Unfortunately, this is probably the much more likely scenario, since Chinese tech products have long since reached the point where they're widely considered good enough (or in some cases, much better) compared to western alternatives for a large majority of Chinese citizens.
The possibility that eventually Chinese internet products could by their own merit compete in the global market, outcompeting western alternatives in some cases, is the even more terrifying aspect to me, however. I wrote a lengthy post about it not too long ago, and don't have anything useful to add to it yet, so please excuse the copy-paste:
To authoritarian governments all over the world, the censorship and surveillance frameworks built into many Chinese internet services like WeChat are actually extremely valuable features, rather than something they'd want to opt out of.
These features have been battle-tested in the largest and most ruthlessly robust surveillance state the world has ever seen, and have time and again proven their effectiveness in influencing public opinion and quelling dissent.
If an app like WeChat were to ever gain foothold in a nation with an authoritarian government, all they'd have to do is strike a deal with TenCent, and with the flip of a switch, that government can then enjoy unprecedented control and visibility into the "private" communications of its populace. All the friction involved in the decidedly difficult and costly exercise of building your own large-scale surveillance/censorship infrastructure will suddenly have been removed. The one thing Chinese internet services can offer that no western counterpart can reasonably compete with also makes them by far China's most dangerous export: authoritarianism as a service.
To those of us in democratic nations, we must also remember that authoritarianism usually doesn't manifest itself as a cliff, but rather as a gradual, slippery downward slope. Every government in the past has displayed authoritarian tendencies in their history, to varying degrees, and governments in the future will inevitably continue to do so. The natural tendency of government is to slide down the slope of authoritarianism, because government is power, and power corrupts. It takes diligence and continued effort on the part of the governing body and its citizenship to counteract this natural descent.
All it would take is another 911 type terrorist attack to sway public opinion enough to the point where enacting some kind of dragnet surveillance system in the name of national security would become politically feasible, in any democratic nation in the world. At that point, the horrible user experience and PR nightmare in having to rebalance the national budget or raise taxes to make room for improving your domestic spying infrastructure could be the only thing standing between us and an irreversible descent into authoritarianism. And if a significant portion of a democratic populace happens to be using WeChat at that point, well, let's just say I don't have a lot of faith that my own government could resist the temptation and take a principled stand against such a frictionless way to expand its own powers.
As Chinese offerings mature and become polished and innovative enough to compete with western counterparts in markets outside of China, we could easily start to see users around the world voluntarily start switching to them. That could very well mark the beginning of the end of this golden age of democracy as we know it.
I highly recommend taking a look at Nathan Freitas's excellent talk "The Great Firewall Inverts": https://www.youtube.com/watch?v=KEJGqNf2rgk. In it, he explores how China's so-called Great Firewall is actually a bit of a misnomer because it's most crucial functionality is its ability to control the flow of information inside its own borders as opposed of keeping information out, how this ability is readily available to be exported to countries around the world in the form of internet services like WeChat, and what we can do about it (which is unfortunately, not a lot, other than to educate others on the very non-obvious non-immediate consequences of using these services, and to be vigilant about the spread of authoritarianism in our own governments).