Sina Weibo may still be the dominant social networking service in China, but WeChat, a voice messaging application developed by leading Internet firm Tencent, is growing fast and may soon have as many users.

A week before WeChat celebrated its second anniversary Monday, it announced that total users of the software had surpassed 300 million. Industry insiders and experts predicted that its users may even exceed 500 million by the end of 2013.

Reaching 300 million users is "another important step, and we expect WeChat to expand overseas in 2013," Ma Huateng, Tencent's founder and CEO, said on his Weibo account on January 15.

The main rival social media platform for WeChat - Sina's Weibo microblog service - reported 424 million users by the third quarter of 2012, the latest data available.

"It is not a challenging task for WeChat to gain 200 million users in 2013, given the application's growing popularity and Tencent's large pool of users from its QQ instant messaging service," Li Yi, secretary-general of the China Mobile Internet Industry Alliance, told the Global Times Sunday.

Going global

Tencent launched WeChat in January 2011. By March 2012, the number of its users had risen above 100 million, and its users topped 200 million six months after that. The number is still growing quickly, having risen by another 100 million users in the last four months.

With the software gaining popularity in the mainland market, WeChat has also started eyeing overseas opportunities.

At present, WeChat has over 10 million overseas users, Tencent said in a statement e-mailed to the Global Times on January 18.

Although the three largest Chinese Internet companies - Tencent, Baidu and Alibaba - are in the top 10 list of global Internet firms in terms of market value, China still lacks Internet products that are recognized all over the world.

"China's Internet products are not that popular with overseas users, especially with Western users - most of the users are still mainlanders," Li noted.

However, Li said that WeChat may still be attractive to users in some Southeast Asian countries, such as Singapore, Malaysia and Thailand.

Downloads of the WeChat application are among the top 20 in areas such as Hong Kong, Taiwan, as well as in countries such as Singapore, Malaysia and India, according to Tencent.

Mi Talk, a voice messaging application developed by handset maker Xiaomi Technology and a major competitor for WeChat in the domestic market, announced Monday that it would cooperate with social network mface.com in Malaysia, aiming to gain a share of the Southeast Asian market.

Tencent has also established a team to promote WeChat in the North American market.

Dong Xu, an industry analyst at Internet consultancy Analysys International, noted that some markets are already saturated with voice messaging services, which will make it hard for WeChat to grab a share.

In the US, there is a similar application called WhatsApp. Line, a similar application in Japan, has gained over 100 million users so far, and South Korean voice-chat software Kakao Talk has more than 70 million users now, according to recent media reports.

But introducing a new product is not the only way to penetrate overseas markets.

In May 2012, Tencent announced that it had bought a 13.8 percent stake in Kakao Talk for 403 million yuan ($64.76 million), aiming to gain a share of the growing voice messaging market in South Korea.

"Mergers and acquisitions have been an important way for Tencent to expand in the past and buying into Kakao Talk could help Tencent gain a foothold in South Korea in the short term," Dong noted.

Profits expected

"With WeChat, Tencent not only secured a share in the mobile Internet sector, it has also guaranteed access to high-end users," Dong said.

Though WeChat still does not make any profit, experts said that it is only a matter of time before the software starts to make money.

Kakao Talk's services have expanded to online games, advertising and e-commerce. Media reports said that the company is expected to report a profit for 2012.

WeChat is also growing into a new media platform, with the application starting to use QR (quick response) codes to connect companies with consumers.

In November, online cosmetics retailer mfhui.com registered on WeChat and started to use the platform for sales promotions. Over 10,000 companies have registered on WeChat so far, Tencent told the Global Times on January 18.

"WeChat can serve as a promotion platform for companies, given that it has gained a large high-end user pool, and e-commerce sites are now using the platform to get orders, which could all mean potential profits for Tencent," said Dong.

Fang Yu, deputy manager at online retailing site zhengou.com, started to promote cosmetics on WeChat in August, and he told the Global Times that right now around 10 percent of the orders are from WeChat.

Fang has around 5,000 followers on his WeChat account, and needs to spend several hours every day answering their questions.

"WeChat offers an ideal platform for small companies to maintain a relationship with their clients, by enabling direct communication between companies and consumers," Fang noted.

Li from China Mobile Internet Industry Alliance noted that QQ made a profit by selling its "Q coins" and that WeChat can follow this method by offering some value-added services to its users, such as WeChat games or membership services.

"WeChat may replace QQ as its major cash cow in the future … and it could start to make a profit in the next three years if everything goes smoothly," Li noted.

Risks ahead

There are many other mainland voice messaging services available, but none have Tencent's large subscription base.

"The technical threshold for developing such applications is very low. The key is to gain users," said Li.

But Li also noted that although foreign Internet applications do not yet have a strong presence in China, they will come to the Chinese market eventually, which could mean pressure for Tencent.

Kakao Talk and Line announced their plans in 2012 to enter the mainland market.

Another risk for WeChat may lie in government censorship, to prevent the messaging application from being used to transmit unlawful content such as pornography or messages about illegal deals.

"If government censorship is involved, the WeChat user experience may be affected, which could lower the number of users," Li noted.

Recent media reports said that Tencent has been censoring the messages sent by overseas users, which had the effect that some messages could not be sent.

But Tencent dismissed these claims, saying that users who were not able to send messages were simply experiencing a technical glitch.