With 2 billion users and counting, WhatsApp is the world’s largest messaging platform. People across 180 countries use the app to communicate with their friends, families and co-workers through swift and seamless messaging. And with the launch of the WhatsApp Business API in 2018, it has become a valuable customer engagement tool for brands – with over 5 million businesses using WhatsApp to engage and serve customers.
As WhatsApp continues to expand the range of services it offers businesses, it is increasingly being seen not just as an engagement tool, but a platform to enable conversational commerce as well. This has given rise to the concept of ‘WhatsApp Commerce’ – offering and selling products and services to customers using WhatsApp as the primary channel.
There are a number of factors which point towards WhatsApp being the future of commerce. In this article, we explore three reasons why brands need to prepare for this new paradigm shift.
1. Recent Developments around WhatsApp Commerce
In recent months, there have been a number of developments that clearly indicate WhatApp’s move towards becoming a commerce platform.
In April 2020, Facebook made a $5.7 billion investment in Reliance Jio. Following this deal, users of JioMart, Reliance Retail’s new e-commerce platform, were able to transact seamlessly over WhatsApp, ordering products and services from local stores and small vendors. This partnership between JioMart and WhatsApp is a strong signal of WhatsApp’s intention to play a major role in the Indian retail space.
Another significant development is the peer-to-peer payments feature, WhatsApp Pay, initially launched in India in February 2018, and beta-tested in collaboration with ICICI Bank. Following regulatory approvals, WhatsApp Pay is poised to make its mark in a big way in Indian markets in 2020, and is estimated to reach 10 million users within months of its launch.
Facebook CEO Mark Zuckerberg has already declared that WhatsApp Pay will be rolled out in several other countries over the course of the year, indicating that the impact of these developments will be felt in retail marketplaces across the globe.
2. COVID-19 and the demand for ‘Contactless’ Shopping
The COVID-19 pandemic, and the social distancing norms that have become necessary in its wake, has brought about massive changes in consumer behavior. One of these is the need for ‘contactless’ shopping options that would minimize or eliminate the need for physical interaction with store staff or other shoppers.
Needless to say, this situation has given a significant boost to conversational commerce. And with WhatsApp usage having grown by 40% during the months of the COVID-19 crisis, it has been the platform of choice for many house-bound consumers to place food and grocery orders and track deliveries.
Apart from facilitating home deliveries, one of the most popular WhatsApp Commerce use cases that has been observed is ‘Order & Pick-Up’, wherein consumers book slots to pick up daily essentials from stores – which serves the purpose of helping avoid crowding in stores.
While it has disrupted operations for many businesses across the globe, COVID-19 has also created opportunities, and this growth in conversational commerce and contactless shopping is clearly one of them. This trend, coupled with developments like JioMart and WhatsApp Pay which we discussed earlier, signal that WhatsApp is battle-ready to seize this opportunity and establish itself as one of the predominant commerce platforms.
3. The strength of WhatsApp as a platform
The sheer scale of WhatsApp as the world’s largest messaging app, coupled with a number of features that facilitate ease-of-use, make it a very attractive platform for brands to do business on.
WhatsApp has low friction for user adoption – with over 400 million customers spending over 4 hours a day on the app, and the average user checking the app 23 times a day. It is already the platform of choice for people to chat with friends and family, so using it to chat with a business to make enquiries or purchases is the logical next step. Indeed, the COVID-19 crisis has shown that customers will readily take to WhatsApp as a shopping tool when given the option.
WhatsApp has also increasingly started to introduce a number of elements to make the conversational experience simpler and more interactive. These include quick replies and buttons, which enable users to progress faster in their conversations with businesses. The WhatsApp Business App (which is meant for small businesses) includes a catalog feature which is also expected to be available to users of the WhatsApp Business API.
A key advantage of WhatsApp Commerce is that you can get it up and running fairly swiftly. Unlike a website or app, which requires a long development phase, it is possible for a brand to implement a WhatsApp solution, either with live agents or an AI-powered chatbot, in as little as 7 days!
Last, but not least, WhatsApp is a Direct-to-Consumer channel, which means that brands using the solution do not need to pay a commission to any intermediaries, which is the case with many other sales channels.
To sum up
Between WhatsApp’s expanding capabilities and scope, and the move towards conversational commerce and ‘contactless’ shopping, WhatsApp Commerce is certainly poised to be the next big thing for brands. In the months and years ahead, the way people shop will change dramatically, and it is crucial to businesses to stay on top of these developments and ensure that they are ready to engage on the platforms where their customers will be.