6,750rpm
Torque: 800Nm from 2,500-4,000rpm
Transmission: 8-speed dual-clutch auto
Fuel consumption: 11.12L/100km
Price: From Dh796,600
On sale: now
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
THE BIO
Favourite car: Koenigsegg Agera RS or Renault Trezor concept car.
Favourite book: I Am Pilgrim by Terry Hayes or Red Notice by Bill Browder.
Biggest inspiration: My husband Nik. He really got me through a lot with his positivity.
Favourite holiday destination: Being at home in Australia, as I travel all over the world for work. It’s great to just hang out with my husband and family.
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
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