Tencent Puts a Major Investment into Kik

At first blush, it might seem strange that the makers of WeChat—China’s most popular messaging app, according to reports—would put a huge investment into a completely different messaging app, but that’s just what’s gone on according to recent word. The word is that Tencent put fully $50 million into Kik, and the word further suggests that this is part of a much grander strategy.

Tencent’s WeChat has no shortage of users, with about 400 million such active users to its credit in China. With that kind of market base, it’s no surprise that there are plenty of opportunities for transactions on the platform, including online gaming, as well as mobile payments options and various e-commerce features.

There are even brand connections to produce advertising dollars as well as advertisers try everything to connect to as large a portion of that 400 million as possible.

So with that in mind, it’s no surprise that Kik views WeChat as something of a model for how to make a mobile messaging tool really happen, a point underscored by Kik founder Ted Livingston while at a public forum at the University of Waterloo. Livingston noted that he, and the rest of the company, were eager to find things to “…build on top of chat,” and WeChat certainly seemed to have found these things in a big way.

But then, why would the model invest big money in the aspirant? Forrester Research’s Julie Ask offered up a bit of insight on why that would be, noting that this was likely WeChat’s attempt to enter the North American market, which hasn’t taken to messaging apps near so quickly.

Of course, there’s a lot of reason behind that; the North American market has been engaging in a variety of communications methods, from Web-based real time communications known as WebRTC, to text messaging and video chat and beyond.

Messaging apps are just one part of a much, much larger whole in North America, so that same kind of focus that WeChat has experienced likely won’t ever happen. But here’s the thing; if companies like Kik can get even a part of WeChat’s success going, it’s likely to produce some substantial new income streams and generate a lot more interest.

Users will get more functions to work with under one roof, which improves on a convenience angle. That’s likely to draw in more users looking for an all-in-one solution to many common issues. Then from there, the advertisers take interest, and start bringing in those ad dollars in a bid to try and reach that massive new market. That in turn means more things to offer, and more people coming in, which further fuels interest.

If Kik can become more like WeChat, there’s a possibility for some greater success here and some impressive potential gains. It remains to be seen if Kik can achieve these levels in a market, and a culture, quite different from WeChat’s. But it’s an exciting possibility nonetheless, and one that may well be achieved sooner than some may think.