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In 2009, Ted Livingston and Chris Best wanted to create a way to share music with their friends. University of Waterloo grads in Mechatronics and Systems Design Engineering, respectively, the pair founded Unsynced, which had a music sharing component and a chat component that would work on any platform. Obtaining the required licensing to share music took time, so they released the chat app separately. In just 15 days, they had one million users. In 22 days, that number had grown to two million. They abandoned the music sharing app, started Kik and haven't looked back. Now boasting more than 300 million registered users, Kik is the chat app of choice among North American tweens and teens. Now they are building upon their offering and creating a platform that will open the door to new demographics.
Kik's target demographic is unique. Tweens and teens have skipped the desktop entirely, growing up in a mobile web environment with tablets and smartphones. According to data from the Pervasive Group, teens engage in 6.1 chat sessions on Kik per day, averaging 74 minutes total.
"Our research has shown that teen smartphone users have more than four chat apps on their phone, and that users download chat apps because that's where their friends are. We think that our chat platform, which offers more than just chat, will be able to reach other demographics because we will have unique experiences built into the app," said Rod McLeod, Director of Communications for Kik.
A chat platform can now be designed to bring experiences like shopping or banking into the fold. Kik is taking this path.
In China, WeChat boasts millions of users and is an integrated chat platform. New businesses in China launch a WeChat profile before a website. Users can chat, order take-out, order an Uber, book a hotel and even apply for a mortgage without leaving the app. Kik plans to be the WeChat of North America.
In 2015, WeChat's parent company, Tencent Holdings Ltd provided Kik with a $US50-million investment to help further their development efforts. This infusion of capital gave Kik a $1-billion valuation. Kik's intention is to create a chat platform similar to how WeChat functions, while pushing the boundaries of functionality.
Kik is competition to Facebook Messenger, WhatsApp and Snapchat. Facebook has approximately 1.7 billion users, and acquired WhatsApp in 2014 for $19 billion to broaden their international reach and messaging capability. McLeod advised that Facebook is tough competition, but Kik has a strong advantage – their demographic. And this could be a significant advantage as teens get older and enter the workforce.
If we're looking at demographics that would try different services through chat, teens are a natural first choice. As they grow up and enter the workforce doing everything through your chat app will be second nature to them; they'll become the new influencers and the implications for business will be enormous.
"For many teens, mobile is the first touchpoint to the internet, just like WeChat users. They are comfortable with mobile platforms and are chat natives," said McLeod. This makes them the ideal demographic to grow with Kik's chat platform. "Our competition underestimates our target demographic. Teens are willing to try and use these types of services, and we see this as a big opportunity. As we build out our platform, it's these experiences that will pull in other demographics into Kik."
The company is now focused on building chatbots, simple computer programs that interact with users, inside of the Kik chat platform. In April 2016, Kik launched a Bot Shop, an app store for bots, and opened its platform to third-party developers. In August, Kik announced that more than 20,000 bots have been created, and 1.8 billion messages exchanged with bots. Bots provide brands such as CNN, Sephora, The Weather Channel, and others the ability to interact directly with consumers, and provide personalized content. Kik's research has found bot users spend 32% more time on the app interacting with chat bots, and of those users, 60% are ages 13-19.
"Users can discover bots in four ways: The Bot Shop, the 'mentions' feature where you can directly add a bot into a conversation with a friend or a group of friends, the "invites" feature where you can invite friends into a bot experience, and Kik Codes, Kik's version of QR codes. Bots need to be engaging and interactive, and many developers are still figuring this out," said McLeod. Kik, however, is at the forefront of innovative bot advancements.
"At Kik, we believe we're in the most exciting race in technology. We're getting closer to the day when chat is the central hub for your everyday life, and we're looking forward to building one of the leading chat platforms in the world," said McLeod.
December 16, 2016
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All figures are in Canadian dollars unless otherwise noted. Information is accurate at the time of publication.