Can Whatsapp’s business platform help Meta recover losses in FB ad biz?

WhatsApp is the most popular app among Indian consumers. The little green messaging app has over 530 million users, compared to 410 million on Facebook and 210 million on Instagram, as per the government’s 2021 data. No surprises then that Mark Zuckerberg is betting big on WhatsApp’s business version, Business API, which could be the next big driver of monetization for Meta, especially since his Facebook ad business has suffered a massive loss this year.

With the help of Businesses API companies can send catalogs for product or services showcase, discount vouchers, promotional offers, coupons, product launch updates, alerts, automated messages to communicate with customers across India.

Last week, Zuckerberg announced WhatsApp’s partnership with Salesforce Inc. globally. Salesforce is an American cloud-based software company that provides customer relationship management (CRM) software and applications focused on sales, customer service, marketing automation, analytics, and application development. Earlier, in May 2022, Zuckerberg had announced the launch of the “cloud-based” version of the API which offers easy access and customisation of Cloud API to companies to speed up their response time to customers.

These developments have come at a time when Meta platforms’ shares lost roughly half their value this year. Prime reasons behind the loss in net worth were Apple’s privacy settings (which reduces targeting capabilities by limiting advertisers from accessing an iPhone user identifier) and Meta’s rebranding and renewed focus on Metaverse which may take a decade or so to make this long term preposition profitable, experts say. Zuckerberg’s own net worth dropped by a massive $71 billion in 2022, according to the Bloomberg Billionaires Index.

In the short-term, WhatsApp is among the initiatives to focus on for growth, he had hinted in April 2022 itself. “After Facebook and Instagram, WhatsApp is really going to be the next chapter, with business messaging and commerce being a big thing there,” he said.

In August end, Meta and Jio Platforms joined hands for end-to-end shopping experience on WhatsApp. Mukesh Ambani-owned Jio is the largest mobile network operator in India with more than 400 million consumers.

“In the markets/countries where Whatsapp has a larger base than FB messenger, we should see something coming up from Whatsapp which will facilitate commerce. However, it is the user who will be the determining factor whether Meta will succeed in its objective or not,” Kumar Awanish, Chief Growth Officer, Cheil India, says.

Business API in India growing

India is one of WhatsApp’s largest markets, but monetization has been a bit challenging so far. Business messaging may well be the answer.

With nearly 500 million WhatsApp users in the country and about 6.3 crore (63 million) small and medium-sized businesses, the American tech giant has sensed a vast business potential in SMBs, especially the D2C brands.

Many Indian brands, including SMBs, have already started using WhatsApp Business API for greater customer engagement. “Many large and small businesses are going digital and tapping new geographies through API,” a WhatsApp India official said, requesting anonymity.

The company has not shared any statistics with regards to number of customers, revenue or growth plan pertaining to API so far.

e4m contacted WhatsApp India team to seek insights and comments on the story. The company’s response in this regard is awaited.

Why Now?

Founded in 2009, WhatsApp initially made money from a 99 cent annual subscription because its founders despised ads. After the sale, founders quit after they realized that Meta was trying to monetize the app with advertising.

Observers have been watching closely for signs the company plans to monetize the platform more. However, Meta had dropped that idea in 2020 and said it would try charging businesses to engage with customers on the app instead.

On the other hand, WeChat — a messaging competitor in China — generates $500 million every month largely from payments, advertising and acting as a gateway to games, according to an estimate by market intelligence firm Sensor Tower.

Brands Speak

Anand Pejawar, Deputy Managing Director, SBI General Insurance, says that the response rate and engagement rate on WhatsApp is significantly higher than traditional messaging platforms.

“Our customers come from across a wide range of socio-economic strata. WhatsApp is one of the links connecting them all, just like SBI General Insurance. We are certain that WA API will continue to evolve to meet the needs of businesses and customers both,” Pejawar added.

Deep Bajaj, Founder & CEO, Sirona Hygiene, says that the platform plays a key role throughout the customer journey – from brand building/marketing to engagement, conversion and retention.

“We recently launched India’s first Period Tracker on WhatsApp. Menstruators of all ages and in any location can use this tool to keep track of their periods. The Period Tracker can be used to track three period-related goals – track periods, conceive and avoid pregnancy,” Bajaj explained.

About one lakh customers started using the tracker within the first month of its launch. We also use the platform in the pre-sales and post-sales customer journey, Bajaj noted.

Arihant Jain, Vice President Marketing & Operations at Earth Rhythm, says the brand has integrated multiple services ranging from new launches to customer support to order confirmation with API and his team is also constantly en-route to integrate a seamless shopping experience, every time.

Cost effective & better recall value: Ad agencies

Starting 2021, WhatsApp marketing has observed a quantum jump, marketing experts say. Almost all forms of Whatsapp marketing activities, starting from Customer acquisition, Cross-sell/Up-sell, dispatch information to after sales support are being used by e-Commerce and D2C businesses.

Kumar Awanish, Chief Growth Officer, Cheil India, says, “While, real-estate and SMEs are using it as spray and pray marketing; ecommerce and D2C brands are considering it as a serious channel for after-sales activity. This makes sense because A) Customers allow you to communicate through it so you can make the most out of it with complete authenticity B) Cost of reaching out to your consumer goes down and your communication gets the required attention.”

He further noted that scale and frequent usage can only be seen for CRM activities which are mostly shipment status and after sales support.

Maanav Mohan, Co-Founder, The Blue Digit and The Blue Beans, explains, “When you buy a product on Amazon or Flipkart there is no one guiding you through the choices or available to answer your questions immediately. This leads to a delay in trust creation and hence a delay in conversion for the brand. With platforms such as Whatsapp, brands can answer the buyers’ doubts and questions in an instant and in doing so can create trust, which leads to easier conversions.”

Mohan further notes, “Many D2C brands are currently reaching out to potential buyers (who are coming to the website and not buying) through WhatsApp, to create a recall for the potential customer to check the products out again. This method has been helping a lot of D2C brands make conversions for their businesses. It has proven to be the best use case when your target group is above the age of 35.”

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