1 week ago
9
November 5, 2024 | 01:26 pm
TEMPO.CO, Jakarta - As one of the largest messaging applications in the world, WhatsApp has more than 2 billion users in 180 countries. The app is known for being ad-free and offering free subscriptions. So, how does WhatsApp generate revenue without relying on ads?
Why WhatsApp is Free?
Initially, WhatsApp was designed as a paid app, where users paid $1 per year after the trial period. This subscription model helped WhatsApp generate around $700 million in revenue per year before being acquired by Meta in 2014 for $19 billion.
After the acquisition, Meta decided to stop the subscription fee in 2016 to expand its user base and make WhatsApp completely free for users worldwide.
This strategy allowed WhatsApp to reach more users quickly, increase user engagement, and build their trust. In return, Meta focused on monetizing WhatsApp through special features for businesses that could help large companies manage customer communication and interactions on this platform.
WhatsApp Revenue Size
Although WhatsApp does not publicly disclose its financial reports, some estimates suggest that the app generated revenue of $27 billion in the first quarter of 2022.
This revenue is mainly generated through the WhatsApp Business API service aimed at medium to large businesses. This service allows businesses to send messages and interact with customers via WhatsApp, and charges are based on the number of messages sent within a specific period.
WhatsApp also expands its revenue potential through WhatsApp Pay, a payment service within the app that is available in India and Brazil. Although the revenue generated from this feature is not detailed, WhatsApp Pay has great potential to continue growing as the number of users in both countries increases and the potential for expansion to other countries.
Funding Sources
WhatsApp has several businesses that are sources of income. Here are three of them:
1. WhatsApp Business API
This is WhatsApp's main source of revenue designed specifically for large businesses. Through this API, WhatsApp charges companies that want to communicate with customers on a large scale.
This service includes features such as automated messages, CRM integration, and customer segmentation that facilitate business interaction management. Fees are based on the volume and type of messages, so businesses are only charged for interactions considered relevant.
2. Click-to-WhatsApp Ads
Meta integrates WhatsApp into their advertising ecosystem on Facebook and Instagram with "Click-to-WhatsApp Ads" feature. These ads allow users to start conversations with businesses directly on WhatsApp by clicking on ads displayed on other Meta platforms.
Although these ads are placed outside WhatsApp, the interactions generated support Meta's overall revenue by promoting WhatsApp as a business communication channel.
3. WhatsApp Pay
WhatsApp Pay is a payment feature within the app that allows users to send and receive money. While WhatsApp does not charge additional fees to users, the app earns commissions from each transaction made through banks or local payment service providers.
In the future, Meta is considering displaying ads in the WhatsApp Status section, similar to ads in Instagram Stories. These ads are expected to leverage WhatsApp's large user base to provide added value for advertisers.
Additionally, Meta is also exploring possibilities to enhance features on WhatsApp Business API to make it more attractive to businesses, for example by providing deeper analytics and more advanced automation tools.
BBC | BUSINESS MODEL ANALYST | ECONOMIC TIMES | HEAVYWEIGHT DIGITAL
Editor's Choice: WhatsApp Collaborates with Tanla to Detect, Prevent Scams
Click here to get the latest news updates from Tempo on Google News
Bukalapak Plans to Lay Off Workers Next Year
4 hari lalu
Bukalapak has re-evaluated the prospects of several business segments and decided to restructure to achieve the company's strategic goals.
10 Steps on How to Start an Online Store, Beginner's Guide
6 hari lalu
Planning to launch your own online store? Here's a list and explanation about how to start an online store for your dream. Learn more here.
10 Small Business Ideas: Start Small and Think Big
7 hari lalu
Dream and want to realize your own business? Here are 10 small business ideas that you can do with small investment and huge potential growth.
How to Start Dropshipping Business for Beginners with $100
8 hari lalu
How to start a dropshipping business with $100 or even less? Here are the small tips and what you should do about them.
7 Key Metrics to Measure Business Success
11 hari lalu
In this article, we will learn how to measure business success using seven key metrics, from break-even points to employee satisfaction.
How to Write a Business Plan: A Step-by-Step Guide
14 hari lalu
Learn how to write a business plan with our step-by-step guide. From the executive summary to financial projections, get started today!
SWOT Analysis for Small Business: Definition and Example
14 hari lalu
Learn how to conduct a SWOT analysis for small businesses with clear definitions and examples to identify strengths, weaknesses, and opportunities.
How to Market a Small Business: A Friendly Guide for Beginners
22 hari lalu
Do you occasionally find it difficult to expand your small business? What you should know about small business marketing is provided here.
Indonesia, Europe Expand Trade Relations Through IEBF 2024
28 hari lalu
As many as 122 European corporations and 123 Indonesian companies participated in the IEBF 2024.
How to Use Social Media for Small Business
37 hari lalu
Social media platforms can be powerful tools to grow your business. This article will give you insight into how to use social media for small business
