The landscape of workplace collaboration tools in China has seen a rapid evolution, marked by the emergence of distinct players vying for dominanceAmong these, the WeChat Work, or WeCom, has seemed scarcely remarkable over the last two yearsUnlike WeChat, which has thrived by integrating content with e-commerce, WeCom has remained notably silentInstead, it is platforms like DingTalk and Lark that have taken center stage, driving innovation and engagement through their aggressive product updates and boundary expansions.

DingTalk and Lark have maintained a dynamic and competitive environment, drawing inspiration from each other's product iterations and exploring new marketsLark has prioritized enhancing its ecosystem while moving towards a Platform-as-a-Service (PaaS) model, whereas DingTalk has focused on strengthening its ecosystem's atomic modules through document integrationTheir rivalry has also manifested in a push to win over customers across trending new sectors, battling for incremental growth amidst a backdrop of startups focusing on large model AI developments and embodied intelligence.

In contrast, WeCom’s recent history reveals a series of price hikes concerning external contacts for enterprise clients, a hesitant adaptation to the ongoing AI transformation in collaborative tools, and a 2024 prediction from its Vice President that WeCom will be the first to achieve profitability among the major players in the sector

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However, regarding significant updates to its software, WeCom appeared stagnant, particularly noticeable when comparing DingTalk's major update to version 7.5 and Lark's version 8.0 to WeCom's last major revamp being its February 2022 version 4.0.

As two years have elapsed, WeCom has been virtually non-communicative about its product evolutionThere has been little marketing activity aimed at expanding into public domains, suggesting a bizarre form of time stagnation within WeCom as DingTalk and Lark push forwardRather than evolving into a collaborative platform, WeCom has regressed into a mere “connector” tool primarily built around Customer Relationship Management (CRM) and Office Automation (OA).

The pandemic, which prompted a sudden need for collaboration tools, birthed the so-called "Big Three" players in China's business-to-business (B2B) marketOver the subsequent years, these platforms arguably created a balanced Nash equilibrium, where all three maintained significant yet differentiated market share

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However, new demands, particularly related to cross-border trade, retail, and AI innovations, are threatening this previously stable balanceThis raises questions about WeCom's strategic positioning: Has it begun to lag behind in the race?

When examining the dichotomy between being merely a “connector” and attaining an integrated system, it becomes evident that any slow-growth market involves protecting one's interests against competitors rather than just external threatsWeCom's connection to WeChat serves as a considerable advantage, enabling it to integrate industries related to consumption and services seamlesslyThis integration has provided the company with significant revenue avenues, paving the way for its commercially viable featuresIn enterprises with extensive customer bases, for instance, large chains like Luckin Coffee are compelled to pay WeCom substantial fees each year to maintain seamless communication channels with customers.

WeCom's rich data accumulation allows for manageable private domain customer relationships, effectively insulating the platform from user attrition risks, a concern that has left DingTalk and Lark envious

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The clarity with which its customer relationships can be analyzed creates a symbiotic ecosystem of internal alignment, where both internal cooperation and external outreach can thriveAn integrated system improves business efficiencies and data flows, fostering a holistic business management approach.

Nonetheless, WeCom has struggled in attracting larger sales organizations, which tend to emphasize the importance of internal operational efficiency, particularly during phases of rapid growthWell-known names such as Heytea and Naixue’s Tea have chosen DingTalk, while others like ChaBaiDao have picked LarkThe indications suggest differing operational philosophies: DingTalk focuses on 'people management,' while Lark emphasizes 'task management.' These nuanced distinctions reveal the broader context of enterprise management, which fundamentally encompasses managing personnel, tasks, and relationships

WeCom has been at a disadvantage in breaking through the first two of these elements, failing to craft its unique offerings effectively.

From a commercial perspective, this challenge stems from WeCom's limited team size compared to its competitors, which stifles its capacity for aggressive sales and product development strategiesFurthermore, its inherent association with WeChat poses additional constraints on its operational strategiesWeCom’s team is perhaps the smallest among the “Big Three,” with only about 500 to 700 individuals dedicated to its operationsBy contrast, Lark relies on a much larger team of approximately 3,000 people, which has allowed it to sustain a more expansive growth strategy, even after significant cuts last year.

The relationship between WeCom and WeChat has shaped its identity as a tool optimized for business collaboration, evolving from its inception as a competitor to DingTalk in 2016. Following the integration of the two platforms in 2018, WeCom has continuously capitalized on WeChat's sizeable user base, close to 1.4 billion users, which has facilitated the influx of paid features associated with the platform

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However, this has simultaneously hampered WeCom’s growth trajectory toward establishing a broad, comprehensive ecosystem.

Initially, WeCom was amenable to developing a broader ecosystem, as it emphasized the integral role of partners, open APIs, and third-party applications during the launch of its 4.0 version in 2022. Yet, as time progressed, its ambitions began to shift towards short-term profitability above all else, ultimately leading to a freeze on its expansive integration aspirationsThe question arose: How will it manage the costs associated with client migration in comparison to acquiring new customers?

In 2022, WeCom sought to expand its influence further by introducing a feature intended for interconnected businesses, forming a linkage between upstream and downstream suppliersThis allowed companies to create a directory of contacts and facilitate real-time document and application sharing

Moreover, this step sought to adapt WeCom's tools to meet the evolving needs of manufacturing industries in a more integrated mannerHowever, despite being theoretically sound, the CEO of a small appliance manufacturing company expressed dissatisfaction due to increasing complexity in data management amid high volumes of small-batch orders, which remained unresolved within the WeCom system.

The challenges experienced by WeCom couldn’t solely be attributed to market fluctuations; issues arose from inherent system limitationsThe continually rising fees for API use limited external development rates and fostered a landscape of services struggling to deliver their products effectively, particularly concerning the bespoke projects of larger enterprisesIf service vendors cannot ensure profitability in their dealings with suppliers, they will doubt the efficacy of their integration with WeCom, thus leaving vital components of business efficiency untouched.

Despite being aware of the potential gaps in its comprehensive tool offerings, WeCom’s in-depth focus on CRM and related services has resulted in a market saturated with products that rarely diverge significantly from the traditional CRM frameworks

This lack of diversity calls into question the viability of its downstream initiatives and its ability to penetrate deeper into the manufacturing sector effectivelyWeCom’s introduction of a new intelligent form function serves as a promising step towards addressing these issues, but this too comes with the challenge of timing and market receptivity after an extensive delay since the unveiling of its upstream and downstream capabilities.

Indeed, connectivity is not an area exclusive to WeCom, particularly when assessed aside from its relationship with WeChatCompetitors such as DingTalk have swiftly enhanced their offerings in response to WeCom's integration of upstream and downstream functions, releasing their version around the same time for competitive leverage.

WeCom’s inability to anchor itself firmly in the competitive manufacturing landscape has made it challenging to differentiate its offerings

The recent emergence of a user follow-up feature signifies a deeper pivot toward a narrowly defined role within the CRM space, raising anxieties among service providers who fear that their revenue streams may be under threat from provider encroachment in areas they once uniquely dominated.

Although WeCom's user follow-up feature remains in its nascent stages, it demonstrates a tendency toward evolving tool-based functionality reminiscent of WeChat's approach to product iteration, driven largely by user interaction and feedbackAdditionally, the challenges posed by WeCom's commercial model arise from the competing imperatives of fostering internal capabilities while partnering with ecological affiliates, both of which vie for dominance as primary revenue drivers.

In conclusion, while WeCom continues to access a wealth of resources, poised to capitalize on its association with WeChat, it remains trapped within a narrow operational sphere, unable to navigate the complexities of a diverse SaaS ecosystem