How Apps Like WhatsApp, WeChat Helps Make Money Whilst Providing Free Texting And Calling4826581
Ever thought about just how a messaging app can make money while providing free texting and calling? WhatsApp users within India might be surprised to discover that there's a lot more to messaging apps than communicating. Here is how: by offering services such as digital payments, online shopping and content.
China's WeChat is one of the ultimate example of the vast possibilities which messaging apps hold. With over 900 million monthly active users, WeChat enables them to do almost everything from messaging, buying grocery, hailing cabs, purchasing online food and even offline payments at restaurants - all this without having to go to another app. These kinds of services not merely provide the company extraordinary customer stickiness, they also create a exceptional revenue model.
Right now, WeChat's competitors outside China such as WhatsApp, Facebook Messenger, Skype, Viber and Line are behind the curve on this front, although some have started on the way to becoming bigger platforms. "The actual reason chat apps are widening 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 shifting from being merely a provider of communication tools chat, voice and video) to becoming a platform for the exchange of services, payment mechanisms and also content consumption." WhatsApp, the largest messaging app on the planet with 1.3 billion monthly active users, introduced a business version in India early this week. "Based on research, we all know that people WhatsApp to speak with businesses. make business messaging more convenient for individuals and more productive 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 communicating platform to smaller businesses, a lot of who may be using WhatsApp already.
Even while Whatsapp has maintained the service free, it might broaden it to much larger businesses with added features for example analytics, in which it could charge a usage fee at a later stage, hence developing a revenue model, segment watchers said. This actually also is targeted at raising subscriber connect that it can leverage for future monetization of their other services. The bigger agenda - and a more crucial one - for these firms is to get active users to invest a lot more time on the app or services as well as make it viable for profit generation, according to specialists.
"Each technology company is competing for consumer stickiness, interaction as well as time spent on the app, and in order to keep them within the app's ecosystem they're broadening themselves to become platforms. Simply being messaging apps offering free services won't be a good revenuegeneration model," said Jayanth Kolla, founding father of Bengaluru-based research firm Convergence Catalyst.
