It’s impossible to imagine cell phones these days without chat apps. Trend investors Jack Neele and Richard Speetjens think they will have more and more uses. “Asia is at the forefront, using chat services for e-commerce, to order tickets or a taxi, for instance.” Investors are focusing more and more on the potential of messaging services.
“So they've done it after all,” complained a WhatsApp user on social media. The chat service had just announced that it would open up its network to businesses, thus allowing advertisements. According to Whatsapp, business service messages are an example of the new applications. These could be used by an airline, for instance, to inform passengers of a delay or by a bank to notify customers of suspicious account activity. However, it is also possible to send messages directly that contain special offers or promotions.
Until recently, the chat app banned business and commercial use of its service, and it continued to do so, even after Facebook acquired it two years ago for USD 19 billion. Users were afraid of being bombarded by advertisements.
“It's no surprise that WhatsApp is being used for more than just messaging. In Asia, chat apps have already evolved to be used for e-commerce in order to make a profit. Chinese app WeChat can be used to buy movie tickets, make restaurant reservations or order a taxi. KaoTalk from South Korea and and the Japanese Line can also do more than send messages”, says Jack Neele, manager of Robeco Global Consumer Trends Equities.
“Where the US normally leads the way in technological developments, they are lagging behind Asia when it comes to chat services. Two years ago, Facebook founder Mark Zuckerberg surprised everyone with his multi-billion dollar acquisition of WhatsApp, but he recognized the potential of such applications early on.”
“Chat apps are a growth segment in the Internet market. Tencent accounts for 50% of China's mobile Internet traffic, most of which comes from the company's app WeChat. Earlier this year, Line went public for USD 1.14 billion making it this year's biggest technology public offering to date.”
Chat apps are an interesting option for commercial use due to their tremendous reach. Earlier this year, WhatsApp recorded its one billionth user, making it the world's most popular chat app. With 900 million users, Facebook Messenger is a close second. Snapchat has 200 million users. With 700 million users, WeChat is a major player in China. Most of Line's 218 million users come from Japan, Taiwan, Thailand and Indonesia. KakaoTalk (unlisted) has over 100 million users.
Investors are focusing more and more on the commercial potential of chat apps. Speetjens: “Investors are interested in what further potential chat apps may have in addition to just sending free text messages, photos and videos clips. They are curious as to how these Internet companies will be able to make money with them.”
‘All-in-one app is the wave of the future’
Increasingly clear which chat service will come out on top Facebook Messenger and WhatsApp are the leaders in Europe and the US and WeChat in China. "Their huge lead over the rest makes them almost untouchable", says Neele. “Apple has a reasonably solid position with iMessage, but it is not a leader. In terms of electronic payments, it does have a real advantage with ApplePay.”
Internet giants such as Google and Alibaba are the large companies which lack popular chat services. Speetjens: “Google Hangout was a flop. Alibaba is aimed more at e-commerce and cloud-based services. Snapchat is still the only independent messaging service.”
Neele and Speetjens expect to see more and more services integrated into a single app. And not just because this will be profitable. They think smartphone users are starting to show signs of 'app fatigue'. They don't want to download a separate app anymore and create login credentials again for each new service. An all-in-one solution is the wave of the future.”
The content displayed on this website is exclusively directed at qualified investors, as defined in the swiss collective investment schemes act of 23 june 2006 ("cisa") and its implementing ordinance, or at “independent asset managers” which meet additional requirements as set out below. Qualified investors are in particular regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes and central banks, regulated insurance companies, public entities and retirement benefits institutions with professional treasury or companies with professional treasury.
The contents, however, are not intended for non-qualified investors. By clicking "I agree" below, you confirm and acknowledge that you act in your capacity as qualified investor pursuant to CISA or as an “independent asset manager” who meets the additional requirements set out hereafter. In the event that you are an "independent asset manager" who meets all the requirements set out in Art. 3 para. 2 let. c) CISA in conjunction with Art. 3 CISO, by clicking "I Agree" below you confirm that you will use the content of this website only for those of your clients which are qualified investors pursuant to CISA.
Representative in Switzerland of the foreign funds registered with the Swiss Financial Market Supervisory Authority ("FINMA") for distribution in or from Switzerland to non-qualified investors is ACOLIN Fund Services AG, Affolternstrasse 56, 8050 Zürich, and the paying agent is UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zürich. Please consult www.finma.ch for a list of FINMA registered funds.
Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco/RobecoSAM AG product should only be made after reading the related legal documents such as management regulations, articles of association, prospectuses, key investor information documents and annual and semi-annual reports, which can be all be obtained free of charge at this website, at the registered seat of the representative in Switzerland, as well as at the Robeco/RobecoSAM AG offices in each country where Robeco has a presence. In respect of the funds distributed in Switzerland, the place of performance and jurisdiction is the registered office of the representative in Switzerland.
This website is not directed to any person in any jurisdiction where, by reason of that person's nationality, residence or otherwise, the publication or availability of this website is prohibited. Persons in respect of whom such prohibitions apply must not access this website.