What’s in store for WhatsApp Business in India
WhatsApp Business has grown exponentially in the past 4 years to become a powerful distribution channel. Can it become India’s WeChat?
This post was originally published here and co-authored by my colleague Monil. We also published a small twitter thread to summarise our learnings.
What do Meesho, Dunzo, and Dealshare have in common?
Scaled startups today, all three started as a Whatsapp group.
In under four years since the launch of Whatsapp Business, the platform is likely to hit INR 1000 Cr in revenue in India this year (growth of 15000% from 2019).
But more importantly, Whatsapp is becoming a powerful distribution channel for India. With 400MN active users and the next half billion coming online, there may be a lot more to come.
Quick overview
For four years after the $19B acquisition of WA, the founders kept WA ad-free, focusing just on a great messaging experience. Soon after their departure, Meta finally launched WA for Business, to start monetising and making back some of their 💰. Several failed experiments later, Meta today has two core offerings:
Business App: Free app for SMEs, suited for 1:1 or small group chats, with basic features to manage their business, such as catalogues — that allows them to place ads on Meta (the main source of 💵).
Business Platform: An enterprise offering, allowing businesses to set up WhatsApp as a large-scale customer engagement channel via API. Customers pay per consumer session (session = one chat thread every 24 hours). In India, this pricing is INR 0.48 for company-initiated chats and INR 0.29 for user-initiated chats.
With these offerings, one doesn’t have to look hard to spot similarities with WeChat. They’ve also been trying to roll out payments, the last feather in Meta’s commerce cap, but that’s been navigating regulatory hurdles.
Whatsapp in India
While WA pricing in India is a pittance compared to global prices (1/10th of many others), it is 3–4X the price of SMSs. Perhaps the prices were doubled earlier this year and yet the demand continued to grow. Why?
The open rate of messages on WA is >95%, ~5x of other communication channels and conversion is 12x higher.
Following the ‘Jio’ effect, WhatsApp’s engagement rates have been unavoidable. It grew exponentially with ~400M monthly active users. In 2020, more than 40M people viewed a WA catalogue in India. But the real answer lies in the depth of the engagement — the avg. Indian user spends 20+ hours a month on WA. The open rate of messages on WA is >95%, ~5x of other communication channels and conversion is 12x higher.
Can Whatsapp become WeChat?
So far, WhatsApp business has had three main use cases:
Individual vendors and small sellers running their businesses on the WA Business app’, without the friction of building a website or listing on Amazon.
Enterprises reach thousands of users by sending deals and offers, or post-sales (notifications, tracking, customer support)
Startups using Whatsapp as a no-code proof-of-concept channel
Looking at early growth signs, here’s what we think may be in store for the future:
Enterprise / SaaS: The first generation of builders on WhatsApp, the original WA BSPs, such as Haptik, and Verloop, have been growing 20–30% m-o-m. As WA evolves, we’ll see more vertical-focused BSP2.0s such as Zoko and Bikayi, building a full e-commerce store, CRM, Chatbots and more on WA.
Commerce: If WeChat is any benchmark, Meesho 1.0, Dealshare and hyperlocal D2C brands selling on WA are just the starts of commerce. WeChat took social commerce to the next level with Minis (independent storefronts — now seen on Swiggy), end-to-end quick shopping experiences integrated with payments; WA Business Catalogues could grow into full in-app experiences (see Jio Mart-WA pilot here).
Edtech: WA has emerged as a powerful channel to access learner communities at scale. Startups are progressively leveraging Whatsapp to solve long-standing problems in education: content distribution to Bharat (Rocket Learning), community engagement (Doubtnut) and better communication among parents and teachers (Nushala).
Fintech: Earlier, WA was limited to learning communities (ValuePickr) and interactions with financial advisors. Lately, banks and fintech are also using it to engage with existing customers as well as expand to Bharat users. Several banks have launched chatbots and phone banking (SBI MF WA Assistant), and CashE launched instant loans through Whatsapp. This could well expand to micro-savings, mutual fund investing, loans and deeper wealth advisory engagements, especially when (and if) payments are built in.
Others: From WA-based agri-advisory bots and telemedicine to social gaming and content discovery, many other verticals are in their infancy, and could take off, as the WA Business ecosystem evolves.
Lessons from China
However, WeChat offers two lessons on how they enabled this super-app, which could prove to be bottlenecks for WA’s potential:
WeChat had won P2P payments in China — which is key to making this flywheel work. With its regulatory hurdles, WA Business in India is well behind Google’s GPay, Walmart’s PhonePe and Paytm.
WeChat kept a strong focus on customer value, and restricted ads on their feed to one a day — something Meta has not been great at (FB’s 1 ad every 10 posts). Overstepping here could send WA down the bulk SMS trajectory.