BY ANTONY MUTUNGA
In 2014, Facebook acquired the popular messaging service, WhatsApp for about Sh2.07 trillion ($19 billion) after years of tracking it because of its rising popularity and it’s potential as the Facebook killer.
The acquisition saw many expect that the newly acquired WhatsApp will follow in the footsteps of Facebook and include advertisements as a monetization strategy. However, after trying to do so, the parent company gave up on adding advertisements to the messaging service earlier this year.
Having not given up on the monetizing of WhatsApp, the parent company has taken another path to earn some income from it. Facebook has announced changes on WhatsApp Business whereby it will start charging companies for some of its chat services. The product, which was introduced in 2018, provides a platform for businesses and enterprises to interact with their customers by providing updates, support and the option to run their business on the popular messaging service.
Alongside the WhatsApp business app, Facebook also introduced the WhatsApp business API. The application has garnered over 50 million business users and over 175 million people per day messaging these businesses. Since 2018, the business API has charged a small fee to allow companies to send their users’ information, such as delivery confirmations or boarding passes and communicate directly using real-time support and an inquiry form. This has come with a few conditions in the favour of the companies, for example, if the user is the first to communicate then there will be no fee and also if organizations respond to the customer’s message within 24 hours of the initial inquiry it will be free as well.
Now the company has decided to introduce a new pricing model that will apply to business customers for some of their services. Despite not declaring the new charges at this stage, the company has stated that they will be helpful in expanding the business and continuing to introduce new features to the free messaging platform.
In addition to offer charges on WhatsApp business, the parent company also looks to expand WhatsApp’s in-app shopping opportunities as well as offer new tools that help in communication. During this time of the pandemic, social distancing and lack of much traveling have seen online shopping grow in popularity as many shifts to it for their daily transactions where possible.
In a move to increase its profits, WhatsApp has included a shopping button feature for WhatsApp businesses. The button will allow one access to a business’ catalog directly from their chat screen, making it easy to explore a business’ products and services while using the app. Businesses will sell their products via the recently launched Facebook Shops that offer a unified shopping experience.
According to Facebook, the new feature will expand ways for people to check out available products and make purchases right from a chat. It is also going to make it easier for businesses to integrate these features into their existing commerce and customer solutions. This is in turn is expected to help a majority of SMEs who have been most impacted in this time of the pandemic.
WhatsApp also looks to offer a new alternative that will see businesses use Facebook’s hosting services to handle their messages. This will result in faster responses regardless of where one is and allow for timely record of one’s inventory, ensuring they are up to date, as the information is stored on Facebook servers. As a result, WhatsApp will include new notifications on consumer-to-business exchanges conducted through Facebook hosting. Basically, this will provide transparency when in communication and flexibility when it comes to management.
However, despite being hosted by the Facebook servers, the company states that for privacy, the chats with a business using the new hosting service will disclose that those conversations are stored elsewhere and not protected by the app’s end-to-end encryption. The hosting service is expected to start off free of charge in order to draw in new customers to its enterprise tools. This tool is to be included come 2021 while the in-app shopping button is already live.
These new features will help a majority of organizations especially small businesses to tackle the challenges brought by the pandemic. In addition, the features will also see Facebook finally monetize WhatsApp as it had initially planned. However, far from this, the expansion of WhatsApp acts as an example of how tech startups can come out on top in the expanding tech industry.