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Summary

After years of anticipation, WhatsApp has finally adapted its communication services for businesses. The player has begun verifying selected businesses, allowing them to engage with opted-in customers through its chat app. WhatsApp Business is still in the pilot stage, but it will have a far-reaching impact on how businesses interact with their customers.

WhatsApp enables enterprises to connect with customers via WhatsApp Business

WhatsApp has more than 1.3 billion monthly active users (including 1 billion daily active users), making it the world's leading communications app. Its size alone is a powerful reason for businesses to want to use the platform to disseminate information or interact with their customer base. Adding to this, businesses can quickly and easily integrate WhatsApp into their current customer outreach solution, given the simple, no-frills nature of the app. WhatsApp's large user base, global reach, low data usage, and strong focus on communications make it an ideal platform for business communications. WhatsApp Business will no doubt be quickly adopted by businesses small and large, fundamentally transforming business communications.

WhatsApp Business will provide the tools that businesses need to engage with customers and track customer communications. WhatsApp is also working toward verifying businesses to ensure that only legitimate businesses have access to the solution. WhatsApp has a two-pronged strategy with WhatsApp Business: one targeted at SMEs and one at large enterprise clients. Ovum expects that WhatsApp's enterprise strategy will also enable companies to collaborate and communicate within their organizations as well as offer a separate customer outreach solution.

The launch of business tools is a natural progression for the chat app, as WhatsApp has been used informally by SMEs to update, market to, and interact with their customers. There is no doubt that WhatsApp will become the platform of choice for businesses. However, to ensure that it remains the platform of choice for businesses in the long run, it must enable SMS fallback services, analytics, and payment services. By enabling these functionalities, it will open robust revenue channels and become a platform for digital goods and services as well as customer engagement. The concept of messaging as-a-platform is a natural evolution in the chat app space: Facebook Messenger, Line, and WeChat have all evolved beyond basic communications services to offer a platform for consumers to use (and buy) services. If WhatsApp were to launch payments in India, for example, it would enhance its proposition for businesses.

The entry of WhatsApp into the enterprise messaging space has long been anticipated, but WhatsApp remains in its infancy when compared to apps such as WeChat and Facebook Messenger. Not only do these players have a well-defined solution for brands and businesses, they have also launched payment capabilities and are making significant moves to enhance the user experience when consumers interact with businesses on the platform (e.g. by incorporating chatbots).

Although WhatsApp is taking slow and steady steps to making its service suitable for business use, its entry into enterprise communications is extremely significant. WhatsApp will shake up the market, ensuring that more customer interactions are carried out via chat apps as opposed to more traditional channels such as SMS or email. KLM and BookMyShow in India have already begun using WhatsApp as a part of the pilot project and are actively replacing SMS with instant messages via WhatsApp for customers actively using the service. With more than 1.2 billion monthly active users and 1 billion daily active users, WhatsApp can cover a vast number of KLM and BookMyShow users.

Appendix

Further reading

2018 Trends to Watch: Communications Services,TE0003-001064 (September 2017)

OTT Messaging Forecast: 2016–20, TE0003-000952 (September 2016)

Mobile Messaging Traffic and Revenue Forecast: 2016–21, TE0003-000976 (November 2016)

OTT Communications Tracker: 4Q16, TE0003-000986 (January 2017)

A Day in the Life of Mobile Communications, TE0003-000939 (September 2016)

Remaining Relevant in Communications: Partnering with WhatsApp, TE0003-000935 (August 2016)

"Messaging players evolve with AI-enabled bots," TE0003-000931 (June 2016)

Digital Economy 2025: The Future of Communications, TE0009-001524 (May 2016)

Author

Neha Dharia, Senior Analyst, Consumer Services

neha.dharia@ovum.com

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