OTT chat app, WhatsApp, has long since launched its business messaging service – WhatsApp Business which promises to help enterprises reach its billions of connected users. So why has it been slow to take? Nick Lane, Chief Insight Analyst at Mobilesquared takes a look at the issues.
WhatsApp will hit 2 billion users globally in April 2020, according to the latest research by Mobilesquared. The last official communication from WhatsApp was the 1.5 billion figure that has continued to be quoted since its release in December 2017. In fact, WhatsApp has maintained radio silence ever since it launched a version for businesses.
It is simply unrealistic to assume that WhatsApp reached its ceiling at 1.5 billion users. In 2017 alone it grew by 300 million users – more than the majority of alternative messaging apps have achieved in their entire ‘apptime’. Mobilesquared calculates that its growth dipped in 2018, with around 178.9 million users added, before rallying in 2019 adding almost a quarter of a billion (243.3 million), ending the year with 1.92 billion users.
Right now, in a world where scale is everything, digits that have “billion” next to them are the norm, and WhatsApp is no exception.
To try and break that down a little, WhatsApp is operational in 180 markets, which means on average, there are 11.13 million users per market. If we remove India (approx. 420 million users), and Brazil (approx. 125 million users), that figure drops to an average of 8.68 million.
Right now, in a world where scale is everything, digits that have “billion” next to them are the norm, and WhatsApp is no exception. Not surprisingly, a platform boasting 2 billion users is going to attract the attention of the world’s brands.
WhatsApp Business activation slower than expected
WhatsApp Business (in its various guises for large and small businesses) has now been around for two years. There are around 50 partner companies globally offering WhatsApp to big businesses, while some companies are big enough to integrate directly into WhatsApp and avoid any third-party platform costs.
Then there are the WABAs (WhatsApp Business Accounts). Mid-way through 2019 around 8 million small businesses were believed to have downloaded the WhatsApp Business app. As of January 25th 2020, Google Play stated that the WhatsApp Business app had been downloaded over 100 million times. WhatsApp confirmed to Mobilesquared that it now has over 5 million active WABAs.
WhatsApp has the users and over 100 million businesses interested in using it, but with only 5 million active WABAs, this represents a 5% conversion rate, which indicates a disconnect somewhere within the ecosystem.
As part of our on-going research for the release of our WhatsApp Business Messaging Databook at MWC 2020 next month, WhatsApp might not be the massive threat to A2P SMS revenues, and potential RCS revenues, that the business messaging community believe (and openly say) it will be.
Firstly, brands cannot connect to 2 billion users as often stated in marketing blurb designed to attract brands and businesses. For any business to communicate with a WhatsApp user, that individual has to opt-in. As the terms and conditions to WhatsApp for businesses clearly states:
Create a quality experience [WhatsApp business]
- You may only contact people on WhatsApp if: (a) they have given you their mobile phone number; and (b) they have agreed to be contacted by you over WhatsApp. Do not confuse, deceive, defraud, mislead, spam, or surprise people with your communications.
WhatsApp Business Solution (WhatsApp Business API) Specific Terms
- The below sections on “Opt-in” and “Acceptable Message Types” only apply to the WhatsApp Business Solution (WhatsApp Business API).
- Opt-in: In order to send a WhatsApp message to a person, you must receive opt-in permission in-line and contextually during the relevant user flows. For example, to receive a receipt via WhatsApp, a person must opt in during a purchase flow. Opt-in obtained without context and in any manner not related to an action the user is already taking, does not comply with this policy.
Then there is the view that because WhatsApp for consumers is free, it will be for free businesses as well. This is not the case. For big businesses there are monthly operational costs to consider, ranging anywhere from $5,000 up to $20,000 per annum, and dependent on the provider. For the lower price this will not include any messages, whereas a company paying $1,500 per month will receive a bundled deal including messages.
Then there is the view that because WhatsApp for consumers is free, it will be for free businesses as well. This is not the case.
Content also has to meet WhatsApp’s stringent guidelines. Templates for any message have to be submitted to WhatsApp for approval, though this is not surprising as the company wants to protect its platform from unwanted spam and fraudulent traffic.
Business interest in WhatsApp remains extremely high, but adoption remains slow. At a business messaging event in London in October last year run by mGage, Mobilesquared moderated a panel and asked the room of around 50 brands how many were using WhatsApp for their business or intended to use; a resounding zero on both counts.
There is undoubtedly huge demand from businesses for WhatsApp, and the initial adoption of businesses downloading the business app is enormous. But the majority of these businesses appear passive and yet to become active.
This indicates that mobile operators have more time than expected when it comes to deciding their long-term messaging strategy, and shouldn’t pursue a knee-jerk reaction to a threat that simply isn’t there yet.
That’s not to say it isn’t coming.
What does this all mean? All will be revealed in our WhatsApp Business Messaging Databook.
Take a look at Nick’s original blog post here.
Nick Lane, Chief Insight Analyst, Mobilesquared