With Jio’s support, WhatsApp a step closer to becoming a ‘super app’

The $5.7 billion Reliance Jio-Facebook deal has set WhatsApp, the tech giant’s instant messaging service, on track to replicate China’s Tencent-owned WeChat model in India that will allow users to shop, make payments and socialise on one platform, say experts.

Going beyond messaging, WhatsApp will also have small businesses selling products on the platform and payments will complete the full circle, industry insiders say. Along with Jio, WhatsApp can morph into an overall commerce experience for consumers.

“In two years' time, WhatsApp might look more like WeChat with a lot of mini-apps and commerce being the centre stage, payments and messaging will be the enablers,” said a founder of a fintech startup, who tracks this space. India is WhatsApp’s biggest market with around 400 million users.

WeChat is an all-in-one app that the Chinese use to chat, pay, shop online and book tickets. It is said to have more than a billion monthly active users.

Read more:  Facebook buys 9.9% stake in Reliance Jio for Rs 43,574 crore in largest tech FDI

That is what tech giant Facebook has been planning through WhatsApp--monetise the product by bringing in commerce into the instant messaging platform. Facebook is working on payments through WhatsApp Pay, which is at a testing stage. Joining hands with Reliance could help it go live with WhatsApp Pay sooner, say experts.

To date, WhatsApp has not been able to become a revenue spinner for the parent. The deal with Reliance Jio could change that.

“Facebook has seen its adoption slowing in developed economies and hence, they need to bet on India for the next billion users and revenue-generation avenues. The kind of usage WhatsApp has in India, combined with the Jio customer base, will be their platform of choice for this,” said Bhavik Hathi, managing director of consultancy firm Alvarez and Marsal. Jio has around 370 million subscribers.

Paytm had also introduced messaging as a part of its merchant-transaction strategy.

“Paytm Inbox is a new offering on our app with a fast and simple messaging service that will let you chat with your friends and family, and send/request money at the same time. You can even chat with your friendly neighbourhood shopkeeper and order stuff easily and send them money instantly on delivery,” said the Softbank and Alibaba-backed company on its blog way in 2017.

JioMart intends to do a similar thing, offer a complete shopping experience to the customer. Get customers online and then bring them to stores to shop (online-to-offline, or O2O, in industry parlance).

A few have attempted such a solution, but no one has succeeded in turning it into a complete experience for consumers.

Indians like to socialise and buying essentials is as an excuse to step out of home. But the coronavirus outbreak and the lockdown have changed that and it could be the new normal.

“The partnership assumes special significance for India in the wake of the severe disruptions caused by the coronavirus pandemic in the Indian — and the global — economy. In the post-COVID era, comprehensive digitalisation will be an absolute necessity for the revitalisation of the Indian economy,” said Reliance in its note shared with the press.

COVID-19 is the respiratory illness caused by the coronavirus.

WhatsApp is gearing up for a post-COVID world and the Reliance partnership will give it a fillip.

But a business has to make money. On paper, the idea looks like the next big attempt at digitisation in the country which has so far been sketchy.

Ecommerce continues to be primarily an urban affair and the state-backed Unified Payment Interface is struggling to go beyond 100 million users who are paying and transacting online.

“We have already seen other similar models come but have a very limited impact, baring a couple of companies which also have not turned profitable. This partnership has a massive head start since both the entities have a huge user base, this is India’s best shot at wide-scale digitisation. If this does not work profitably, then the Digital India story will face major challenges,” said Hathi.
Catch entire coverage on the Facebook-Jio deal here.

Disclaimers: Reliance Industries Ltd., which also owns Jio, is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.