Commentary: Can China's superstar tech giants win over reluctant US customers?

Commentary: Can China's superstar tech giants win over reluctant US customers?

Huawei aside, WeChat and Alipay are growing fast but the trade war is unleashing a digital divide between East and West, says the Financial Times' Elaine Moore.

Labels of digital payment are displayed outside a boutique at a shopping mall in Hong Kong
Labels of digital payment (from top) VISA, WeChat Pay and Alipay are displayed outside a boutique at a shopping mall in Hong Kong, China July 31, 2018. REUTERS/Bobby Yip/Files

NEW YORK: A director at the University of California sent an alarming email this year warning students not to use messaging apps WeChat and WhatsApp when travelling to China.

The advice caused confusion. WhatsApp is blocked in China and messages are encrypted. (The email mentions an espionage case against a US citizen referring to WhatsApp but that was in Russia, not China.)

The more surprising part for me was the number of US students who came out in defence of WeChat. The Chinese app has a history of surveillance and while it can be difficult to get things done in China without it, the same is not true in the US. Its supporters just seemed to like having another chat app.

MORE USERS BUT WHERE ARE MY FRIENDS?

WeChat owner Tencent has been trying to add more international users since 2013, going so far as to hire football star Lionel Messi to advertise the brand. That means an English language version is available and verification is simple.

I signed up to see how useful it would be in the US. The only problem was that, even after rifling through my contacts, WeChat could find only a handful of connections. That felt tragic on an app with millions of global users.

One friend in China took pity and sent me a gif of a dog typing. I replied with a sticker of a happy rabbit. After that I was stumped.

My friend needs WeChat to function. The app facilitates her meetings, social life, food purchases and transport. In the US, these things are spread out over different apps.

With messages piling up on email, WhatsApp and Slack, I quickly forgot to open WeChat. The app is going to find it hard to expand in the US.

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MORE LUCK WITH ALIPAY

Alipay, the digital payment group owned by ecommerce giant Alibaba, could have more luck. Walking around the crab restaurants and pretzel stands on San Francisco’s tourist-heavy Pier 39, it is easy to spot a sky-blue Alipay logo.

Since arriving in the US in 2016, Alipay is now available in about four million locations thanks to a deal with local payment processor First Data.

FILE PHOTO: An Alipay logo is seen at a cashier in Shanghai
FILE PHOTO: An Alipay logo is seen at a cashier in Shanghai, China January 12, 2017. REUTERS/Aly Song/File Photo

I signed up easily enough but navigating the app as a foreigner is tricky. I didn’t realise how familiar I was with Uber, Airbnb and Twitter logos until I looked at a screen containing DiDi and Yu’e Bao.

Alipay also has a disconcerting habit of switching from English to Chinese characters, leaving me suddenly stuck. Theoretically, I can use my account to order food, make a peer-to-peer payment and store documents but I have no idea how.

NOT SO EASY

There are good reasons why China’s superstar tech companies are trying to make inroads in the US. Growth at home has slowed just as they reach the kind of size that makes it harder to find new users there.

But competition plus a trade war between the US and Chinese governments are equally good reasons why they are struggling. The same goes for US companies in China. A digital dividing line is being drawn up between east and west.

So far, the only Chinese company to really cross over is ByteDance, owner of video app TikTok. Short, silly videos turn out to transcend borders more easily than financial services and messaging platforms.

Last year it became the world’s most downloaded app (although ByteDance was fined last week by the Federal Trade Commission for allegedly collecting personal information from children).

TikTok
The logo of the application TikTok, a Chinese short-form video-sharing app. (File photo: AFP/JOEL SAGET)

READ: Tik Tok, the video app that embraces responsibility for user-generated content, a commentary

For Alipay and Tencent, Chinese tourists abroad are a big enough group to justify US expansion. An estimated 350,000 Chinese students are enrolled at US universities and tourism is booming. San Francisco’s travel association expects one in four tourist dollars spent there to come from Chinese visitors by 2020.

Meanwhile, there is still no popular app in the US that matches the sort of all-in-one shopping/payment/health/work/social portal offered in China. Using the Chinese apps, even clumsily, I could see how nice it would be to leave everything at home but your phone.

READ: With Grab’s super app ambitions, who will it eat for lunch? A commentary

But I would also think twice about handing over that much information to one company. The anti-tech backlash has left many of us suspicious about the sort of data we want to provide.

The moment for a US super-app has probably already passed.

Source: Financial Times/sl

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