The Way In Which Apps Like WhatsApp, WeChat Helps Make Money Whilst Offering Free Texting And Calling1022497
Ever thought the way a messaging app can make money while giving free texting and calling? WhatsApp users at India could be surprised to discover that there is much more to messaging apps than communicating. Here's how: by providing services like digital payments, online shopping as well as content.
China's WeChat is probably the ultimate example of the large opportunity which messaging apps hold. With well over 900 million monthly active users, WeChat enables them to do anything from messaging, purchasing grocery, hailing cabs, buying online food and also offline payments at restaurants - all of this without needing to go to another app. These services not only offer the company incredible customer stickiness, they also create a remarkable revenue model.
For now, WeChat's rivals outside China such as WhatsApp, Facebook Messenger, Skype, Viber and also Line are behind the curve on this front, although some have started on the path to becoming greater platforms. "The actual reason chat apps are growing beyond communications is to create a sustainable monetisation strategy," said Neha Dharia, a senior analyst with a focus on messaging at London-based research firm Ovum. "Chat apps are moving away from being simply a provider of communication tools chat, voice as well as video) to being a platform for the exchange of services, payment mechanisms and content consumption." WhatsApp, the largest messaging app on the planet with 1.3 billion every month active users, introduced a business version in India early on this week. "Based on research, we all know that people WhatsApp to speak to businesses. make business messaging less difficult for individuals and more effective for businesses," a WhatsApp spokesperson said in respond to ET's questions. Whatsapp Business is a separate app from Whatsapp Messenger, aimed mostly at giving a direct communicating platform to small businesses, the majority of who may be using WhatsApp already.
Whilst Whatsapp has kept the service free, it could broaden it to larger businesses with added features for example analytics, by which it could demand a usage fee at a later stage, hence creating a revenue model, segment watchers said. This also is targeted at raising subscriber connect which it can make use of for future monetization of its other services. The larger agenda - and a more important one - for these firms is to get active users to invest more time on the app or services and also make it viable for income generation, according to experts.
"Each technology company is competing for consumer stickiness, interaction and time invested on the app, and in order to keep them within the app's ecosystem they are broadening themselves to become platforms. Simply being messaging applications that offer free services will not be a strong revenuegeneration model," said Jayanth Kolla, founder of Bengaluru-based research firm Convergence Catalyst.
