The Way Apps Like WhatsApp, WeChat Helps Make Money Whilst Providing Free Texting And Calling7192168
Ever wondered how a messaging app could make money while offering free texting and calling? WhatsApp users in India may be surprised to find out that there's much more to messaging apps than communicating. Here's how: by offering services like digital payments, online shopping as well as content.
China's WeChat is one of the best example of the large possibilities that messaging apps hold. With over 900 million monthly active users, WeChat assists them do anything from messaging, buying grocery, hailing cabs, purchasing online food and even offline payments at restaurants - all of this without needing to go to another app. These kinds of services not only offer the company incredible customer stickiness, they also create a remarkable revenue model.
For now, WeChat's competition outside China this includes WhatsApp, Facebook Messenger, Skype, Viber and also Line are behind the curve on this front, although some have begun on the way to becoming greater platforms. "The actual reason chat apps are widening beyond communications is to develop 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 away from being simply a provider of communication tools chat, voice and also video) to becoming a platform for the exchange of services, payment mechanisms and content consumption."
WhatsApp, the biggest messaging app in the world with 1.3 billion every month active users, introduced a business version in India very early this week. "Based on research, we know that people are using WhatsApp to speak to businesses. make business messaging more convenient for folks and much more effective for businesses," a WhatsApp spokesman said in respond to ET's questions. Whatsapp Business is a separate app from Whatsapp Messenger, aimed mainly at giving a direct communicating platform to smaller businesses, many of who may be using WhatsApp already.
Whilst Whatsapp has maintained the service free, it could broaden it to larger businesses with added features like analytics, from which it could demand a usage fee at a later stage, therefore making a revenue model, segment watchers said. This actually also is targeted at increasing subscriber connect which it can make use of for future monetization of their other services. The bigger agenda - and a more critical one - for these companies is to get active users to invest much more time on the app or services as well as make it viable for profit generation, according to analysts.
"Every single technology company is vying for consumer stickiness, interaction and also time invested on the app, and in order to keep them within the app's ecosystem they are widening themselves to turn into platforms. Merely being messaging applications offering cost-free services won't be a strong revenuegeneration model," said Jayanth Kolla, founder of Bengaluru-based research firm Convergence Catalyst.
