Top 3 reasons behind the failure of MSN Messenger in China and the rise of QQ

Siyang Wang

Using the examples of Uber vs. Didi Chuxing and Amazon vs. Alibaba, U.S. tech companies often find it challenging to steal away market share from their local rivals in China. Many, for various reasons, have already been defeated.

MSN Messenger, an instant messaging tool launched by Microsoft in 1999, despite shedding blood for China largely failed at gaining a foothold.MSN entered China in 2005 and soon grabbed 10.6% of the market within one year.

With 330 million Monthly Active Users in 2009, MSN was the most widely used instant messaging product in the world. Though its market share never caught up with local rival Tencent’s QQ Messenger, MSN gained popularity with “white collar” workers from first-tier cities in China.

In the past five years however, MSN’s market share in China dropped significantly. Last year, QQ occupied around 90% of the instant messaging market in China.Microsoft has since announced that MSN will exit the Chinese market.

What went wrong with MSN’s China strategy? AllChinaTech reveals the top three reasons behind MSN’s failure in China.


1. Too stiff to fit the dynamic market of China

Many believe that a lack of decision-making power and a long approval process undermined MSN’s response to market change and user needs.

“There are many shortcomings in the [Microsoft] system. MSN China isn’t reluctant to [make changes], but it is quite difficult to change Microsoft’s strategy structure.” said Liu Zhenyu, the CEO of MSN China.

MSN China was at the bottom of the corporate system. When it came to major decisions, it had to go through MSN Asia-Pacific, MSN Overseas HQ, MSN Business Division, and then Microsoft HQ to get approval.

Some say the poor position of MSN China was down to the revenue MSN China brought in – considered not significant enough for Microsoft to devote resources to the division.

As a result, the long decision-making process faced by MSN China impacted the upgrade speed of the product.

QQ on the other hand is famous for its quick reaction to market changes and user needs. QQ was among the first companies to launch a mobile app and embrace the opportunities of the mobile internet. MSN, however, barely managed to keep up.

QQ2. Unsatisfactory user experience

MSN messenger initially impressed numerous professionals with its clean and professional interface, but even MSN’s most loyal users eventually became unsatisfied with the user experience.

Almost all MSN users encountered problems like connection instability, service breakdown and viruses. Nation-wide service outages predictably happened twice or three times a year.

Although MSN attempted to improve its user experience, the slow upgrade speed, massive amount of spam and its limited functionality held it back from expanding users.

Practical features missing from MSN but implemented in QQ included: the screen grab tool, group chatting and large file transfers – all of which contributed to Chinese MSN users migrating to QQ.

Though QQ appeared inititally a bit childish to MSN users, it gradually occupied most of the Chinese market with its stable services and user friendly features.

3. Inconsistent Brand Positioning

The frequently changing brand positioning not only created much confusion for users but also sped up its failure.

In 2006, MSN Messenger changed to “Windows Live Messenger”, a large software package bundled with a lot of rarely used software.

Only five years later, Windows Live Messenger drastically changed from closed IM software to a social network product to compete with Facebook. This change did not receive much welcome from users.

Many complained that friend profiles and activities occupied their starting page and made the interface complicated and non-professional.

In October 2014, MSN Messenger completely shut down its service and shifted its users to Skype. QQ got rid of the rival.

QQ Messenger also introduced social networking features to its service, but its main functions and interface were kept classic.

According to Tencent’s Q3 report in 2015, QQ was China’s second largest social network with 860 million monthly active users.

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