I have been interested in messaging app space, so recent news including Facebook/Whatsapp ($19B) and Rakuten/Viber ($900M) M&A transactions sound very exciting to me. Also, this week I’ve heard that Korean messaging service Kakao is getting ready for a $2B IPO. It seems mobile messaging consolidation is coming fast!
Since 2011, I have been using 9 different messaging apps: Kakaotalk, Line, Wechat, Viber, Tango, Whatsapp, Snapchat, Mypeople and Facebook messenger. The very first messaging app that I downloaded was Kakaotalk. When I was visiting Korea for 3 weeks in 2012, everyone I met was using Kakaotalk instead of SMS. I found it interesting that one messaging app was dominating the market and killing the existing SMS so quickly. Now, Kakaotalk has a smartphone penetration rate of 75%, according to research firm EMarketer, and, of those people, 93% use Kakaotalk.
Why do I use multiple messaging apps?
My answer is “to efficiently communicate with many different groups of people”. Below is my personal messaging app experience in a nutshell:
- Kakaotalk: call and text with my family in Korea.
- Wechat: text with my friends in China.
- Line: no special group of people downloaded Line because of their cute stickers.
- Viber: call only. Sometimes Kakaotalk calls got disconnected when I was on the go. I assumed that was because Kakaotalk didn’t have a big user base in U.S. Whenever calls drop, I used Viber as a backup.
- Facebook messenger: I barely used fb message until recently. I intentionally turned off fb notifications since I didn’t want to be distracted. As a result, I was slow checking fb messages. Sending a fb message felt more like sending an email rather than sending a text message.
- Mypeople: My firm uses it as a primary communication tool at work. My Mypeople contacts are all my co-workers.
- Snapchat: I downloaded Snapchat this year to be considered as ‘cool’ but realized that non of my friends were using it.
I was always curious which messaging app will dominate the U.S. market. In Asia, there are three popular messaging apps. Those three companies divided their target areas: Korea, Japan and China.
- Kakao: 133M (dominate Korean market)
- Line: 300M (dominate Japanese market)
- Wechat: 272M (dominate Chinese market)
However, they are competing against each other in South East Asia, U.S., and Latin America. Interestingly, those three companies all use the messaging service as the growth driver while the gaming service is the revenue generator. (Different from WhatsApp, which stays focused on building a pure messaging experience.)
In my opinion, Snapchat and Facebook are strong competitors in the U.S. messaging app battlefield. I am excited to see who will win the battle!