Conversational Commerce: Asia versus Europe | Gen25

Conversational Commerce: Asia versus Europe

Blog Gijs Martens | 14-08-2018 Conversational commerce, Social25

In China, it's already the most common thing in the world: paying for purchases, ordering a taxi, reserving cinema tickets, playing games and transferring money, all via a chat app. In fact, Chinese consumers use WeChat for virtually everything. In Europe, we are seeing the phenomenon of companies using apps such as Facebook Messenger slowly gaining in popularity – yet apart from a few live chat apps for customer service, the innovation and range of applications demonstrated by WeChat remains glaringly absent. How can it be that WeChat is WhatsApp's largest competitor, but not in the Netherlands?

For quite some time now, it's been evident that consumers appreciate being able to communicate with companies via the same social media channels they are already using. This is why KLM has been using Facebook Messenger to send boarding passes since 2016, and why it's possible to get your tickets for the By the Creek festival via that same app. Although this kind of service seems especially innovative in the European context, it barely scratches the surface of the true range of possibilities.

The ‘Swiss army knife’ of apps

While the Chinese app WeChat started out as a chat application, it has since expanded into a kind of ‘Swiss army knife’ of chat apps. Not only does WeChat account for a considerable portion of all payment traffic in Asian countries (in the first ten months of 2017, the total value of transactions in Beijing was an impressive $16.7 trillion), it also offers all manner of additional functionalities that make life easier for companies and consumers. Users can receive coupons offering a discount at a particular shop when they are in the vicinity, for example, or schedule a doctor's appointment via a ‘mini-app’ in WeChat. They can even arrange to have their dirty laundry picked up and then delivered back to their homes, cleaned and pressed. This eliminates the need to have a separate app for every service or shop. Users no longer need to download the app for their local cinema in order to purchase a ticket and reserve a seat: they can do it all using their favourite app.

Why does it work in Asia and not in Europe?

How can it be that an app used by over a billion people is still so unknown in the Netherlands? There are a few important reasons for this. First of all, Chinese society tends to accept new technologies more readily. Chinese citizens are quick to integrate new innovations into their daily lives. This is reflected in the urban landscape of major cities such as Shanghai, where people constantly have their smartphones in hand – even more so than in the Netherlands. In restaurants, in the street, in the train: everywhere you look are smartphones.

Another important difference I've observed is that the Chinese attitude towards privacy and personal data is fundamentally different than the European one. This poses a real obstacle to the widespread acceptance of this kind of innovation in Europe. While the technology is available, privacy legislation forms an impediment to its use. Everywhere they turn, consumers and companies are being warned of the dangers of sharing and using personal data. Such objections are less prevalent in China, which means the possibilities are greater. For example, some nursery schools in that country use a WeChat mini-app to send parents real-time updates about their children. People in China are also able to schedule an appointment with their GP via a chat app. For us, this is hard to imagine.

And finally, the goal of replacing the popular apps we are used to with an all-in-one solution like WeChat might be a touch overambitious. Apps such as Facebook Messenger, Snapchat and Instagram are so big in Europa that WeChat, or another new platform, would have a tremendous amount of catching up to do. What's more, there's a very real chance that any new app would be acquired by, for example, Facebook once it began to pose too large a threat. This happened previously with Instagram and WhatsApp.

Conversational commerce in Europe

Which is not to say that there's no room for any improvement whatsoever. Major corporations and SMEs in Asia and beyond have already discovered the commercial power of WeChat. In the Netherlands and Europe, however, we have yet to see any comparable options. We could start off here by adding direct messaging to customer service, for instance, as Suitsupply and KLM have already done. Or perhaps by integrating payment options. While there is plenty of work left to do, if we keep ease of use and technology in mind, we can continue to build solutions which are similar to the popular WeChat.