When Snapchat rejected a $3 billion acquisition bid from Facebook in 2013, most people in tech will tell you they thought Snapchat were the crazy ones.
But this is 2020, and Snapchat appears to have a footing in the tech world that no one thought possible several years ago. Now it’s poised to take on Facebook, Amazon and Apple, with a new space for micro-apps called Minis.
Success, says The Guardian, could turn Snapchat into the WeChat of the west. That’s a comparison that isn’t likely to go down well with Facebook, which has its own history with China by way of TikTok.
Social media aside, Facebook still has one of the biggest strangleholds on the future of global mobile commerce, but it’s up against very powerful forces.
The reason I’m telling you all this is that we’re living through one of the most exciting battles for supremacy the tech world has seen. Imagine Apple versus Microsoft but as a WWE Royal Rumble between western and eastern giants.
Where does Facebook sit in all this?
In June, WhatsApp (which Facebook acquired in 2014) launched frictionless mobile payments for Brazil, its second largest market with 120 million people. The update means Brazillians will be able to send money to users and businesses as they would a text.
Several months prior, Facebook invested $5.7 billion in India’s Jio Platforms, a mobile phone carrier belonging to Asia’s richest man. India, you may know, is WhatsApp’s biggest market with 200 million users. But Facebook’s spending spree doesn’t end in India.
On 2 June, the news broke that Facebook had invested an undisclosed amount in Gojek, the Indonesian equivalent of Uber. It’s a move that strengthens WhatsApp’s presence in Asia – and the world for that matter – exponentially. So who else is key?
The Chinese giants: Tencent and Alibaba
India aside, there is a growing grapple between the west and the east over mobile commerce, and at the forefront of that fight are Alibaba and Tencent. Of the two Alibaba is seen as more of a direct competitor to Amazon, but its social media capabilities make it just as relevant to Facebook and Instagram.
It’s Tencent’s WeChat, however, that’s created a blueprint for mobile commerce in the west. In China, it’s long been known that if you carry cash, you may struggle to buy anything – such is the country’s attitudes to mobile commerce.
But there are others too. While Tencent has long established itself, ByteDance (owner of TikTok) is also expanding into financial services, with the company looking to one of Singapore’s richest families for a banking license, following its proposed expansion in Hong Kong.
East versus west: who’s ahead?
If we’re talking plainly about mobile commerce, China is undoubtedly ahead. Its innovation boom happened quicker along with its transition to being mobile-first. It’s not the only area of commerce the east is ahead in either.
This year saw Facebook launch shopping features for live streams – but this is a technology that’s been popular in China for much longer (since 2016, in fact), to the point where Alibaba is looking to recruit international creators to bolster its efforts in Russia, Turkey and more. That’s not to say the western world isn’t catching up, with social commerce normalising mobile-first shopping on Instagram for millions.
But while we’ve covered Europe, Asia, South America and North America, there is one major continent we haven’t mentioned that’s just as crucial – Africa.
The fight for Africa
As we speak, the world’s biggest telecoms companies are building a subsea internet cable around Africa that will connect 16 countries with Europe and the Middle East. Facebook is involved in the $1 billion 2Africa project, as is the telecoms giant China Mobile.
The promise of greater connectivity certainly opens the door for a mobile-first payments ecosystem for Africa, where users can transfer money using WhatsApp Pay, just like in Brazil.
And that’s before we even mention Libra, Facebook’s controversial financial project, which has pledged to bring modern banking to the rural world. Still, WeChat and Alibaba, which already has a presence in Africa through various entrepreneurship programmes, may have something to say about a Facebook monopoly. They wouldn’t be the only ones, with government attitudes towards Facebook very icy.
Because of the threat it poses to old money banks, early backers like VISA and PayPal have had to pull away from Libra and Facebook’s new crypto wallet Novi. All this comes at a time when regulators want to break Facebook up. But it’s not all pretense. Providing modern and reliable financial services to rural countries also means the opportunity for talented individuals to thrive, instead of relying solely on business opportunities from western charities – which first-hand accounts show can be condescending and overly paternal.
Whichever way you look at things, it remains a fact that the majority of shopping, peer-to-peer payments and business interactions will be done via mobile in the future. Along with AR, mobile commerce via social is one of the era-defining updates that will change the way we use money in the west, as is already the case in China. As for market size, the latest figures put the global e-commerce market at $6.7 trillion by 2024.
I wonder how much of that will be attributed to mobile-first spending? Email me at [email protected] with your thoughts.
Kunal Pattany is a public speaker, technology commentator and the founder and CEO of Digital Human. With 15 years’ experience in marketing for leading companies like Kantar, a WPP data and insights company, he has turned his attention to the impact of digital and AI on humans and society’s response to innovation. To find out more about Digital Human, click here. To talk with Kunal about speaking opportunities, email [email protected] 👋