Battle of the instant messaging apps; will WhatsApp still be the king?

As Line, WeChat, Hike, Nimbuzz and other IM apps evolve with features, increased user base & B2B partnerships, is WhatsApp's monopoly being challenged in India?

e4m by Sonam Gulati
Published: May 27, 2014 8:06 AM  | 5 min read
Battle of the instant messaging apps; will WhatsApp still be the king?

With WhatsApp recently being acquired by Facebook for a huge $19 billion, the social messaging apps market got a new fillip. The market in India had started opening a few years earlier only with the coming of all global big players such as Japan’s IM app Line and China’s IM app WeChat coming to India.

While WhatsApp continues to be the market leader globally, other chat apps claim to have a decent user base as well. For some perspective, as of January this year, WhatsApp claims to have 430 million active users globally, of which 35 million users are from India. Added to that the IM app sees 18 billion messages being sent and 36 billion messages being received every day. In addition, 500 million pictures are sent every day. That is huge level of engagement. Chinese Internet major’s IM app WeChat has around 355 million users globally but majority of its user base comes from China, while 40 million users are from outside China. Similarly, our native chat app Hike (from the stable of Bharti Softbank, a JV between Bharti Enterprises and Japan’s Softbank) boasts of a user base of more than 15 million.

Noticeably, while WhatsApp has been able to win away user base and money by a simple subscription model and fewer add-on features (read more about it here- What makes WhatsApp tick in a highly competitive market?) other apps are not wasting time either. Apps like WeChat, Nimbuzz, Hike, Line are offering various value added features which make for alternate revenue streams as well something differentiated for the user.

For instance, WeChat has recently launched its real-time location sharing or 1GB cloud storage or the paid stickers all these features make up for some kind of USP that users don’t get on WhatsApp. But does this not complicate the app? No, say the promoters. “The basic need is served by almost all the messaging apps so the challenge is to bring that innovation on top of it. Over a period of time people will value this innovation, they will get used to it and that is what our effort is too. If they like it then great, we would like to serve them more. If they don’t like then we would obviously want to bring about changes in our product,” said Nilay Arora, Head of Business, WeChat India.

WeChat has also launched brand accounts on its app which users can follow, somewhat like Twitter. People can see brand updates and the brands can reach out to the audience. However these brand pages are not yet monetised. “Most of the brands that are reaching out to us or we are partnering are the selected brands. The platform is not open for anyone to open their account with WeChat. So we see which kind of brand is relevant to our audience, can add value to their lives and as of now we control which brand accounts are there,” Arora added.

Another player in the market, Nimbuzz has also indulged in a lot of B2B partnerships in a similar manner. Joby Babu, COO, Nimbuzz added that chat apps are a brilliant platform for brands to reach out to the users. The app claims to have a 150 million user base of which more than 20 million come from India. Babu indicated that there are several ways in which the app has scouted for additional monetization routes like chat buddies (paid brand accounts), mobile advertising, virtual commerce via app, etc.

Mostly chat apps have stayed away from direct advertisement as these apps are very personal and user doesn’t encourage display advertisements on them. But brand accounts and paid stickers are two models that seem to be working well for the companies. Traditionally, stickers have done well in other markets and now in India as well they are picking up. Hike, Line, WeChat, Nimbuzz all but Whatsapp offer stickers currently. While Hike stays away from any monetization as of now others do sell premium sticker packages.

“Sooner or later, the global business models will start to work in India too. However, given a billion people will access the internet for the first time on mobile; the product has to be simple and has to solve the market's existing problems effectively,” said Kavin Bharti Mittal, creator of Hike Messenger. He added that while value added features do give a distinction to the app at the end it lies in the user interface and basic messaging experience.

While other chat apps are busy building their business around such features and paid applications should WhatsApp worry about losing out  in the market? “The proof of the pudding is in the user base. People can claim what they want, but you can't deny that half a billion users are connected via you on mobile phones. This is the barrier that others have to overcome,” said Mahesh Murthy, Founding Partner, Seedfund on how other apps can build business around WhatsApp’s popularity. He further added that road ahead for WhatsApp is tricky post the acquisition. “I believe WhatsApp will lose its charm if it starts getting combined with Facebook Messenger - an over-featured, less-reliable product. If Zuckerberg was wise, he'd leave WhatsApp alone. The only feature I can conceivably see WhatsApp add is integration with the Facebook contacts address book, for automatically adding people whose mobile numbers are visible to you,” he shared on what synergies could be in Facebook and WhatsApp post the merger.

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