The Eventual Rise of Whatsapp as a Super App

Facebook’s masterplan to convert the free messaging service into a revenue-generating machine

Do a quick survey — look at everyone around you and see if they have a Whatsapp account that they’ve used today. 99.99% of the time you’ll find that everyone uses Whatsapp. In fact, unless you’re in China or parts of SEA, Whatsapp dominates your countries messenger space:

With a lead in 133 countries, Whatsapp looks ripe for commercialization — something that has already begun with Whatsapp for Business (which had over 300 million users in 2019, and currently, 175 million users each day who message a business account). With that volume, there is a good market fit for further commercialization via the Super App.

Why not Messenger?

Obviously, the next question would be — why not Messenger? It is after all the most popular messaging app in 75 countries! Let’s look at why Messenger wouldn’t make the cut (some of these are personal assessments of the apps involved):

Privacy Concerns

However, think about the mental block that people have with Messenger: it is connected to their Facebook account and somehow, there is lesser confidence of privacy with Messenger. Add to that the fact that the images that you share over Messenger can & will be processed for face detection (and much more!), Whatsapp feels like a more confident place.

Ease of onboarding

With Messenger, you NEED a Facebook account. For the uninitiated (quickly declining in count), having a Facebook account requires going through the hassle of signing up and verifying. However, with Whatsapp, it’s as simple as entering your phone number and verifying. Your contacts (the ones you call) are already present on Whatsapp and you don’t need to ‘friend’ anyone to reach out.

Interface

The interface of Messenger is modern. It has so many options — which is really cool for the average teenager to engage with and express themselves. However, the interface doesn’t inspire the seriousness that Whatsapp’s plain & simple interface provides. It is easier for someone to trust Whatsapp with their card details than it is for them to trust Messenger with it.

In fairness, Messenger did attempt to be a ‘Super App’ by integrating with Uber — allowing users to book an Uber ride directly from the app. I do not know if the feature still exists, but given the fact that they didn’t integrate any more apps indirectly shows that it did not work out as well as Facebook imagined it.

The Road to Super App

Whatsapp is already on the way to be a Super App in some countries. The following actions by parent company Facebook and integrations of a few key services should pave the way to Super App status:

Payments integration

The key to any Super App is the ability to send & receive money. That’s the entire benefit that the business gets — verified users with bank details integrated. Whatsapp has already launched payment features in the chat for India & Brazil (which are two of its biggest markets). Also, by partnering with local vendors, they’ve launched payments in South Africa(Telkom) and Indonesia(Gojek).

Key Acquisitions/Investments

The following acquisitions/investments will prove to be valuable in Whatsapp journey as the Super App:

  1. Gojek
    Gojek is already a massive hit in Indonesia — a huge market for Facebook. In fact, in some places, the Internet = Facebook. Investing in Gojek has enabled Facebook to both learn and direct the roadmap for Gojeks ride to dominate the region.
  2. Kustomer
    A CRM for the modern age that relies on modern communication tools like Whatsapp/Messenger to engage with customers. This will provide the retailers on the Super App to streamline the CRM process. Potentially could be a service offered.
  3. Servicefriend
    Another CRM focused tool that builds conversational bots that can solve a large number of customer service problems on Whatsapp.
  4. Facebook F2
    The financial arm of Facebook as it tries to consolidate efforts and payments across the globe. It is in Facebook's interest that there is a globally available payment method that can function as an alternative to local ones — providing larger retailers a one-size-fit-all. The key here is to get the users engaged for the retailers. And as I said earlier, solving the payment problem is the key to being a Super App. If you can solve that, you’ll get brands/retailers integrated in no time!
  5. Jio
    The investment in Jio — India’s largest(popular!) network provider has Facebook at the helm of India’s digital transformation. This partnership will solidify the standing Facebook has on the population.

Baby Steps

After launching Whatsapp for Business, they’ve started experimenting with Product catalogs, QR codes & Cart functionality to bring smaller retailers on board. If your next-door grocery provides this functionality, you wouldn’t want to open another app to buy groceries, would you?

The road is long and marginally difficult for Facebook as they try to spread their risk and move slowly towards the Super App state.

A few things they’ll have to consider:

Local Regulations

Every country runs differently. While they’d want to have a uniform experience across the board, it might be difficult to commit to a single experience for all customers. In some regions, commercialization may not possible directly as there would be a need for KYC documents to be shared before making payments. Some regions might have strong anti-money laundering laws that might severely limit the spending per person.

Integration overheads

There will be some effort needed to integrate with the Super app. Smaller businesses with little or no digital infrastructure will need to spend an arm to integrate, which may not make sense. A separate integration team might be needed to help & assist with the integration.

Privacy Concerns

As always, with anything Facebook, privacy is a big concern. The only silver lining is that Whatsapp is not directly integrated with Facebook and hence, a bullet can appear to have been dodged.

Local Competition

Super apps are being built every day across the globe. The race is on to capture the mind-space. The issue with the local competition isn’t with the acquisition of customers. The issue is more with retailer fatigue — getting the minimum viable retailer count to deem the Super App as successful will need a lot of retailer coaxing. However, knowing how deep Facebook is with retailers via their Facebook Ads platform should make the process smoother.

What happens next?

It would be interesting to see if Whatsapp/Facebook publicly announce their plans to become a Super App. Right now, they’re aligning themselves with ecommerce level features, but to reach a WeChat level of experience, there will need to be a lot more development in the ecosystem. After all, Facebook can’t have their fingers in every pie.

Ads integration in Whatsapp

I’m speculating here, but I think the next step would be to integrate Facebook Ad targeting within Whatsapp — allowing retailers to send (expensive) notifications to their customers. While this can seem a little too intrusive, the response rates for Whatsapp are spectacular (80–90%), which means that the retailers will need to be smart about whom they target and when. This cannot be a spray & pray, throw your money at the problem sort of thing. The upside of this would be that the users get valid, timely messages on their device — furthering their engagement with the app.
Note: This isn’t like Whatsapp for business feature where you can do targeting. This is more like running Facebook ads within your Whatsapp chat with the retailer sending a message/chat to engage.

Extending Whatsapp for Business with Super App-ish features

Understanding that the B2B space is more secure than B2C, they could launch a few integrations within the Whatsapp for Business app like CRM, Chat, Invoicing, etc that will help retailers simplify their processes. Again, speculative, but it will help in getting into the retailer’s ecosystem and test the technical waters.

Thank you for reading! Most of the piece is speculative. I’d love to hear your thoughts on this. Reach out on Linkedin or here!

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Simplifying Complexities for a Living | rkakodker.com

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