After More Than a Year Chasing Entertainment Social, QQ Is Falling Further Behind WeChat

"Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple." — Steve Jobs

Last week, the Tencent Open Platform's official WeChat account published an article titled "95ers Basically Don't Use WeChat: 13 'Wild Ideas' to Help You Understand the Post-90s Generation." It lasted about two hours before it was deleted.

Founded in 2013, the Tencent Open Platform sits under Tencent's Social Network Group. Its main job is to bring in partners of every kind for QQ and QQ Zone. A few days before the article went out, Tencent held a mobile communities conference in Beijing and announced a series of partnerships to promote film, music and online-literature stars through its social networks. Over the whole event, no one mentioned WeChat once.

"98% of WeChat users are adults. Users aged 10 to 29 make up 80% of QQ communities." The summary that survived the deletion said WeChat had failed to win young users, and that QQ is still the mainstream platform for them.

QQ and WeChat have competed since WeChat was born in 2011, but this month's small episodes have brought the rivalry into the open.

Tencent's second-quarter results, released last week, show why the competition has sharpened. Growth in mobile-game revenue slowed markedly, with the year-on-year increase falling from 82% to 18%. The new star is mobile social advertising, whose revenue nearly doubled.

But when outsiders talk about Tencent's advertising today, they no longer mean QQ's little pop-up ads. They mean the Moments ad that sells for 5 million yuan a slot.

Judged by user numbers alone, mobile QQ today is a match for WeChat. In mobile QQ 2.0, released in 2013, Tencent fixed failed designs such as the inability to stay logged in on a phone and a PC at the same time. After that, mobile QQ's user base began to grow steadily.

But QQ is not an active advertising platform; its revenue has long come from paying members. It began courting advertisers only in 2013, when Xiaomi first sold a phone on QQ Zone. Meizu, Huawei, HTC, OnePlus and more than half of China's other phone makers have since launched products on QQ Zone too.

After several scattered attempts, in May 2014 QQ added a social platform called Interest Tribes, which tries to hold on to users with entertainment topics. Tang Daosheng, Tencent's senior executive vice president, called it "semi-acquainted social."

Over the past year, QQ has added one feature after another around Interest Tribes, including official accounts, interest accounts and service accounts, and it has formed a partnership with Huayi Brothers.

If you only use QQ to chat with classmates you haven't seen in years, you may be shocked by how much QQ now contains.

What Exactly Is QQ Today?

Open mobile QQ today and you see three pages: Messages, Contacts and Feed. It looks even simpler than WeChat. That is an illusion.

Messages

This is where most information comes in. Your chats with other people and messages from the groups you have joined all appear here.

Beyond ordinary messages, Tencent has added an internet phone service and a Yellow Pages-style local-services directory to this page. The Chinese startup ChuBao released a similar product earlier. Being a Tencent product, the internet phone also offers voice group chats with strangers.

Contacts

Besides the friends list, sorted into groups, this page also gathers official accounts and group chats. Both play important roles in QQ's communities, and both are complicated in their own right.

The new QQ official accounts resemble WeChat official accounts and come mainly as subscription accounts and service accounts. A search shows that QQ official accounts, still in internal testing, include not only life-service accounts but also accounts such as a TFBOYS fan club. This, too, is plainly an attempt to ride entertainment topics.

The groups include not only QQ groups but also discussion groups. Discussion groups are identical to WeChat group chats; they even have a face-to-face group-creation feature that works like old-style Bluetooth pairing.

At Tencent's mobile communities conference, the mobile QQ team stressed the place of QQ groups in Tencent's whole ecosystem. Open a QQ group chat today and, besides an interface much like WeChat's, you will find four social modes and a set of collaboration tools hidden behind the + button.

Feed

The screenshot above should show how complicated the Feed is. It started out as just QQ Zone, but after several expansions no one can say in one sentence what it is.

"People Nearby," location-based social networking with strangers, once helped WeChat win users. On mobile QQ, though, the nearby function is not very active, and most topic chats have no participants at all. Nor is it only about chatting: local events and live voice chat rooms similar to YY Voice have all been piled in as well.

Interest Tribes is mobile QQ's newest attempt at community. Put simply, it is a Tieba-style forum or message board.

On top of all that, the Feed takes in a string of other functions:

• Games: Mobile QQ has moved the entire game lobby in, from Dou Dizhu to all kinds of mobile games, strategy guides, gift packs and videos. According to figures released by Tencent, game-related Interest Tribes rank first in both fans and visits.
• Shopping: JD.com shopping.
• Reading: QQ Reading.
• Comics: New installments from the local manga artists signed by Tencent Comics, and comics from Japan's Shueisha, can be read right here.
• Music: A QQ Music where you can top up a Green Diamond membership and hear Jay Chou's new album, though it still urges you to download the separate QQ Music app.

…………

The Pressure on QQ

Behind the ever more complicated product lies pressure: QQ must use social networking to keep more users and find new sources of revenue.

As a desktop program, QQ once made most of its money from personalized dress-up and its account-level system. From these it spun off services such as QQ Membership, Red Diamond and Yellow Diamond. At 10 yuan a month or 114 yuan a year, they don't look expensive. These paid add-ons are still the largest source of revenue for QQ and QQ Zone.

The main thing QQ Membership does is help you level up your QQ account. The more sun icons you have, the more you prove yourself a social butterfly. The QQ level system, based on hours spent online, turns socializing into a game. As with WeChat's step counter today, comparing yourself with others is the most natural incentive. Buying QQ Membership was like a cheat code that counted you as online 24 hours a day. To stand out on the network, you customized skins, avatar badges, chat emoticons and more, and for a while that made you a big spender.

In 2008 QQ Membership began offering a discount on annual subscriptions. That same year, the various "Diamonds," which rounded out the level system, became QQ's most important source of revenue. Red Diamond and Yellow Diamond, built on virtual avatars and Zone decoration, were the two main Diamonds of QQ's desktop era.

Red Diamond serves the QQ Show avatar, with discounts of varying size on everything from clothes and accessories to hairstyles. After selfies took off, swapping your QQ Show avatar for a picture of the real you also became a members-only feature. Red Diamond offers stickers for decorating selfies, too. The way it works even resembles some of today's selfie apps.

Yellow Diamond has changed a good deal as QQ Zone's positioning has shifted; it now offers, for example, photo albums with more storage. Still, adding your favorite background music to your Zone, leveling up faster in social games such as Flower Vine, and picking showier display modules remain the core of Yellow Diamond today.

But moving these special features onto mobile QQ is not easy. Even a 5.5-inch phone has far less screen space than a computer, leaving no room for elaborate QQ Show outfits and QQ Zone decoration.

Mobile QQ no longer sells Red Diamond. And last year the number of members of Tencent's value-added services fell again.

Fewer and fewer people use QQ's most profitable business, so the company has turned to advertisers. In this year's second quarter, growth in Tencent's game revenue slowed, and the whole company is asking where its next core business will come from. Mobile advertising revenue rose 197% year on year this quarter, thanks to WeChat Moments. Paying 5 million yuan to place one ad with a built-in HTML5 page in the feed has become the model for social advertising in mobile apps.

Recently Fan Bingbing, and right after her Bai Baihe, the actress who has owned this summer's movie season, each ran a round of ads in Moments. WeChat, too, now wants to make money from the entertainment world. And entertainment happens to be the main way QQ is trying to hold on to its users.

Is There a Future in Communities?

QQ is trying to make users more active around interests such as film, music and online literature, and to bring in the matching advertising.

"For now QQ Zone is still a relatively closed social platform, with limited social influence beyond it," Liang Zhu, head of Tencent's Social Platform Department, told QDaily in an earlier interview. So, from verified Zones to topic circles, QQ Zone set out to turn itself into a social network visible to everyone.

But what kind of social network is it, exactly? QQ says most of its users are post-90s. They mostly talk about hit TV dramas, celebrities and online fiction, and they are fans themselves.

QQ Zone's push into advertising has already paid off somewhat. It began testing ads in the feed in May 2014, and today you can find several kinds: 15-second videos, app downloads, shopping recommendations and more.

QQ Zone is also getting into film promotion. It has even helped organize offline film launch events, simply so that producers will buy online ads.

But QQ's entertainment ambitions do not stop at its social network, QQ Zone. Data from Penguin Intelligence show that 66% of QQ groups are interest-based. QQ groups matter, but people have no easy way to discover them. Interest Tribes is now trying to serve as their front door.

Once inside a tribe, you can quickly find related groups in the navigation bar under the tribe's avatar. Interest Tribes sorts QQ groups by location and topic popularity. And how do you pick a group to join? You can go by tags such as "lots of girls" and "lots of events."

Beyond QQ groups, Interest Tribes has its own logic: users check in, level up and start topics there, and it looks exactly like Baidu Tieba.

What makes Interest Tribes more complicated still is that, besides groups and tribes, it tries to help fans follow celebrity news through interest accounts, which resemble WeChat official accounts. The difference is that QQ offers official accounts as well. Find the official account of TFBoys, currently QQ's hottest partner, and open it: you see news about the three members and a button leading to an interest account. Tap it and you reach TFBoys' interest account, whose content is exactly the same as the official account's.

This month, when QQ and Huayi Brothers launched Star Film Alliance, a new Interest Tribes feature, they presented this diagram of how it works:

And this is just one side branch of QQ's mobile social network.

In QQ's vast social network, you can post topics (threads) and Shuoshuo (updates similar to Weibo posts); you can like, check in, share, comment and leave messages. Even joining a group chat comes with at least four options.

QQ has taken in practically every way people interact on social networks. By now it is hard to see the logic that ties all these pieces together. Behind the tangle is the fact that QQ cannot give up any of its old functions, and they clash with one another.

In 2014, Tencent set up a separate business group around WeChat. In the months that followed, finance, payments, advertising and other businesses grew on WeChat from nothing. QQ's social push, which began at the same time, fell back into the old cycle of product sprawl.

At an industry conference in 2013, Pony Ma said that the biggest reason mobile QQ had moved slowly was its organizational structure: QQ, QQ Zone and mobile QQ sat in three different business units, which made cross-department work very hard. "You can't blame the product for being bad; the organization hasn't been sorted out."

The three units have since merged, and the organization looks sorted out. But QQ still hasn't worked out what a social product should actually do.

Cover image: evbuc