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How did WhatsApp survive the competition?

On my last post regarding WhatsApp, I got great feedback! 9 people suggested writing more about WhatsApp. So, here I am.

This week, I’m writing about how WhatsApp grew so fast despite severe competition.


Online communication

Online messaging is not a new concept. Mature chat systems have existed since the late 90s. Systems like Yahoo Chat have been mature enough to scale to the internet. Apps like Skype revolutionized audio and video communication with the emergence of technologies like Voice over IP.

But around 2005, something else was happening that meant the communication market was available for disruption once again. Can you guess what?

Mobile phones.

With cellular connectivity becoming cheaper and companies like Nokia and Samsung starting to rule the mobile phone market, mobile phones started appearing in everyone’s palms slowly. In India’s case too, an explosion of cellular connections happened in the first decade of this century. Though the costs of communicating were decreasing, they were still very high as compared to today.

Then, another revolution happened, which created an immense opportunity.

With the iPhone getting released in 2008, a new era in computing was born. Thousands of apps and companies leveraged the new technology available with Android and iPhone.

The founders of WhatsApp wanted to jump in on the opportunity. As a result, WhatsApp was born in 2009.

But why did it grow so fast? Why not others?

The technology that powers WhatsApp is not non-replicable. Many of the global messaging apps, like Line, WeChat, Hike, etc. were using similar technology for providing communication capabilities.

To understand where other companies couldn’t sustain, especially in India, I would like to take the case of WeChat. This is not an attack on WeChat, but an honest examination of where they failed. Also, I am not saying WhatsApp is the only messaging app in India. Others, like Hike, were also growing.

WeChat

WeChat is China’s ‘super’ app. It started as a chat application similar to WhatsApp but has integrated payments and social commerce in its app.

WeChat launched in India in 2012 and launched a marketing blitzkrieg soon after. Their strategy, for the entire time, was to focus on localizing their existing app while pumping in a lot of money on marketing. But the consumer preferences in India were very different. This Factordaily article is a fantastic article about the rise and fall of WeChat.

Reading the article, you could see how they fell down. But what was it that made WhatsApp so successful, given that it was not an Indian app as well?

A few major things.

First, the ability to work with slower connections. For a 2G only market, WhatsApp offered the perfect way to send and receive messages.

Second, from the ground up, WhatsApp was built to work with emerging markets. This meant working on slower phones, requiring less memory on phones and consuming less battery. At the same time, it compressed photos and videos to enable sharing on slower networks. These features got people hooked on WhatsApp.

Then, it was the network effects that helped WhatsApp grow. If your friend was on WhatsApp, you had to be on WhatsApp. This was enough for an app that did the job without offering many features at the start.

As the market matured to 3G and now 4G connectivity, WhatsApp matured as well. Today, if you share a video on WhatsApp, chances are high that the videos might be shared in their original format. Add audio calling, video calling, and several other features that are hidden within the plain-looking WhatsApp app.

The result is more than 400 million users in India using the app every month.

WhatsApp user numbers, April 2013-December 2017

Global growth of WhatsApp. Source: Statista

Conclusion

So, the lesson that we can learn from this story is that merely copying apps is not going to lead to long-term sustenance of a product. Venture capitalists have learned this lesson, and foreign companies are being more careful about just translating their existing apps.

What do you think are some good international products that have adapted well to India?


Next week, I’ll write about the fake news menace associated with WhatsApp. If you want to know more about any new products, please comment and let me know! I’d be happy to research and write about them.

Please share this article with your friends & coworkers! It’d be great to see a discussion going around WhatsApp.

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