Much has been written recently about the rise of chatbots and their potential to change consumer interactions with businesses.
However, all that discussion seems to have missed the radical implications this has for the current mobile ecosystem and the nature of competition in digital services. As an increasing number of companies investigate chatbots to sell their services and automate customer service, the messaging services they integrate into have an opportunity to become the new mobile platforms.
China is showing the way (again)
If we look to China, we can already see how this new world is playing out. Tencent’s WeChat has evolved to become far more than a messaging app. It is now a rich mobile ecosystem filled with powerful features and automated services that touch nearly every part of consumers’ lives. WeChat users can manage significant parts of their lives without ever leaving the app — from booking services to reserving (and paying for) dinner to ordering a cab.
What is important is that users connect through WeChat not just because of the ease of engagement enabled by the conversational interface, but because the services have been integrated seamlessly into the most frequently used app in China. The reduction in friction this delivers to WeChat’s massive user base has real impact. When WeChat integrated taxi app Didi Dache into its platform, Didi quickly doubled the number of people using its service.
From apps to chatbots
The kind of impact Didi Dache experienced is why chatbots are suddenly the hot new date in the technology industry. The entire premise of a bot is to make life simple and efficient, and if they do that successfully, they can become very sticky.
Not only that, but bots are arguably more suitable for mobile than apps are. Messaging is at the heart of our mobile lives, and transactions via chatbots are faster and easier than installing, opening up, and navigating through an app.
It’s still too early to know exactly how things will play out, but the lessons from WeChat suggest that messaging apps have an opportunity to become one-stop-shops for services. If they do that, it will naturally lead to users downloading and using fewer apps, as those users spend more time and money through messaging channels.
The new mobile economy
Since Apple launched its App Store in July 2008, apps have played a dominant role in driving the mobile ecosystem. There is now a huge economy — and a significant amount of revenue for Google and Apple — built around apps. But if consumers prefer to use a conversational interface, what does that mean for the current paradigm?
Chatbots present messaging apps with an opportunity to overtake apps as the dominant mobile commerce platform. As businesses increase their use of chatbots and conversational interfaces for transactions, it follows that a significant chunk of those app economy dollars will be redirected to (voice-enabled?) messaging platforms rather than to OS vendors. It is safe to say that this will tip the world of mobile commerce on its head.
Messaging apps as king makers
One of the areas that may see the greatest change is user access to chatbots. Most analysts assume messaging apps will adopt an “open marketplace,” like the Apple App store. And indeed, Facebook announced that more than 11,000 bots have been added to Messenger since the platform launched in April, and tens of thousands of developers continue to build new ones every day.
However, that level of neutrality and choice can’t be taken as a given — there is the real possibility that some messaging apps will go in a different direction. Tencent already invests in many of the companies it integrates into WeChat, so it shares in the profits from the rapid growth it enables for its partners. Messaging app vendors may decide that it is more lucrative to sell access to the highest bidder, controlling which firms you can use to order a taxi, book a flight, or find a local restaurant.
And the winner is…?
Whether this shift to conversational interfaces plays out as many are predicting is still unclear but, if it does, it will signal a seismic shift in mobile. Indeed, if WeChat’s experience in China is anything to go by, we may soon be witnessing the emergence of the most powerful transactional platform the world has ever seen.
Google and Apple are unlikely to give in without a fight, though, and their mobile “assistants” provide an obvious opening for conversational interaction (not to mention Apple’s iMessage user base). However, they are already late to the party and will need to make significant moves quickly to maintain their influence.
That said, the significant network effects that drive usage mean the preferred messaging app varies hugely around the globe. WeChat’s experience in China confirms that there is an opportunity for many companies to build a significant, or even dominant, position in specific geographies, so we are likely to see a host of contenders — Snapchat, Viber, Hike, LINE, and others.
Whoever wins, history shows us that any time there is increased competition, customers are the real winners. Welcome to the new world of mobile; it’s going to be fun — chatbots will make sure of it!