Lead Story

WhatsApp: The Business Logic Of Instant Messaging API

Braving backlash over data privacy and failing to monetise its model globally, WhatsApp is trying to emerge a winner in India through an API approach, which is a first for the world

When Jan Koum and Brian Acton launched WhatsApp in 2009, little would they have known that their invention would become one of the most popular ways of communication across the globe.

In India—one of the company’s biggest markets—the app is used by over 400 million users, both for personal as well as business messaging. Despite the privacy backlash that it has faced over the years, its user base has not taken a major hit. At a time when several users had started moving to its rivals due to the fear of data harvesting by the company, its improved privacy policy convinced people to stick by it—its user-friendliness and reach were other big reasons that prevented further migration of users.

Over the last couple of years, WhatsApp’s thrust on business messaging has found a further push. With most customers preferring a WhatsApp message for product or delivery updates, businesses are adding it as an additional platform to connect with customers. Supporting this strategy is a finding of a Meta-commissioned online survey carried out by data, insights and consulting company Kantar earlier this year, according to which over 70% of Indian adults who are online prefer messaging over email or calls.

Monetisation Success

WhatsApp’s business app has presented it with a good monetising opportunity, which till now it had struggled with. The company’s UPI feature—WhatsApp Pay—failed to create much buzz. The WhatsApp Business app, which is a manual and free-to-use application for small businesses, is being used by 15 million small businesses across the country. On the other hand, the WhatsApp Business platform—its enterprise API solution which is a paid service for businesses—is being used by governments and organisations across the country to scale up digital and financial inclusion apart from reaching out to customers.

The India Experiment

These use cases—which are a global first—make India a great experiment ground. The API model offers a new business model for companies and something that Meta is looking to build a business of.

“Business messaging is a game-changing opportunity for Indian businesses of all sizes to engage with WhatsApp’s millions of users across segments and literacy levels and nurture them through rich conversations throughout their purchase life cycles. Messaging on WhatsApp is not only helping to unlock a hugely transformative potential for businesses, but also, with WhatsApp’s easy solutions, simple technology is redefining consumer convenience in new ways,” says Ravi Garg, director, business messaging, WhatsApp India.

Apart from businesses, the API platform is also used by at least 40 entities across the Central and the state governments to enable citizen engagement for public health, social welfare and grievance redressal use cases among others.

Prioritising Security

WhatsApp asks businesses to get opt-in from customers before initiating a conversation with them. It gives users visible controls to provide feedback on any business and use that signal to limit a business’s ability to message. This helps WhatsApp understand what conversations people are finding valuable and provides a way for it to give feedback to the businesses on their chats or take action—including banning the account—if needed.

The platform allows a business to send only a certain number of messages per day to users until the business can demonstrate that customers find value in what it is sending—the number is limited to 250 at onboarding. Businesses can only initiate messages using pre-approved templates, which, WhatsApp claims, help it ensure that they are sending messages which adhere to its guidelines. Additionally, there are built systems that make it faster for WhatsApp to suspend a business from sending messages when people provide negative feedback. If a business receives negative feedback, its WhatsApp access may be removed or limited.

WhatsApp claims to constantly monitor sentiment and customer feedback so that more granular controls can be given to users. It is working on options to be given to users to opt out of specific types of messages which they receive from a business, such as coupons or promotions.

Going forward, the Meta-owned platform wants to invest in awareness and education for “new-to-digital” users. While it already has a sizeable chunk of the digitally savvy urban users in its kitty, it also has its eyes set on creating awareness and increasing adoption of the app by the rural users.