The Way Apps Like WhatsApp, WeChat May Make Money While Offering up Free Texting And Calling7420175

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Have you ever wondered just how a messaging app could make money whilst providing free texting and calling? WhatsApp users at India might be surprised to know that there's a lot more to messaging apps than communicating. Here's how: by offering services for example digital payments, online shopping as well as content.

China's WeChat is probably the perfect example of the great possibilities that messaging apps hold. With more than 900 million monthly active users, WeChat assists them do everything from messaging, purchasing grocery, hailing cabs, ordering online food as well as offline payments at restaurants - all this without having to go to another app. These kinds of services not just offer the company incredible customer stickiness, they also create a wonderful revenue model.

At this point, WeChat's opponents outside China such as WhatsApp, Facebook Messenger, Skype, Viber and Line are behind the curve on this front, even though some have begun on the road to becoming larger platforms. "The actual reason chat apps are growing 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 moving from being just a provider of communication tools chat, voice and video) to becoming a platform for the exchange of services, payment mechanisms and content consumption."

WhatsApp, the largest messaging app on earth with 1.3 billion every month active users, introduced a business version in India early on this week. "Based on research, we realize that people WhatsApp to talk to businesses. make business messaging less difficult for individuals and more productive for businesses," a WhatsApp spokesman said in respond to ET's questions. Whatsapp Business is a different app from Whatsapp Messenger, aimed largely at giving a direct communicating platform to small enterprises, a lot of who may be using WhatsApp already.

Whilst Whatsapp has placed the service free, it might expand it to larger businesses with added features for example analytics, in which it may well demand a usage fee at a later stage, thus developing a revenue model, segment watchers said. This also is targeted at increasing subscriber connect that it can make use of for future monetization of its other services. The bigger agenda - and a more crucial one - for these corporations is to get active users to invest more time on the app or services as well as make it viable for revenue generation, based on analysts.

"Every technology company is competing for consumer stickiness, interaction as well as time spent on the app, and in order to keep them in the app's ecosystem they're broadening themselves to become platforms. Merely being messaging applications offering cost-free services will not be a good revenuegeneration model," said Jayanth Kolla, founding father of Bengaluru-based research firm Convergence Catalyst.

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