Telegram and Signal, the encrypted services that keep conversations confidential, are increasingly popular. Our tech columnists discuss whether this could get ugly.
Requiring that app makers list the data they collect reveals a lot about what some apps do with our information (ahem, WhatsApp) but creates confusion about others.
The app has helped fuel democracy movements in Iran and Belarus but now faces scrutiny as extremists and conspiracy theorists flock to it amid crackdowns by Facebook and Twitter on disinformation.
WeChat continues to advance its shopping ambitions as the social networking app turns 10 years old. The Chinese messenger facilitated 1.6 trillion yuan (close to $250 billion) in annual transactions through its “mini programs,” third-party services that run on the super app that allow users to buy clothes, order food, hail taxis and more.
That is double the value of transactions on WeChat’s mini programs in 2019, the networking giant announced at its annual conference for business partners and ecosystem developers, which normally takes place in its home city of Guangzhou in southern China but was moved online this year due to the pandemic.
To compare, e-commerce upstart Pinduoduo, Alibaba’s archrival, saw total transactions of $214.7 billion in the third quarter.
WeChat introduced mini programs in early 2017 in a move some saw as a challenge to Apple’s App Store and has over time shaped the messenger into an online infrastructure that keeps people’s life running. It hasn’t recently disclosed how many third-party lite apps it houses, but by 2018 the number reached one million, half the size of the App Store at the time.
From Tencent’s strategic perspective, the growth in mini program-based transactions helps further the company’s goal to strengthen its fintech business, which counts digital payments as a major revenue driver.
A big proportion of WeChat’s mini programs are games, which the app said exceeded 500 million monthly users thanks to a boost in female and middle-aged users, as well as players residing in China’s Tier 3 cities, WeChat said.
The virtual conference also unveiled a set of other milestones from China’s biggest messaging app, which surpassed 1.2 billion monthly active users last year.
Among its monthly users, 500 million have tried the WeChat Search function. The Chinese internet is carved into several walled gardens controlled by titans like Tencent, Alibaba and ByteDance, which often block competitors from their services. When users search on WeChat, they are in effect retrieving information published on the messenger as well as Tencent’s allies like Sogou, Pinduoduo and Zhihu, rather than the open web.
WeChat said 240 million people have used its “payments score.” When the feature debuted back in 2019, there was speculation that it signaled WeChat’s entry into consumer credit finance and participation in the government’s social credit system. WeChat reiterated at this year’s event that the WeChat score does neither of that.
Like Ant’s Sesame Score, the rating system works more like a royalty program, “designed to build trust between merchants and users.” For instance, people who reach a certain score can waive deposits or delay payments when using merchant services on WeChat. The score, WeChat said, helped users save more than $30 billion in deposits a year.
WeChat’s enterprise version has surpassed 130 million active users. Its biggest rival, Dingtalk, operated by Alibaba, reached 155 million daily active users last March.
The one-day event concluded with the much-anticipated appearance of Allen Zhang, WeChat’s creator. Zhang went to great lengths to talk about WeChat’s nascent short-video feature, which is somewhat similar to Snap’s Stories. He didn’t disclose the performance of short videos because “the PR team doesn’t allow” him to, but said that “if we set a goal for ourselves, we will have to achieve it.”
Zhang also announced the WeChat team is weighing up an input tool for users. It’d be a tiny project given Tencent’s colossal size, but the project reflects Zhang’s belief in “privacy protection,” despite public skepticism about how WeChat handles user data.
“If we analyze [users’ chat history], we can bring great advertising revenue to the company. But we don’t do that, so WeChat cares a lot about user privacy,” asserted Zhang.
“But why do you still get ads [related to] what you have just said on WeChat? There are many other channels that process your information, not just WeChat. From there, our technical team said, ‘Why don’t we create an input tool ourselves?’”
The company faced a backlash from users who worried the changes made the messaging service less secure.
Quite a bit has happened since Snap announced last week that it was indefinitely locking President Trump’s Snapchat account. But after temporary bans from his Facebook, Instagram and YouTube accounts as well as a permanent ban from Twitter, Snap has decided that it will also be making its ban of the President’s Snapchat account permanent.
Though Trump’s social media preferences as a user are clear, Snapchat gave the Trump campaign a particularly effective platform to target young users who are active on the service. A permanent ban will undoubtedly complicate his future business and political ambitions as he finds himself removed from most mainstream social platforms.
Snap says it made the decision in light of repeated attempted violations of the company’s community guidelines that had been made over the past several months by the President’s account.
“Last week we announced an indefinite suspension of President Trump’s Snapchat account, and have been assessing what long term action is in the best interest of our Snapchat community. In the interest of public safety, and based on his attempts to spread misinformation, hate speech, and incite violence, which are clear violations of our guidelines, we have made the decision to permanently terminate his account,” a Snap spokesperson told TechCrunch.
Snap’s decision to permanently ban the President was first reported by Axios.
The encrypted messaging services have become the world’s hottest apps over the last week, driven by growing anxiety over the power of the biggest tech companies and privacy concerns.
Tracking what may be planned in the coming days could become even more difficult as the groups take to lesser-known networks and apps that can’t be easily monitored.
The White House took a surprise parting shot at China on Tuesday by banning the popular Chinese payment service and other applications.
Twitter is partnering with Snap to bring tweets into Snapchat with a native integration that both companies hope will push users away from screenshots and towards more interactive embeds.
Twitter users who are also logged into the Snapchat app on their phone will be able to access the functionality by tapping share on a particular tweet and navigating to the Snapchat icon where they’ll be able to share and react or comment on a Twitter post and send it to a friend or share on their story. The functionality will notably only work for tweets from public accounts, not protected ones.
The feature is rolling out on iOS for now, with Android integration “coming soon.”
Given how much content across Snapchat, Instagram, Facebook and Reddit originates from Twitter, it’s surprising that this functionality is arriving so deep into Twitter’s life as a company. They’ve long had a web embed integration which has allowed reporters to embed tweets into stories, but when it came to sharing on social media, Twitter’s strategy has deferred to the un-trackable and un-monetizable screenshot.
This has been low-hanging product rollout for Twitter which will likely be able to coax some non-Twitter users to enjoy content straight from the source, something the company has been vaguely alluding to in marketing campaigns over the years but is just now approaching with a direct integration into another company’s platform.
With Twitter now starting to roll out its Stories product Fleets to users, the company likely feels as though they have more feature familiarity to bring new users onboard from Snap who might not have experimented with the platform previously.
The truth is there aren’t a ton of integrations across social media channels, screen recordings and screen shots tell one platform’s story in an imperfect way on another’s. This integration comes as a result of updates made to Snap’s Snap Kit API and a particular feature called Creative Kit. Snap says that Spotify, Reddit, SoundCloud, Sendit, YOLO and GOAT have also created integrations that allow content from those apps to be shared across Snapchat.
Twitter didn’t rule out the expansion of this feature to other platforms in the future.
“This agreement with Snap was focused on this feature,” a Twitter spokesperson told TechCrunch. “We would love to partner with other platforms to enable people to share Tweets more widely. We hope this will be the first of many integrations of its kind.”
The U.S. and states cases against the social network are far from a slam dunk because the standards of proof are formidable.
Regulators are accusing the company of buying up rising rivals to cement its dominance over social media.
After taking on TikTok with music-powered features last month, Snapchat this morning is officially launching a dedicated place within its app where users can watch short, entertaining videos in a vertically scrollable, TikTok-like feed. This new feature, called Spotlight, will showcase the community’s creative efforts, including the videos now backed by music, as well as other Snaps users may find interesting.
Snapchat says its algorithms will work to surface the most engaging Snaps to display to each user on a personalized basis.
To do so, it will rank the Snaps in the new feed using a combination of factors, like how many other people found a particular Snap interesting, how long people spent watching it, if it was favorited or shared with friends, and more. The algorithms will also consider negative factors, like if a viewer skipped watching the Snap quickly, for example. Over time, the feed will become tailored to the individual user based on their own interactions, preferences, and favorites. This is a similar system to what TikTok uses for its “For You” feed.
However, on TikTok, only users with public profiles can have their videos hit the “For You” feed. Spotlight, meanwhile, can feature Snaps from users with both private or public accounts. These Snaps can be sent to Spotlight directly or posted to Our Story. The company says the Snaps from the private accounts will be featured in an unattributed fashion — that is, no name will be attached to the content. There will also be no way to comment on these Snaps or message the creator, Snapchat explains.
Users who are over 18 can opt in to public profiles in order to have their names displayed, which allows them to build a following. But while this allows users to private and directly reply to the creators, there are no public comment mechanisms on Spotlight.
That’s a different setup than on TikTok and gives Snapchat a way to avoid the much larger hassle of handling comment moderation.
The Spotlight feed itself, though, is moderated. The company says all Snaps that appear on the new feed will have to adhere to Snapchat’s Community Guidelines, which prohibit the spread of false information (including conspiracy theories), misleading content, hate speech, explicit or profane content, bullying, harassment, violence, and other toxic content. The Snaps must also adhere to Snapchat’s new Spotlight Guidelines, Terms of Service, and Spotlight Terms.
The Spotlight Guidelines specify what sort of content Snapchat wants, the format for the Snaps, and other rules. For example, they state the Snaps should be vertical videos with sound up to 60 seconds in length. They should also include a #topic hashtag and should make use of Snapchat’s Creative Tools like Captions, Sounds, Lenses or GIFs, if possible, The Snaps have to be appropriate for a 13+ audience, as well.
Captions are a new feature, designed for use in Spotlight. Also new is a continuous shooting mode for longer Snaps and the ability to trim singular Snaps.
The Snaps can also only use the licensed music from Snapchat’s own Sounds library and must feature original content, not content repurposed from somewhere else on the internet . That could limit accounts that repost internet memes, which tend draw large subscriber bases on rival platforms, like Instagram and TikTok.
In addition, Snaps in Spotlight won’t disappear from being surfaced in the feed unless the creator chooses to delete them.
Users will be alerted to the new Spotlight feature when they return to Snapchat following Monday’s launch. Afterward, they’ll be able to take Snaps as usual then choose whether they want to send them to their friends, to their Story, to Snap Map, or now to Spotlight.
The feed itself will be accessible through a prominent new fifth tab on the Snapchat home screen’s main navigation, and is designated with a Play icon.
To encourage users to publish to Spotlight, the company will distribute over $1 million USD every day to Snapchat users (16 and up) who create the top Snaps on Spotlight. This will continue through the end of 2020. The earnings will be determined by Snapchat’s proprietary algorithm that rewards users based on the total number of unique views a Snap gets per day (calculated using Pacific Time), as compared with others on the platform.
The company says it expects many users to earn money from this fund each day, but those with the most views will earn more than others. It will also monitor this feed for fraud, it warns.
With the music licensing aspects already ironed out, Snapchat is now looking to leverage the over 4 billion Snaps created by its users every day to power the new Spotlight feed. This move represents Snapchat’s biggest attempt at taking on TikTok to date — and one that it’s willing to kickstart with direct payments, too. That will likely encourage plenty of participation among Snapchat’s young user base, given they’re already using the app on a regular basis. And once posting to Spotlight becomes a habit, Snapchat could have a viable competitor on its hands, at least among the younger demographic that favors its app.
Its biggest disadvantage, of course, is that it has struggled to reach beyond its young user base. That’s something TikTok has done better with, by comparison. The Wall St. Journal last week noted that TikTok teens were often following accounts from senior citizens, for instance, and the AARP had earlier reported TikTok had attracted a middle-aged crowd, as well.
Snapchat says Spotlight is live today on both iOS and Android in the U.S., Canada, Australia, New Zealand, the U.K., Ireland, Norway, Sweden, Denmark, Germany, and France, with more countries to come soon.
Facebook today is rolling out an updated version of its Messenger Kids app with the goal of making it easier for kids to interact with their friends and family, navigate the app, and personalize their experience with features like custom chat bubble colors. The redesign also gives the kid-friendly app a look-and-feel that’s more like Messenger itself.
The updated app does away with the larger, colorful blocks that would flash when messages arrive for a more traditional messaging app design where chats are stacked in a vertical list. The child’s unread messages, now at the top of the inbox, are in bold with a blue dot next to them to call the eye’s attention. Media and message previews have also been added, too, allowing kids to more easily see updates for their conversations.
The redesign introduces new navigation with two dedicated “Chat” and “Explore” navigation tabs at the bottom of the screen, allowing for kids to switch between their conversations and the other in-app activities the app provides, like its mini-games
And with a new swipe gesture, kids can start a call from their inbox.
Finally, the update introduces a new option to personalize conversations, including both individual and group chats, with a custom chat bubble color.
Facebook refers to the update as a “test,” but the changes here are not small tweaks to the layout, navigation or feature set — they’re a revamp. That makes it less likely that this is just some experiment that will later be rolled back based on user feedback. Instead, by referring to it as a test, Facebook gives itself more time before committing to a global rollout.
The company says the new features will first roll out to kids using iPhones in the U.S. and Canada. The update will later expand to other devices and markets in the months ahead.
The changes arrive shortly after Messenger itself received a significant update of its own, which included a visual makeover and new features, including support for chat themes, custom reactions, selfie stickers and vanish mode, in addition to support for cross-app communication with Instagram users. Those updates could have led to the Messenger Kids makeover as well, given there’s likely some underlying messaging infrastructure that’s shared here.
The Messenger Kids app has been steadily updated in the years since its launch, most recently with a big explainer on what Facebook is doing with all that data it’s collecting.
Parents should be aware this app today collects a lot of personal information, including names, profile photos, demographic details (gender and birthday), a child’s connection to parents, contacts’ information (like most frequent contacts), app usage information, device attributes and unique identifiers, data from device settings (like time zones or access to camera and photos), network information and information provided from things like bug reports or feedback/contact forms. While some of this does allow the app to properly function, there’s also concern from some parents about how this data is really being used.
It’s called Fleets, and will allow users to post messages that vanish after 24 hours.
Hello hello, and welcome back to Week in Review. Last week, I wrote about the possibility of a pending social media detente, this week I’m talking about a rising threat to Facebook’s biz.
If you’re reading this on the TechCrunch site, you can get this in your inbox here, and follow my tweets here. And while I have you, my colleague Megan Rose Dickey officially launched her new TechCrunch newsletter, Human Capital! It covers labor and diversity and inclusion in tech, go subscribe!
The Big Story
First off, let me tell you how hard it was to resist writing about Quibi this week, but those takes came in very hot the second that news dropped, and I wrote a little bit about it here already. All I will say, is that while Quibi had its own unique mobile problems, unless Apple changes course or dumps a ton of money buying up content to fill its back library, I think TV+ is next on the chopping block.
This week, I’m digging into another once-maligned startup, though this one has activated quite the turnaround in the last two years. Snap, maker of Snapchat, delivered a killer earnings report this week and as a result, investors deemed to send the stock price soaring. Its market cap has nearly doubled since the start of September and it’s clear that Wall Street actually believes that Snap could meaningfully increase its footprint and challenge Facebook.
The company ended the week with a market cap just short of $65 billion, still a far cry from Facebook $811 billion, but looking quite a bit better than it was in early 2019 when it was worth about one-tenth of what it is today. All of a sudden, Snap has a new challenge, living up to high expectations.
The company shared that in Q3, it delivered $679 million in reported revenue, representing 52% year-over-year growth. The company currently has 249 million daily active users, up 4% over last quarter.
Facebook will report its Q3 earnings next week, but they’re still in a different ballpark for the time being, even if their market cap is just around 12 times Snap’s, their quarterly revenue from Q2 was about 28 times higher than what Snap just reported. Meanwhile, Facebook has 1.79 billion daily actives, just about 7 times Snapchat’s numbers.
Snap has spent an awful lot of time proving the worth of features they’ve been pushing for years, but the company’s next challenge might be diversifying their future. The company has been flirting with augmented reality for years, waiting patiently for the right moment to expand its scope, but Snap hasn’t had the luxury of diverting resources away from efforts that don’t send users back to its core product. Some of its biggest launches of 2020 have been embeddable mini apps for things like ordering movie tickets or bite-sized social games that bring even more social opportunities into chat.
Snap’s laser focus here has obviously been a big part of its recovery, but as expectations grow, so will demands that the company moves more boldly into extending its empire. I don’t think Snapchat needs to buy Trader Joe’s or its own ISP quite yet, but working towards finding its next platform will prevent the service from settling for Twitter-sized ambitions and give them a chance at finding a more expansive future.
Trends of the Week
These next few weeks are guaranteed to be dominated by U.S. election news, so enjoy the diversity of news happenings out there while it lasts…
Quibi is dead
Few companies that have raised so much money have appeared quite dead-on-arrival as Jeffrey Katzenberg’s mobile video startup Quibi. This week, the company made the decision to shut down operations and call it quits. More here.
Pakistan unbans TikTok
It appears that the cascading threat of country-by-country TikTok bans has stopped for now. This week, TikTok was unblocked in Pakistan with the government warning the company that it needed to actively monitor content or it would face a permanent ban. Read more here.
Facebook Dating arrives in Europe
Facebook Dating hasn’t done much to unseat Tinder stateside, but the service didn’t even get the chance to test its luck in Europe due to some regulatory issues relating to its privacy practices. Now, it seems Facebook has landed in the tentative good graces of regulatory bodies and has gotten the go ahead to launch the service in a number of European countries. Read more here.
Until next week,
On family WhatsApp groups and in Spanish-language media, misinformation paints 2020 as a zero-sum game.
Trump administration officials claim the Chinese-owned app presents a security risk to American users.
Facebook began integrating its Instagram and Messenger apps, allowing users of the services to directly communicate with each other.
The company said the “performance issues we’ve been seeing should be mostly resolved” but users may continue to see errors this morning on the popular workplace messaging service.
A federal judge’s preliminary injunction means the app stores can continue offering the video app for downloads for now.
The order is a setback in the president’s efforts to block a Chinese social media app that he has labeled a national security threat. The ban had been set to go into effect on Sunday night.
He says that they are a security threat. If so, it is time to show the world the evidence.
When downloads of the Chinese-owned messaging service are barred in the U.S. starting at midnight on Sunday, the feud between the countries will hit home for millions of people.
There’s no such thing as remote restaurant work. But there is HotSchedules.
The Commerce Department announced that it was prohibiting downloads of WeChat and TikTok in U.S. app stores. Here’s what you need to know.
If you’re overwhelmed from telecommuting for months, here are ways to step away from your devices and, just maybe, get to inbox zero.
A vital connection for the Chinese diaspora, the app has also become a global conduit of Chinese state propaganda, surveillance and intimidation. The United States has proposed banning it.
No company is completely insulated from the macroeconomic fallout of COVID-19, but we are seeing some companies fare better than others, especially those providing ways to collaborate online. Count Atlassian in that camp, as it provides a suite of tools focused on working smarter in a digital context.
At a time when many employees are working from home, Atlassian’s product approach sounds like a recipe for a smash hit. But in its latest earnings report, the company detailed slowing growth, not the acceleration we might expect. Looking ahead, it’s predicting more of the same — at least for the short term.
Part of the reason for that — beyond some small-business customers, hit by hard times, moving to its new free tier introduced last March — is the pain associated with moving customers off of older license revenue to more predictable subscription revenue. The company has shown that it is willing to sacrifice short-term growth to accelerate that transition.
We sat down with Atlassian CRO Cameron Deatsch to talk about some of the challenges his company is facing as it navigates through these crazy times. Deatsch pointed out that in spite of the turbulence, and the push to subscriptions, Atlassian is well-positioned with plenty of cash on hand and the ability to make strategic acquisitions when needed, while continuing to expand the recurring-revenue slice of its revenue pie.
The COVID-19 effect
Deatsch told us that Atlassian could not fully escape the pandemic’s impact on business, especially in April and May when many companies felt it. His company saw the biggest impact from smaller businesses, which cut back, moved to a free tier, or in some cases closed their doors. There was no getting away from the market chop that SMBs took during the early stages of COVID, and he said it had an impact on Atlassian’s new customer numbers.
Still, the company believes it will recover from the slow down in new customers, especially as it begins to convert a percentage of its new, free-tier users to paid users down the road. For this quarter it only translated into around 3000 new customers, but Deatsch didn’t seem concerned. “The customer numbers were off, but the overall financials were pretty strong coming out of [fiscal] Q4 if you looked at it. But also the number of people who are trying our products now because of the free tier is way up. We saw a step change when we launched free,” he said.
TikTok might not be winning over President Trump, but it sure beats its Instagram copycat for making and sharing short videos.
The all-purpose app, which the administration is restricting along with TikTok, is how many Chinese living abroad stay in touch with each other, and with people back home.
The government cited national security concerns in announcing sweeping restrictions on two popular Chinese social media networks, a move that is likely to be met with retaliation.
Workplace instant messaging platform Slack has filed an antitrust complaint against Microsoft in the European Union accusing the tech giant of unfairly bundling its rival Teams product with its cloud-based productivity suite.
A spokeswoman for the Commission’s competition division confirmed receipt of a complaint, telling us via email: “We confirm that we received a complaint by Slack against Microsoft. We will assess it under our standard procedures.”
We’ve also reached out to Microsoft and Slack for comment.
Per the FT, which has a statement from Slack, the company is accusing Microsoft of illegally abusing its market power by tying its competing product, Teams, to its dominant enterprise suite, Microsoft 365.
“Microsoft has illegally tied its Teams product into its market-dominant Office productivity suite, force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers,” Slack said in the statement.
In further comments to the newspaper, Slack executives said they’re asking EU regulators to move quickly to “to ensure Microsoft cannot continue to illegally leverage its power from one market to another by bundling or tying products”.
Slack told the newspaper it wants the Windows maker to be forced to sell Teams separately to Microsoft 365 at a separate price, rather than bundling it with the existing suite and absorbing the cost.
The complaint is not a surprise given Microsoft and Slack have been at odds for years, ever since the Redmond-based software giant announced its Teams product back in 2016. At the time Slack took out a newspaper advertisement sardonically mocking Microsoft and welcoming the competition. In the ensuing years, Microsoft’s Teams product has also grown from also-ran to legitimate competitor.
Teams most recently announced that it had reached 75 million daily active users (DAU) in April of this year, a gain of 70% from a March number of 44 million DAUs. Like many remote-work friendly products and services, Slack and Teams have seen usage gains in the wake of COVID-19 and its economic disruptions. (Both services are also rolling out new features, combating for media attention, user mindshare, and new customer accounts).
Slack’s last shared DAU number that TechCrunch could find came from March, when Slack’s CEO reported 12.5 million daily actives.
Microsoft’s competing Teams product has managed to transition from dismissed upstart, to rival, to perhaps leading competitor in the space of a few years — but with the advantage of being bundled with a dominant office suite product. Slack’s business is still growing nicely, but with the power of Microsoft’s enterprise sales channel stapled to its growing Microsoft 365 product suite, it’s not surprising to see Slack seek regulatory relief against the larger company.
Whether you agree with Slack’s antitrust take, the move is likely good business. Slack’s shares dropped after its most recent earnings report after its growth and future guidance failed to meet investor expectations (in fairness, Slack did grow 50% on a year-over-year basis, even if Wall Street was unimpressed). If Microsoft’s Teams product is eating into its famed business expansion, Slack could see its share price suffer further. So, heading off Microsoft in a region famed for active government intervention into business appears savvy.
EU competition chief Margrethe Vestager is famed for her relative alacrity in grappling with complex digital cases. Though her record when judged by outcomes remains contested.
Also noteworthy: EU lawmakers are consulting on whether to give regional antitrust regulators greater powers to intervene in digital markets when they suspect a market might be being tipped unfairly in favor of one player.
For long time tech watchers, Microsoft being accused of unfairly bundling in the EU will of course bring back plenty of memories. Although, most recently, the tech giant has been making hay out of Apple being put under formal antitrust probe in the region — with president Brad Smith claiming in a Politico video interview last month that Cupertino’s app store walls are “higher” and “more formidable” than anything it threw up in years past.
Reminder: All the way back in 2004 EU antitrust regulators slapped Microsoft with the (then) biggest ever fine — around a half billion euros — for abusing a near monopoly position with its desktop OS, Windows, to try to crush competitors in the digital media player and low end server market. So, er…
Taylor Lorenz spends most of her days reporting on the ways we use the internet. Here’s how she does it.
Affected users might see that WhatsApp is “connecting” to the service when trying to send a message. The outage started at about 4pm ET. We don’t know much more at this stage.
A spokesperson for Facebook did not immediately comment on the outage. We’ll update when we know more.
WhatsApp hit the 2 billion user mark earlier this year. Facebook bought WhatsApp for $19 billion in 2014 in what became one of the social media giant’s biggest purchases.
Some of you may recall the South Korean app Zepeto that went viral among Gen Z users a year and a half ago. The app, which renders selfies into animated avatars and lets people adorn their computer-generated manifestations with virtual items, appears to have sustained its relevance. It has amassed 150 million registered users, the company told TechCrunch recently, although its number of monthly active users, which is a better metric to gauge an app’s performance, hovers around 10 million.
China is by far the largest market for Zepeto, locally known as Zaizai (崽崽), an affectionate nickname for children. “Zaizai aspires to develop into a comprehensive ecosystem while also offering robust content across China,” affirmed CEO Daewook Kim.
It’s not uncommon for a popular photo-editing tool to fade out as people move onto the next trending alternative, either because the new player arrives with more impressive visual capabilities or its marketing stunt creates a spell on many — or both. As such, apps that are disposable and serve utility purposes often have to think hard about retaining their users or engage aggressively to monetize them while the going is still good.
Zepeto did both.
The app includes a social networking function where users can interact anonymously through their avatars in virtual spaces akin to The Sims. The challenge with that, of course, is building a big enough network that lures people to keep returning.
Zepeto also comprises of a series of mini games that are evocative of what Lee described as peaceful exploration people are enjoying in red-hot Animal Crossing.
In other words, the business is ripe for selling virtual items. Indeed, the leader in this category of business, Tencent, once generated the bulk of its income from the items it sold to decorate users’ virtual profiles and spaces, a business modeled on the South Korean internet pioneer Cyworld. That was before Tencent earned a wider global reputation by building WeChat and operating blockbuster video games.
Zepeto has so far generated some $10 million from 600 million pieces of virtual items sold. It stepped up the effort recently by launching a creative marketplace where third-party artists can offer their virtual lines of clothes and accessories. Called Zepeto Studio, the store clocked around $700,000 in sales in its first month. Many add-ons are branded — a common strategy for photo-enhancement apps — so you can sport things like virtual Nike apparel.
“We’ve partnered with global brands like Disney and Nike, as well as celebrities like BTS. We hope to continue to bring exciting partnerships to Zaizai Studio as well as better service to our creators,” said Rudy Lee, head of Zepeto’s global business, adding that the Studio feature for China is scheduled to launch mid-May.
If enough people keep using Zepeto, the third-party store can be a lucrative pursuit for designers. Among Zepeto’s 60,000 registered artists, the highest-paid creator pocketed some $9,000 in sales in the first month.
But as numbers grow, Zepeto is also getting cautious about keeping its marketplace civil. The firm maintains an internal moderation team that weeds out “political messaging, hate speech, or discriminatory messaging on the virtual clothes,” said Lee. The rule is particularly pertinent to its development in China where the flow of information is strictly controlled.
Another way to survive as a utility tool is to piggyback off another app’s success. We have written about the way PicsArt, a photo-editing app that rivals VSCO, managed to stay in the game by supporting TikTok-inspired stickers. Zepeto has taken notice. Many of its users are now sharing their animated avatars on Douyin, the Chinese edition of TikTok, observed Lee.
A retired C.I.A. officer sees danger ahead for the independence and political impartiality of the 17 U.S. intelligence agencies if Trump’s choice for director of national intelligence is confirmed.
It was the largest bet by the social network on the developing market, where millions of people have gone online in recent years.
Vor zwei Jahren bereits angekündigt, jetzt ist der „Dark Mode” da. Wir zeigen, wie Sie WhatsApp in wenigen Schritten „verdunkeln“.
Foto: S. Schirmer