Just how Apps Like WhatsApp, WeChat Can Make Money While Offering Free Texting And Calling5838219
Ever wondered how a messaging app can make money whilst providing free texting and calling? WhatsApp users at India might be surprised to learn there is a lot more to messaging apps than communicating. Here is how: by offering services for example digital payments, online shopping and content.
China's WeChat is just about the perfect example of the vast possibilities that messaging apps hold. With well over 900 million monthly active users, WeChat enables them to do anything from messaging, purchasing grocery, hailing cabs, purchasing online food and even offline payments at restaurants - this all without having to go to another app. These services not merely provide the company extraordinary customer stickiness, additionally they create a remarkable revenue model.
For now, WeChat's opponents outside China this includes WhatsApp, Facebook Messenger, Skype, Viber and Line are behind the curve on this front, although some have started on the road to becoming larger platforms. "The reason chat apps are expanding beyond communications is to create a lasting monetisation strategy," said Neha Dharia, a senior analyst with a focus on messaging at London-based research firm Ovum. "Chat apps are shifting from being merely 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 very early this week. "Based on research, we all know that people are using WhatsApp to speak to businesses. make business messaging far more convenient for people and more efficient for businesses," a WhatsApp spokesperson said in response to ET's questions. Whatsapp Business is a separate app from Whatsapp Messenger, aimed mainly at giving a direct communication platform to small enterprises, a lot of who might be using WhatsApp already.
Even while Whatsapp has placed the service free, it could extend it to much larger businesses with added features like analytics, by which it could demand a usage fee at a later stage, thus making a revenue model, segment watchers said. This actually also is targeted at improving subscriber connect which it can leverage for future monetization of its other services. The larger agenda - and a more crucial one - for these businesses is to get active users to invest much more time on the app or services and make it viable for income generation, based on analysts.
"Every technology company is competing for consumer stickiness, interaction along with time invested on the app, and in order to keep them in the app's ecosystem they are broadening themselves to become platforms. Merely being messaging applications that offer cost-free services won't be a good revenuegeneration model," said Jayanth Kolla, founding father of Bengaluru-based research firm Convergence Catalyst.
