WhatsApp is no longer just a chat app for millions of Indians, with Bang in the Middle’s Naresh Gupta examining its possible evolution into a shopping channel.
There is an old saying that India lives in its villages. That has now changed – India lives on WhatsApp.
According to media reports, Meta claims there are 400 million WhatsApp users in India. That is a staggering number. Data suggests that India has 600 million smartphones and a 400 million user base for WhatsApp indicates how ubiquitous the app has become. This is the most installed app in India currently. Its popularity is an indication that users have multiple uses for the service and WhatsApp is no longer just a chat app. The two-way secured chats are lending themselves to greater branded conversations.
Today, we receive railway tickets, airline tickets, bank account updates, services and utility bills, movie tickets, even building entry permissions on WhatsApp. Business has found newer ways to leverage the always on connections.
The WhatsApp advantage
There is a massive advantage that WhatsApp offers to brands that are building the omnichannel play – cost savings for merchants as there is no hosting fee. Meta’s secure hosting eliminates the cost of hosting and the cost of running the chatbot as SaaS – software as a service – is minimal. The chat service that the platform provides eases the conversation between brands and users. Meta has also integrated WhatsApp into FB messenger and Instagram, helping people discover and have conversations with brands and services.
The gamechanger
India changed the way people transacted when it unveiled the UPI service. While the wallets were the early mover in the digital payment ecosystem, the wallets are not inter-operable; they locked the user to the platform. UPI freed up the system and brands like PhonePe took full advantage and built a robust payment infrastructure.
WhatsApp did experiment with payment services in the past but today, payment applications on WhatsApp are universal. That makes the app the biggest payment processor. In reality, that doesn’t make it the largest brand, it just makes it the app with an ability embedded and available on call. This becomes a critical tool to make commerce happen.
Shopping on WhatsApp
Clearly, Meta is inspired by what WeChat is doing in China, which is one single app that spans all a consumer’s needs. WeChat runs the lives of people through a single app and it has both size – two billion users – and expanse; you can even pay your rent through WeChat. If anyone has a chance of being another WeChat, it is WhatsApp.
That’s where the new connective app is moving, not just for conversation but discovery, engagement and payment – all of that can be done on WhatsApp.
Meta has just unveiled this with JioMart, where we can shop for the entire catalogue of JioMart without leaving the app. This eliminates the need for a separate app and switching between apps. JioMart can trigger the discovery through a message, cross-sell and upsell within the app, and close the transaction without the user leaving the app. At the same time, the user can shop and chat with friends. By any stretch of the imagination, this is the only app that should be there on the phone as the entire consumer decision journey is in one location.
Will this be a winner?
The whole social selling strategy will undergo a change. No longer will brands need to create social media posts to take users to the brand page. Nor will there be brand intrusions on Messenger to announce sales or offers. Theoretically, they can do that at a single destination and have a better response rate. This looks like a sure winner although I see challenges ahead.
Challenge 1: Relevance
The big challenge will be for brands to build relevance for WhatsApp as a shopping channel. For the average user, WhatsApp is ingrained as the channel for personal communication and not anything more than that. With a question mark over content quality and declining trust in what consumers consume as content, brands will face the challenge of relevance.
Increasingly, people are looking at confirming what they consume on WhatsApp with another source, so will they do the same for brands? The early indicator is the limited use of payment services. Despite the presence, the transaction volume is minimal and the leading payment processing apps have not seen a decline in volume.
Challenge 2: Multiplicity
With the offer of shopping, will the brands close down their apps? Will they be brave enough to allow only WhatsApp and not their own app? Brands will weigh the ownership of data, the ability to cross-sell and upsell, and mining the data for remarketing – things that may be tough if you are only on a third-party server.
There is a limit to the experience you can drive on a third-party messaging app. A brand having its own app is the biggest differentiator. Now, imagine if there are different offers at two different destinations with two different fulfilment strategies – consumers will actively search and shop from the destination that offers the better solution. I see this multiplicity being a massive issue for brands trying to be on WhatsApp
Challenge 3: Changing shopping preferences
Shopping habits are rapidly changing. With the advent of 5G, faster internet on mobiles and better cameras, this is likely to change at a pace greater than we can imagine.
Until now, the transition from physical to digital shopping has been driven by large aggregators and the smaller brands have ridden the wave. A faster internet will make more businesses go online. These businesses will build their own presence and not depend on large aggregators like Flipkart. JioMart itself is helping retailers embark on the digital journey. There is a new wave of video commerce which has much potential.
Conclusion
Meta’s play to leverage the reach of WhatsApp and turn it into a shopping channel seems like the perfect thing to do, even as the consumer landscape is changing and new subscribers have different expectations of the platform. We will soon have a scenario where the new subscribers will have no idea of the history of the messaging apps and they may see them as a single destination for commerce and conversation. There is an even bigger chance that WhatsApp may cease to exist as a personal conversation platform and that may lead to a whole new wave of evolution.
That blue tick that was such a thing at one time but it may lose its importance completely.
