I attended the WeChat Open Class in Guangzhou and WeChat Work 3.0 was one of the big topics this year. There is a growing suite of digital tools for enterprise management, communication and collaboration. And they raise some fascinating strategy questions. It’s clear that enterprise tools in mobile-first China are going to evolve differently.

These are still the early days of digital tools for businesses in China. But I think there are at least 7 issues to pay attention to as the sector evolves.

Ok. Here is my working list of issues.

Issue 1: The pervasiveness of WeChat will shape how companies interact with external parties – especially in sales and customer relationship management.

My standard question for anyone arriving in China is: How long did you last before you joined WeChat? And the answer is usually a couple of hours.

WeChat is required for business and life in China. It is universal for communication and connectivity. It is very big in mobile payment. And it is fueling some interesting stuff in e-commerce right now (i.e., Mini-Programs). So any company’s digital tools have to deal with the fact that all the employees, customers and suppliers are already using WeChat every day.

For WeChat Work 3.0, the ubiquity of personal WeChat in China is their biggest strength obviously. And they emphasized this during the Guangzhou meeting. Their digital tools use WeChat for external relationships, such as:

• Sales
• CRM
• Customer services
• Customer experience (CX) in an omnichannel journey

Plus tons of businesses have WeChat Official Accounts, so that also integrates communications and marketing into WeChat Work.

How this is going to evolve over time is an important question. And it is very different to how things happened in the West, with ERP systems being built into companies long before iPhones and other consumer-facing devices emerged. Plus, there was never a communication, connectivity and payment tool so widely adopted.

Issue 2: Guerilla sales into enterprises (like Slack and Box) could really take off in China.

In the US, there is fascinating competitive dynamic between Microsoft and Slack happening. Microsoft has the long-term client relationships from its days of selling on-premise servers and software, especially for larger companies. And this positions them well for selling cloud-based enterprise services (like Office365 and Teams).

Meanwhile, digital attackers like Slack, Zoom and Box are strong with SMEs and with individuals. And when enough individuals within a large organization just happen to be using Slack, the Slack direct sales team then calls the management to discuss a corporate contract. And they can pitch something like “well, lots of employees are already using our service in your company, and for company business. So it is obviously valued. But do you know what they are doing? Are if they in compliance? You should have a corporate contract so there is administrative oversight and control.”

It’s a good guerilla sales tactic. Lot of individual adoption within and between companies – and then a direct sales team to upsell to a larger contract. Note: this may not be enough for Slack against Microsoft long-term.

I think we could definitely see something like this on a much larger scale in China. Because as mentioned, everyone in China is already using WeChat, personally and when at work. And companies themselves are widely using group chats for projects and department functions. So you could see the same hybrid approach to corporate sales.

One problem with this is Chinese companies have not been implementing IT systems for the past 30 years. A lot of the foundation is not there yet. But it’s one of my areas to watch.

Issue 3: Lots of new privacy issues and rules will be created.

One of the more popular features of these enterprise tools is employee check-in, where staff must check in their location and time and such. Employers like this. But unsurprisingly, the word Orwellian came up pretty fast about this function (mostly in the Western press).

Check-in and check-out and other employee tracking functions are being implemented. Facial recognition is being rolled out rapidly in companies and everywhere else in China. Digital tools at companies are going to create a whole new list of issues, discussion and probably government rules about privacy and data.

Issue 4: Large distributed workforces could be managed entirely with smartphones

My favorite question in all of this is:

What will enterprise management look like in a country that is both massive and has overwhelmingly mobile-first in behavior?

We have seen big differences in consumer China because of these differences. But how will they change digital B2B?

At the WeChat conference, there was an interesting presentation by Oppo. They talked about how they have tons of sales agents (employed and contracted) all around the country that do their sales, handle their inventory and do CRM. And these agents are increasingly doing this via WeChat Work. The agents can handle sales and inventory ordering with just their phones. And they can use CRM for increasingly sophisticated relationships with their customers. Meanwhile, the main office can use these digital tools to communicate and manage this large distributed workforce.

That is pretty interesting. A large and widely distributed workforce that is coordinated almost entirely by mobile-based enterprise software. And that is increasingly engaging with a large and widely distributed mobile-first customer base.

Could we see large parts of the Chinese workforce operating entirely from their smartphones?

Issue 5: SMEs may become smartphone-based enterprises

A variation on the previous point. DingTalk and WeChat Work are focusing on providing digital tools to SMEs, which can often have just a few employees. What will SMEs in China look like when fully digitized with mobile tools? Could 3-5 people build and run an SME entirely on their smartphones?

I think that is a really interesting idea. A smartphone-based SME.

***

Ok. Now I’m just speculating. Two final points.

Issue 6: Enterprise infrastructure may end up divided between Alibaba and Tencent in software and Huawei in hardware.

Tencent’s WeChat Work and Alibaba’s DingTalk both want to be the digital infrastructure for enterprises, especially SMEs. They are both focusing on communication and few other tools as the critical functions – and neither wants to create a full suite of tools for all industries. Ultimately, they want to capture the critical functions and then be the digital infrastructure that companies and application developers build upon.

However, Huawei’s Enterprise Business is pursuing the same strategy. But they are mostly talking about it mostly in terms of hardware. They want to provide end-to-end solutions that span smart devices and IoT, 5G connectivity and cloud services. And this gives them some pretty big strengths in sectors requiring specialization or an end-to-end solution – such as:

• Transportation, which requires low-latency connectivity and tight integration.
• Financial services. Which has lots of specialization and security issues.
• Smart cities. Requiring lots of hardware, standardization and integration across a large geography.

But they are also ultimately trying to be the infrastructure that everyone else builds upon.

So where are these two different digital infrastructure plays going to overlap and compete? In cloud services? For sure. In enterprise internal communications? Probably not. When specialized hardware is required?

I don’t know where this is heading. But I like the idea of Huawei, Tencent and Alibaba all going head-to-head in certain sectors.

Issue 7: WeChat’s Mini-Programs Are the Wild Card.

Unsurprisingly, Alibaba’s DingTalk and Aliyun are doing well focusing on SMEs that are active in e-commerce, such as retailers and brands. And businesses are digitizing rapidly.

But WeChat’s Mini-Programs is increasingly entering this space. I will be writing a lot more about them, but they are making a powerful pitch to merchants and brands that they can own the stores the build online. Aliababa and JD provide merchants and brands tons of services but they also kept them dependent on them for accessing their customers. WeChat Mini-Programs look like they are just providing tools without much dependence. It’s the difference between someone who offers to sell you a store in the mall instead of just renting it.

I think Mini-Programs are a real wild card in all of this. Depending on how well they do, this could be an important avenue for enterprise digitization. We’ll see.

***

Ok. That was kind of a lot. But it’s a fascinating space that is really just beginning. So lots to think about.

Thanks for reading.

-jeff

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I write, speak and consult about how to win (and not lose) in digital strategy and transformation.

I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.

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