Book reviews: ‘Influence Empire’ and ‘The First Superapp’ about Tencent and WeChat

When I was living in China in 2012, I installed WeChat on my phone. Previously I had already been using QQ messenger on my laptop to communicate with friends and my colleagues in the Chinese NGO in Xi’an I was working for. Even though sitting across from each other, some people seemed to prefer communicating through QQ over actually talking. Both QQ and WeChat were products of the Chinese company Tencent, one of the first internet companies to be founded in the late 1990s. Since 2012 I have been writing many articles and giving lectures about the way WeChat turned from a chat app into a super app that has become indispensable in everyday life in China.

Recently, two new books were published on this topic: one about Tencent in general (Influence Empire by Lulu Yilun Chen) and one specifically about WeChat (The First Superapp by Kevin Shimota). Despite being well informed about WeChat, I picked up a copy of both, hoping to learn something new. Here’s my findings.

Influence Empire – Lulu Yilun Chen

Lulu Yilun Chen is a reporter for Bloomberg, she has been writing about the Chinese tech scene since 2012 and has interviewed several key players in the story around one of China’s most successful tech companies, Tencent. She has now collected and expanded on her writings in Influence Empire.

Chen’s book consists of two parts: ‘Origins’ and ‘Tencent Unbound’. The first part, consisting of 3 chapters, tells the background story of Tencent’s founder Pony Ma and their early products, among which QQ instant messenger. I learned most new things from this first part, which described the pre-WeChat period before I started following the company: how QQ was made into a success while battling Microsoft’s MSN messenger and how QQ would later fertilise many other Tencent products.

The second part, consisting of the remaining 9 chapters, describes Tencent’s battles with Alibaba, Tencent’s investments in local services company Meituan and ride-hailing company Didi, WeChat, the desktop and mobile gaming activities and clashes with the government. Since the second part covers almost 80% of the book I wonder if it was really necessary to split it in two sections or if a ‘third act’ should have been used. I also think the book would have been chronologically more logical if it had discussed the WeChat launch before the chapters on Alibaba and Meituan.

As mentioned, this is not just a book about Tencent. You can’t really tell the story of Pony Ma’s company without explaining rival Jack Ma’s Alibaba and their stakes in Meituan and Didi in detail. This takes up about more than a third of the book but gives the reader a better understanding of the Chinese internet scene, just like Kai-fu Lee did in AI Superpowers (link in Dutch).

Besides its social network and messaging apps, Tencent has also been known as one of the biggest companies in video games. It’s part of the company I’m less familiar with so it’s part of the book I learned quite a few new things from. Having said that, going through some 50 pages of video game companies and game titles without being an avid player of ‘battle royal’ was a bit of an attention span challenge for me. 

Although quite essential to the story, I would have gladly given up some level of detail in these two sections that make up half of the book and learn a bit more about WeChat or things I’ve always been curious about. While I think Influence Empire is an invaluable source of information for those that are not very familiar with Tencent, it doesn’t offer many revelations for a long time China tech watcher. I would for instance have loved to learn more about how data gathering is split between Tencent, its partners and companies running mini programs on the platform. Or how the monetization of the WeChat wallet works.

There’s just so much detail you can fit into 232 pages, but I do think some bits of the story are missing. There’s little to no information on how Alibaba and the telecom companies that saw income from SMS evaporate tried to battle Tencent with their own chat apps (Laiwang, Feixin, etc) or how the telecom companies tried to have Tencent compensate for their loss of income. There’s nothing about QZone or Tencent’s attempt to create a microblog platform with Tencent Weibo, only to lose out to Sina. There’s nothing about Tencent’s ventures into New Retail (link in Dutch) either. 

Although the book discusses the censorship on WeChat, it fails to mention how the government actually preferred WeChat over Weibo since it was a much more closed, living room-type of network compared to Sina’s very open platform and how things were less likely to go viral very quickly on WeChat. The book also does not shed any new light on the question if spying by the government on user messages and behaviour is anecdotal or systematic. Finally, when discussing the future of Tencent, little is said about the government’s desire to have the country’s platforms play a role in digitising the industrial sector, as laid out by the NDRC. As such, the book is packed with detail but is also missing a lot of interesting topics. I would have gladly paid for 50 more pages or so to have these and other topics added.

At one point the text claims that in 2010 QQ might lose 800 users to Qihoo. This is of course impossible since in 2010 there were only 457 million Chinese online. Besides that rare flaw the whole book is very well researched and reads very comfortably, reminding me at times of Matthew Brennan’s Attention Factory (link in Dutch). Unlike that book however, there are no illustrations in Chen’s book. Based on my own experience, presenting for audiences that have never used Tencent’s products, I think that’s a bit of a missed opportunity. Something as simple as screenshots of WeChat or the many video games discussed could make them a lot more tangible to the average reader.

As in some of her writing for Bloomberg, Chen gets a bit speculative at the end of the book when she goes into the ‘crackdown’ on China’s tech giants. I don’t really subscribe to her opinion that the rectification (link in Dutch) of Ant Group and Alibaba Group can all be traced back to a revenge on Jack Ma, thereby ignoring how much of the legislation was already in the pipeline and how much of it was justified. Despite this, Influence Empire is a professionally researched, highly interesting read, especially for those less familiar with the Chinese digital tech sector. 

Rating: 8/10

The First Superapp – Kevin Shimota

Kevin Shimota worked at Tencent’s WeChat division for 4 years. Judging from the cases in the book he was mostly working on projects involving strategic partnerships with overseas businesses in the tourism sector, trying to roll out WeChat Pay to foreign countries. The latter was not so much targeted at giving western consumers a new payment tool but at giving Chinese tourists an easy payment option while travelling abroad (link in Dutch).

The book consists of 4 sections that discuss the uniqueness of China’s internet, the WeChat story, the mobile payment revolution and superapps in and beyond China. The book is at its best in the second and third section when it describes how WeChat and mobile payment developed. Unlike Chen’s book it comes with diagrams and illustrations that make things clearer for those who are not familiar with the app. It also does a very decent job at describing the functionalities without getting bogged down in too many details. The explanation of WeChat’s closed-loop is also very valuable, even though it doesn’t really explain how businesses really measure ‘exactly how effective their marketing efforts are in generating real revenue’.  

I find the book a whole lot less convincing in the first and last section. The first section tries to convince the reader that the success of WeChat is largely based on the closed off characteristics of China’s internet because of language, culture, government and scale. Although these differences exist, I’m personally not convinced that WeChat could not have happened without them and therefore find the reasoning in this part of the book rather weak.

In the closing section on superapps, the text gets very repetitive when it sums up all the characteristics and success factors of superapps. It also makes it sound like Tencent was following a clear roadmap, while I think they were making things up as they went along. 

Shimota defines superapps as apps that are ‘effectively able to replace every other app on your phone, and then on top of that, provide new value that you didn’t have before’. Using this description, I would argue that WeChat is the only real supperapp and that even AliPay and Meituan are not truly superapps since they focus on commerce but lack other functionalities like good social networks. As such it is a bit strange that Shimota spends a good part of the book trying to give a blueprint about what companies need to do to make a superapp, as if replicating WeChat’s success is relatively easy. So far, nobody has been able to do that, not even Facebook. Shimota even claims that ‘hundreds of companies and organisations worldwide [are] simultaneously working on emulating the accomplishments of WeChat and Chinese superapps’. I wonder who these companies are, or if this is just consultancy talk to create FOMO. 

The best part of the fourth section is the chapter in which Shimota describes cases of companies teaming up with WeChat Pay, especially the Starbucks case. It’s a shame though that this case fails to mention that Starbucks just as easily teamed up with Alibaba and in later years. The other cases come mostly from Shimota’s own experience with tourism boards and tourist attractions, which unfortunately limits the scope of case studies a bit. 

Considering that Shimota had a front-row seat at the later stages of development of WeChat, his book The First Superapp offers few revelations. Most of the information he shares has already been widely published. If you are well informed about WeChat, you won’t find any of your burning questions answered. There are no further details on WeChat’s failed expansion to the west. There are no insights about what data of official accounts and mini programs actually ends up in the hands of Tencent (compared to the business running them). There’s not even information on how Tencent monetized WeChat beyond stickers as Shimota does not share any information on Tencent’s cut in the mobile payments. 

Strange enough, the book also fails to mention how crucial moving QQ users to WeChat was for its success, or how important local smartphone brands like Xiaomi were for the penetration of smartphones and mobile internet. It also makes no mention whatsoever of censorship on WeChat or the walled gardens that were created by exclusive payment methods. It seems Shimota clearly steers away from any form of criticism one could have of his former employer.

At times, the text comes across as illogical, like when it says: ‘Chinese people might be able to live without their smartphone, but they cannot live without WeChat’. Or claiming that Huawei took steps into the ‘consumer-to-consumer (C2C) world of smartphones’. Or mentioning bike rental companies Mobike and Ofo ‘appearing in cities worldwide at the corner of every street in every capital’. Sometimes the information is downright incorrect or inconsistent, like when it claims Google never censored its search engine in China. Or when it claims that competitors of WeChat would have ‘great difficulty replicating’ [mini programs]’, while stating one page further ‘in their first year (..) they generated industry copycats across many industries’. The claim that China skipped physical banking cards and the PC/desktop era is simply nonsense. When I lived in China in 2011-2013, I had a bank card I used to pay with at supermarkets and a token to do online banking on the PC. 

At times, the book is seriously dated, and I wondered if Shimota wrote most of the text many years ago. It mentions that Zuckerberg ‘recently’ announced it would begin a transformation to emulate WeChat. It quotes a source from 2018 and fails to mention this has never taken off. The book also mentions the long defunct RenRen platform in present tense. It uses an overestimated 2019 prediction by eMarketer about the payment by facial recognition market, which has since stagnated because of privacy concerns. The book mentions Alibaba as a major player in unmanned stores (link in Dutch), while that company never rolled them out after a few on-campus tests. When the book claims that cross-border payments with WeChat have accelerated it seems to ignore the Covid crisis of the past years that wrecked the tourism business. When mentioning that foreigners can add their credit cards to WeChat pay it doesn’t mention that few have been able to successfully do so, running into all kinds of problems when trying. It also falsely claims that official accounts can only send 4 messages per month (the subscription account version can send one per day).

Finally, some sections of the book are quite sloppy, with typos or redundant words in sentences, as if no proper editing or proofreading took place. 

To summarise, Shimota’s book is a fine guide if you want to learn about WeChat and mobile payment specifically. A lot has been written about this, but you’ll find it here conveniently collected in the second and third section of the book. As for the rest, I can’t highly recommend it and I’d advise you to do take things with a grain of salt if you buy yourself a copy.

Rating: 6/10