Smartphones have revolutionized the way we communicate with each other and Messaging Apps are arguably the most commercially successful among the millions of apps available across various App Stores. The options are as plentiful as they are diverse with new apps flooding in every day aiming to take “your messaging experience to the next level“. Standing tall among thousands of such messaging apps is WhatsApp and as a testament of its continued success, CEO, and Co-Founder Jan Koum has revealed that the number of monthly active users of WhatsApp has reached 900 Million mark. With a staggering 200 million headroom over its nearest competitor, Facebook messenger, this behemoth looks well on its way to make the billion mark before this year is over!
Acquired by Facebook $22 Billion, WhatsApp has since then doubled its number of active users. Ever since its inception in 2009, WhatsApp had been dependent on an annual subscription charge of US$1, the first year being free. This model was dropped once Facebook acquired them and now what remains to be seen is how they decide to make money off their rapidly approaching a billion user base. We will take an in-depth look at the various options Facebook has. But first, a quick peek at WhatsApp’s fairytale rise to the top.
The Growth of WhatsApp: The Road to 900 Million
WhatsApp had an early bird’s advantage in the smartphone messaging game as they have been around since 2009. However, it would be almost four years, April of 2013, when they would reach the 200 million users milestone. The next million came in just six months, on August of 2013, WhatsApp was at 300 million users figure. From there onwards, they have steadily grown by adding approximately a million users every 4 months.
With stiff competition from other Messaging Apps, the growth rate has tapered off a bit in recent months as they took 5 months for the climb from 800 to 900 million active monthly users. Yet, what they have achieved is no mean feat, in fact, to put these numbers into perspective; Twitter has just over 300 million monthly active users. Facebook Messenger, their closest rival in this space has 700 million and their parent company Facebook just crossed 1 billion daily active users.
What’s Next for WhatsApp?
To sum it up in one word, monetization.
As Mark Zuckerberg previously said that there are several ways to monetize once a product hits one billion users, and with that magical number fast approaching, we take a look at the options that Facebook have.
Jan Koum, co-founder of WhatsApp, and his team have adamantly said “No ads! No games! No gimmicks!” in their app so the options that have worked out so well for others like WeChat and Line might not be suitable for WhatsApp.
The answer lies in another one of the company’s messaging app, Facebook Messenger. After breaking off from the main Facebook app, the messaging service has quickly grown into a full-fledged app on its own. The fact that it captured 500 million users in less than 3 months of its separation from the main Facebook app means that the features and utilities of the app have found favour among the smartphone users. In August of this year, Messenger launched a concierge service that could help you to track down and easily purchase whatever you’re looking for. Although still in closed beta, this service has the potential to change the way we shop online. We can expect this service along with Facebook for business to merge with WhatsApp.
WhatsApp is popular in developing countries like India and Brazil where the true potential of e-commerce has not yet been realised. With the next billion looking to get smartphones, WhatsApp has the potential to make it big and make Facebook a lot more than the $22 Billion they put in it. But wait, not everything is falling in favor of WhatsApp!
Major Hurdles In the Way for WhatsApp
WhatsApp is facing stiff competition both from its in-house competitor Messenger as well as WeChat and QQ Mobile. In the growing years, the simple UI and ease of use of WhatsApp attracted a lot of smartphone users. In fact, in countries like India where the penetration of smartphones and social media is not that high, and people still depend mainly on word of mouth, WhatsApp remains highly popular.
In markets like the US and China, there has been a shift away from WhatsApp and towards other apps. While the teen population has moved away to apps like Snapchat for security reasons, the allure of chat stickers and free calls from apps like Line and Viber have been a reason as well.
With both WhatsApp and Messenger on top of the charts, Facebook would be happy that their products are doing well.
Their closest competitor outside of the company is WeChat and while the numbers might not be threatening, the steady growth of their numbers might be a cause for concern. WeChat has their grips firmly in China and off late trying to expand in neighbouring countries as well. To put the pressure on, WhatsApp would be eager to claim a share of that pie.
WhatsApp Users: Reality Check
All said and done, there are still few areas that need attention to analyse the growth in all perspectives. Although the raw numbers look impressive, the truth may be a bit removed from it. WhatsApp comes pre-installed in many smartphones. And monthly active user count is based on if a person opens the app on their phone once in the 30 day period. Given that engagement is the main criteria for Messaging apps, especially for messaging apps, this metric of active users may be a misleading in terms of user retentivity and engagement, both essential points for monetization.
Few of you may counter the above theory as most of the apps and social networks count ‘one-login-30-day’ as an active user. However, owing to the number of average chat sessions a user has on messaging apps, counting one session in a 30 days window is definitely not convincing enough.
What We Can Expect in the Future
WhatsApp has recently launched a WhatsApp calling service. This could be a potential game changer. In developing countries, where WhatsApp’s main customer base is in, call rates are still pretty high. With Voice calls over data, many people would prefer to use this service over traditional methods. Also, companies often bundle data plans with new smartphone purchases that have WhatsApp preinstalled. This could be a potential game changer with the power to shake up the telecom industry.
WhatsApp also has several deals with network providers like the one in Germany that allow users on the network to use WhatsApp without consuming any data from their monthly data cap. With more such deals, people will be drawn towards WhatsApp even more as mobile data remains expensive even to this day.
WhatsApp also has a Web-based version of their app which lends to their versatility and cross platform appeal. With this sustained rate of growth for a couple more years, WhatsApp will be able to surpass Facebook’s 1.49 billion monthly active users.
Only time will tell where this messaging app ends up, but for now, the billion is nigh!
