Nov 6, 2020

How does WhatsApp makes money ? | How WhatsApp earn money ? -

How WhatsApp earn money - Business model

WhatsApp developed in 2009 by Jan Koum and Brian Acton. Jan Koum is a Ukrainian American and present CEO of WhatsApp. This app was developed as an alternative to SMS services which can be operated via the internet alsoWhatsaap is available on various platforms such as Android, iPhones, Mac, and Windows.

WhatsApp
WhatsApp Case Study- Source Freepik.com


Jan Koum and Brian Acton were former employees of Yahoo. The idea of WhatsApp was a status update application later it becomes the messaging application.

Amazing facts about WhatsApp

  • More than 1 Billion active users.
  • Supports 40 languages.
  • User-friendly interface.
  • According to WhatsApp statistics about 65 Billion messages sent on the application.
  • 4.5 Billion photos and Videos send per day.
  • WhatsApp does not allow users to upload more than 15 seconds of video on status.
  • WhatsApp is an essential application for its users that they don't have to spend money on marketing of this application.
  • WhatsApp reveals its users open it 23 times in a day.
  • More than 29 Million messages send on WhatsApp every day.
  • More than 1 Billion Active groups on WhatsApp.

Timeline of WhatsApp

  • 2009 WhatsApp launched.
  • 2010 WhatsApp launched for Android.
  • 2013 Voice Messaging feature added.
  • 2014 Facebook purchased WhatsApp in February 2014.
  • 2016 WhatsApp becomes a free app without a subscription Fee.
  • 2016 WhatsApp desktop launches via WhatsApp Web.
  • 2016 WhatsApp end to end encryption.
  • 2018 WhatsApp Business API launched.

 How WhatsApp earn money

Facebook bought WhatsApp for 19 billion in 2014 and there is a reason why they spent that huge amount on WhatsApp. The intention of the developers is to make an application without ads and to provide a better user experience.

WhatsApp user Experience
WhatsApp clean User Experience Source-Freepik.com


Now, let's understand how this messaging app earns money, and are they in profit or loss? How does whatsapp earn moeny?

Annual Subscription 

In some countries, WhatsApp charged 1$ per year as an annual subscription, the first year of use is free, and later you have to pay the 1$ chargers for an annual subscription. but if you did not pay the annual fees even then you can use the application, service gets renewed automatically that is the reason revenue generating from this model is not optimal.

The majority of users of WhatsApp are in India and Facebook doesn't charge a single penny for a subscription. that's the problem with this strategy.

Facebook completely removed the subscriptions from all over the world from WhatsApp and they are not generating any revenue from this model. 

Whatsaap for Business API

In August 2018 WhatsApp Business API was launched for better customer communication BMW and Uber among the first companies to answer customers' inquiries and offer support on WhatsApp.
WhatsApp for Business
WhatsApp for Business Source-Freepik

You can create a WhatsApp business profile and become a verified business on WhatsApp, users can put the links of their website, Facebook page, autoresponder, landline number, and even products list on the WhatsApp business which help to engage with more customers.

WhatsApp Business has certain features.
  • Businesses can only send messages to people who have contacted them first.
  • Shipping details will be sent automatically.
  • Notification Appointment remainders.
  • Event tickets to their customers.
 "How they earn via WhatsApp Business API?"

Charge for late replies

Businesses must reply to their customers in 24 hours of their queries raised. if the business is unable to respond in 24 hours then they charged for every message sent after 24 hours and they earn money in that manner.

Businesses such as Airlines, Travel Tickets, and Movie tickets have to reply to the customer's queries as soon as possible because of the constraint of time. 

WhatsApp Payment

Integrating WhatsApp business with payment helps the business to boost its position and make it a preferred app for transactions. WhatsApp can partner with sponsored companies for cashback and various offers and that way they can earn money with WhatsApp payment.

In that way, WhatsApp is able to generate revenue from the WhatsApp Business API.

WhatsApp data for Facebook

In August 2016 WhatsApp comes with its new privacy policy update informing users that their data can be shared with parent company Facebook. we all know that data is the new oil and all the companies are looking for the insights of data to grow their business.

Whatsaap explained the reason for updating privacy policy in their blog post as, 

“By coordinating more with Facebook, we’ll be able to do things like track basic metrics about how often people use our services and better fight spam on WhatsApp. And by connecting your phone number with Facebook’s systems, Facebook can offer better friend suggestions and show you more relevant ads if you have an account with them. For example, you might see an ad from a company you already work with, rather than one from someone you’ve never heard of."


Whatsaap will use the data for finding better friend suggestions on Facebook and display the ads to specific users so that the conversion rate on this advertisement will improve.

Data from WhatsApp
Data is Money


Let us now understand this by example, if you have been sending the pics of sports shoes to your friend on WhatsApp then there might be high chances that you will see the sports shoe ads on your Facebook timeline.

Whatsaap has a huge user base and the data generating from these users is very high and this data can be used to understand the customer preference and providing these users betters products and services ads to increase the conversion rate of the customers.

"These are the 3 main strategies by which WhatsApp is earning the money thank you for reading this article and if you have anything to say then the comment section is yours.

2 comments:

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