How would you monetize WhatsApp?
monetization
WhatsApp is a messaging app that enables people to talk to each other via text messages, audio/video calls or voice notes. WhatsApp has also recently allowed businesses on its platform and has launched WhatsApp pay for all its users. Today, WhatsApp gets its revenue by charging businesses to use its APIs and by taking a cut from the payment transactions that happen on it.
In this article, we’ll look at potential revenue streams. Before getting into this, one principle I would like to follow is that the monetization ideas we consider should not affect the current engagement and DAU of WhatsApp. For example, making WhatsApp paid for users is not a feasible idea as the DAU will drop and users will move onto other messaging apps.
Let’s start by understanding the different users and use cases of WhatsApp
Users
Personal
Businesses
Today, people can message other people (or a group of people) on WhatsApp and businesses can message people. Some examples
Personal chat - Users want to quickly communicate something to someone who they interact with regularly - flatmate, coworker, neighbor, etc. or want to stay in touch with friends, family, batchmates, etc.
Office/work chat - Some organizations don’t really care for formal collaboration tools like Slack or Teams and prefer to use email for formal async communication and WhatsApp for quick, work related, continuous conversations.
Activity groups - Users belong to group chats that are created based on an activity all the members do or a common characteristic they all share. Examples - yoga, the building you live in, class groups, etc.
Here are some pain points that users face regularly which could lead to potential monetization opportunities:
Apps - With apps, users can do a lot of cross app activities right from within WhatsApp really quickly. Examples - share a drive link from within WhatsApp itself, read news on WhatsApp, see what’s on the calendar for today, etc. WhatsApp can charge developers to be a part of the marketplace and use WhatsApp APIs to build these apps. Developers can decide if their apps are free apps or paid apps and can make revenue from users (of which WhatsApp gets a cut).
Businesses Nearby - Every user will most likely have to depend on shops in their neighborhood for groceries, medicines, food, etc. These interactions are driven by an urgent need such as “Oops I’m running out of milk” or “ I have no vegetables to make any meals today” or “I have a really bad headache and need some medicines asap!”.
For some users, they may be very familiar with these shops and will have all the numbers stored on their phones. But for someone who has moved into a neighborhood recently, they may not know which shop to go to for their needs.
Now let’s look at this from the shops PoV. These shops get a lot of business from their regulars and are happy to deliver within a certain radius. But to do this, they have to attend a lot of calls and may lose business when they have to attend to customers physically present at the shop.
To solve these pain points, WhatsApp can introduce a section called “Businesses Nearby” which can list all the shops within a certain radius. WhatsApp can charge businesses when users discover the business/place an order with the business.
This feature helps more and more users discover local businesses leading to more revenue for those businesses. This feature also facilitates quicker order cycles with lesser involvement on the business side as compared to a phone call - right from the user getting in touch with the business to paying for the order.
Note - this feature will not cover the logistics of delivering the order as this is not WhatsApp's area of expertise. It only involves order placement and payment (either through WhatsApp Pay, UPI or other methods).
For office chats - For organizations that use WhatApp as an official communication tool, WhatsApp can charge these organizations and provide more workplace related collaboration abilities, Let’s call this the “Workplace plan”. Some examples of what could be included in this plan:
WhatsApp currently only allows 8 participants on a call. WhatsApp can extend this limit for offices who have paid for the workplace plan.
Record calls for future reference
Allow users to present and share screen
Provide more admin controls
Games - After a certain point, staying in touch with different groups of friends, acquaintances and family, becomes a little monotonous if it’s just regular conversation. Most groups get on to Google Meets/Houseparty and play games like Pictionary, Psych, Taboo, truth or dare etc. to get the group chemistry going. WhatsApp could develop some games that groups can play together without the need of initiating the conversation on WhatsApp and moving across several apps and devices just to play a couple of games. WhatsApp can charge a small fee to users to avail this functionality.
To prioritize the ideas listed above, let’s look at the impact and effort for each idea
Most of the ideas above have high effort but the revenue impact for Apps is the highest. Therefore, WhatsApp should start off by building Apps to make additional revenue.