Asian chat apps generate most revenue

04 February 2016

TOKYO: Facebook-owned chat app Whatsapp broke the one billion user threshold this week, making it the most-used chat app in the world, but in the revenue stakes Asian chat apps remain on top.

They also provide clues as to how Whatsapp may monetise its service in coming years, as the region's major chat apps forge ahead with e-commerce functionality.

Recent revenue data reported by Tech in Asia shows that chat app LINE – which has just 212m users, mostly in Japan and Thailand – reported more than US$1bn in revenue last year, compared to just US$10m for Whatsapp.

Whatsapp holds an enormous market-share in Asia's crowded chat landscape – an estimated 35% of all internet users in the region, and growing. It is the most downloaded app in India and hugely popular in Hong Kong, Malaysia and Singapore.

But the platform has yet to capitalise on this popularity to create revenue, and Facebook CEO Mark Zuckerberg may look towards Chinese chat app WeChat for inspiration.

WeChat has built functionality that weaves it into almost every part of daily life, including bookings, payments, e-commerce and more. It now boasts more than 600m users in China alone.

There is no reported data for how much WeChat is earning from brand accounts or ads, but WeChat-linked mobile gaming alone generated RMB 4.5bn (US$701.4m) in revenue in the second quarter of 2015, up 11% on the previous year.

LINE's revenue is drawn from selling popular digital stickers, merchandise, virtual goods and services, and advertising to brands. Users can also shop online through the app, thanks to partnerships with Japanese e-commerce outlet Rakuten.

Recent comments by Zuckerberg indicate that Whatsapp is set to launch a B2C product, which will allow businesses and service providers such as banks to connect with users directly.

However, across much of South East Asia, many small businesses already allow customers to communicate with them via Whatsapp's existing free platform.

Data sourced from Tech in Asia; additional content by Warc staff