The Way Apps Like WhatsApp, WeChat Can Make Money Whilst Offering Free Texting And Calling8015775
Ever thought about just how a messaging app can make money whilst offering free texting and calling? WhatsApp users at India may be surprised to learn that there is much more to messaging apps than communicating. Here is how: by providing services for example digital payments, online shopping and content.
China's WeChat is among the perfect example of the vast opportunity which messaging apps hold. With over Nine hundred million monthly active users, WeChat enables them do everything from messaging, buying grocery, hailing cabs, ordering online food as well as offline payments at restaurants - all of this without needing to go to another app. These services not merely offer the company extraordinary customer stickiness, in addition they create a exceptional revenue model.
Right now, WeChat's competition outside China this includes WhatsApp, Facebook Messenger, Skype, Viber as well as Line are behind the curve on this front, even though some have started on the way to becoming larger platforms. "The reason chat apps are growing beyond communications is to develop 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 from being simply a provider of communication tools chat, voice and also video) to being a platform for the exchange of services, payment mechanisms as well as content consumption."
WhatsApp, the biggest messaging app in the world with 1.3 billion monthly active users, introduced a business version in India early on this week. "Based on research, we realize that people WhatsApp to speak with businesses. make business messaging far more convenient for individuals and much more efficient for businesses," a WhatsApp spokesman said in response to ET's questions. Whatsapp Business is a separate app from Whatsapp Messenger, aimed mainly at giving a direct communicating platform to small enterprises, the majority of who might be using WhatsApp already.
While Whatsapp has kept the service free, it may expand it to bigger businesses with added features for example analytics, by which it could demand a usage fee at a later stage, therefore making a revenue model, segment watchers said. This also is geared at increasing subscriber connect which it can make use of for future monetization of its other services. The larger agenda - and a more critical one - for these businesses is to get active users to invest more time on the app or services and make it viable for profit generation, according to analysts.
"Each and every technology company is competing for consumer stickiness, interaction and time spent on the app, and in order to keep them within the app's ecosystem they are broadening themselves to turn into platforms. Simply being messaging applications that provide cost-free services certainly won't be a good revenuegeneration model," said Jayanth Kolla, founder of Bengaluru-based research firm Convergence Catalyst.
