China’s Top Smartphone Vendors Forging Alliance to Contend Against WeChat Mini-programs

WeChat founder ZHANG Xiaolong once told media that WeChat mini-program is going to take over 80% of the existing market of traditional apps.

Image credit to Visual China. Modified by KrASIA.

Chinese top smartphone vendors are forging an alliance to promote “fast app” – an equivalent of WeChat’s mini-programs – in a bid to contend against Tencent‘s intrusion into their lucrative app store business.

The alliance includes Huawei, OPPO, Vivo and Xiaomi, among others. Those are the top 4 smartphone makers in China by market share according to a report by market intelligence firm IDC. They hold a total 66.3% market share in China, the IDC report states. Other members are Lenovo, Meizu, ZTE, Nubia, OnePlus and Gionee.

Just like WeChat mini-program, the so-called “fast app” is an HTML-based web app that could be used sans the need to download.

Xiaomi, China’s #4 smartphone vendor by market share according to IDC, told Reuters: “The alliance is aimed at enhancing user experience and is not targeting any particular company.” Xiaomi kicked off its fast app-like feature dubbed “Zhi Da (meaning direct access)” last year and claimed to have already over 100 such apps in its app store. Other smartphone brands, such as Gionee and Meizu, also have tested the water of download-free apps, but haven’t made such a splash as WeChat mini-program did.

Image credit to 123rf.com.cn.

HONG Feng, Xiaomi co-founder and head of MIUI, the Android-based mobile OS developed by the company, told media: “Fast app can reduce costs for app development and marketing, thus benefit developers to the greatest extent. Such apps will soon be available on over 1 billion cells.” The phone maker alliance will also standardize the format of fast apps, so that developers won’t have to make adjustments to suit different models.

Chinese smartphone market is notoriously fiercely competed. What drives these old enemies to join their hands is their shared benefit, or shared risk. The more success WeChat’s mini-programs, the fewer downloads in traditional app stores in a sense.

App Store business is an important part of smartphone vendors’ internet services which is a comparably lucrative revenue. For example, in 2016, when Xiaomi made 900 million in revenue, 21% was from internet service with a profit margin over 40%, while the profit margin for selling hardware was mere 2.8%. Last year, Internet services were estimated to contribute to more than 68% of Xiaomi’s total revenue.

Photo by Rami Al-zayat on Unsplash.

Officially launched in January 2017, leveraging on WeChat’s 800 million DAU, WeChat mini-programs have already a DAU of 170 million as of January 15, 2018.

In July last year, WeChat founder ZHANG Xiaolong told media that he hopes in the future 80% of Chinese mobile apps will be in the form of mini-programs, download-free and easy to use.

The ten companies have nearly 1 billion users, according to a joint statement by the smartphone vendors.

Editor: Ben Jiang