India has embraced WhatsApp, but Meta now needs to make it pay

“Hello Mumbai,” boomed Meta boss Mark Zuckerberg to a mega conference last month on WhatsApp’s business offerings. “I am particularly excited to be hosting this year’s event in India,” he continued, his face aglow via a giant video link. “You’re leading the world in terms of how people and businesses have embraced messaging as the better way to get things done”.

Zuckerberg may have addressed the 1,000-strong audience from Menlo Park, but India is special to his digital business empire. WhatsApp, the messaging service he acquired in 2014 in a $16bn deal, is betting that the world’s most populous country represents one of its best chances to finally make some money.

WhatsApp has had no easy ride in India, having faced criticism for being a platform for viral misinformation. But when it comes to business messaging, the platform has found “an energy that is unprecedented”, said Sandhya Devanathan, Meta’s India head, during her address.

This is not just Silicon Valley hype. WhatsApp a photo of a prescription to your local pharmacist, and medications arrive at your door. Grocery sellers take orders on the platform, a system that germinated during India’s severe lockdowns and now helps them compete with the spread of delivery apps. Our neighbourhood liquor store even sends broadcast messages to clients warning that a religious holiday is coming, encouraging us to stock up on booze before temporary prohibitions on alcohol kick in. “Try explaining this to investors in the US,” a Meta employee at the conference commented to me, slightly ruefully.

India has also been a Petri dish for experimenting with business messaging. In 2020, Meta made a $5.7bn strategic investment in tycoon Mukesh Ambani’s Reliance Industries’ digital unit. The oil-to-data conglomerate has big retail ambitions, and last year its JioMart ecommerce brand launched a WhatsApp grocery shopping service, the first of its kind for the platform.

While neither company has disclosed how many people are using JioMart’s service, WhatsApp announced in Mumbai that it was making similar features available for other companies. Zuckerberg’s other big reveal was a new function allowing Indian customers to make payments inside WhatsApp without having to open a new app or internet page — a service that has already been rolled out in Brazil and Singapore.

With this new arsenal of features, Meta wants to convert India’s familiarity with WhatsApp into revenue. This is not easy: the way my local shops use the platform means they don’t pay for it, and the business version of the app is free. WhatsApp charges its fully-fledged business clients for the messages they send to customers, usually on a much larger scale — for example, a metro ticket booking service in Bengaluru. Although each message is a fraction of a rupee, it adds up. So Meta will need to convince businesses that it can spur sales with smart marketing, incorporating Facebook and Instagram, while saving them money by letting chatbots take over some customer service.

Shrey Khandwala, one of those customers at the conference, was impressed. The purple-lit hall buzzed with the sound of drones and an electro tabla player, as the 25-year-old wandered among stalls of companies that have popped up to piggyback on WhatsApp. He wanted a partner to help him refine the services offered by his online jewellery and accessories company, Mesmerize, which uses WhatsApp for marketing campaigns and customer support.

While WhatsApp is important for Khandwala’s business, “I would definitely say that it is expensive,” he says. “It’s not like it’s a cheap channel and we can’t just keep bombarding them with messages to no end and not really worry about the cost we are incurring.” He estimates that a marketing campaign to 100,000 people would cost a minimum of Rs72,000 — around $859. An online delivery executive at the conference pointed out that he can use his own app to market directly into customers’ phones, bypassing that expense.

But Khandwala is sticking with WhatsApp in spite of the cost. “A big part of what we are today and where we’ve been able to reach is because of Meta,” he says.

chloe.cornish@ft.com