How chat apps are transforming the global conversation

The world loves to chat, and mobile phones have made instant yakking as easy as pie, whether by text, video, photo, voice, or all methods combined.

No wonder so many of us blunder into lamp-posts and each other rather than looking where we're going.

But which dedicated chat app do you use? WhatsApp, Snapchat, Viber, Line? That largely depends on where in the world you live.

In China the biggest chat network is WeChat; in Japan the market leader is Line; KakaoTalk rules OK in Korea; Kik is huge in Canada and the US; Hike bosses India; while in the Arab world niche networks such as Palringo and Soma dominate.

And the number of chat platforms continues to proliferate, as tech companies aim to emulate the eye-watering valuations achieved by the leaders.

Snapchat was recently valued at nearly $20bn (£15bn). Facebook bought WhatsApp for $22bn in 2014 and this week changed the app's privacy policy to allow businesses to message its billion-plus users directly.

In July, Line raised about $1.3bn in a stock market flotation that valued the company at around $6bn. And now chat networks are even investing in each other, with China's WeChat recently leading a $175m funding round in India's Hike network.

But can the market sustain so many platforms? Can we have too much chat?

In 1993, US researchers James C McCroskey and Virginia P Richmond created the Talkaholic Scale, a method of identifying people who were aware of their tendencies to "over-communicate in a consistent and compulsive manner".

In the intervening two decades, this scale could be applied to the way people obsess about their mobile devices.

Source: Statista

Initially it was SMS and text messaging that made such communication compulsive. Then it was instant messaging with text, photos and videos.

And now you can access banking, shopping and other services within these chat apps.

"WhatsApp, WeChat, Line, Snapchat and a handful of others would seem to have the platform side sewn up as we head towards a one-stop-shop approach, where messaging apps become almost a command line for people's lives," says Eamonn Carey from Techstars, the tech start-up accelerator.

So how do the newcomers differentiate themselves in such a crowded market and keep their users loyal?

The trend is towards chat that can be conducted in a safe place by users who share a common interest.

"Niche networks will have a big role to play in what otherwise is a saturated market," says Mr Carey.

For example, London-based Palringo is a social chat platform that helps people find games that can be played in chat groups of up to 2,000 people.

This combination of chat and games helped Palringo become one of the fastest-growing UK tech companies last year, with these chat games making up to 50% of its revenues through in-game purchases.

"The proliferation of chat networks when there are different territory-specific market leaders meant we had to find a common language," says Palringo chief executive Tim Rea.

"That language is games and we're seeing huge growth with our in-chat games."

Wire offers chat with ad-free embedded YouTube videos and gifs (short animations).

Backed by Skype co-founder Janus Friis, the company says it is attracting 200,000 users a month. It focuses on privacy as its unique selling point.

Co-founder and chief technology officer Alan Duric explains: "Wire is a privacy-focused messaging app that works across devices and incorporates chat features that users love - text, voice, video and pictures - underpinned by end-to-end encryption that is completely open sourced."

Popular chat app Telegram has also emphasised encryption as a key feature, much to the annoyance of European leaders concerned about the use of such secret platforms by potential terrorists.

But the battle to keep users is even more fierce than the battle to attract them. Chatters are a fickle lot it seems.

In August, picture messaging app Instagram released its "Stories" feature where users can post moments of their day in a slideshow of video, photos and captions.

This feature almost replicates a similar component that has proved very successful on rival chat network SnapChat, uncannily also known as "Stories".

This duplication of content reflects how users of chat networks are quick to jump ship if another app is offering something new and appealing.

According to a survey of 30,000 people aged 12-25 from comparison app Wishbone, 43% of respondents would delete Snapchat if Instagram's new Stories emulated the popular "filters" feature originally created by Snapchat.

Filters enable chatters to distort their photos and overlay them with cartoonish add-ons, from a dog's ears to a cat's whiskers.

Away from the consumer world, business chat apps are also flourishing.

Intercom is a messaging platform that is trying to establish itself as a business platform, while having the look and feel of the best consumer messaging apps. It works with 13,000 businesses and more than a billion people use it.

"What's really exciting to us is the potential of messaging, as it is the most personal medium we have to communicate virtually," says Eoghan McCabe, Intercom's chief executive.

"Businesses can use messaging to avoid being faceless, stuffy brands and connect on a human level with their customers."

There are plenty of others, from Slack to Flock, HipChat to Zapier - the list seems endless.

Although chat apps don't appear to have reached saturation point just yet, new entrants are having to box clever to find their niche in this ever-expanding market.

Not all may survive, but with the number of global smartphone users forecast to rise from about two billion now to nearly three billion in 2020, it looks like there's going to be a lot more chatting going on.

Follow Technology of Business editor @matthew_wall on Twitter

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