Facebook’s (FB - Free Report) WhatsApp internet messaging service recently launched WhatsApp Business, which will help small businesses connect easily with customers. The free-to-download application is currently available in Indonesia, Italy, Mexico, the United Kingdom and the United States.
Per Reuters, the service will rollout into other countries in the upcoming weeks. Facebook is also expected to launch an iOS version of the application in the near future.
Customers can use the WhatsApp Business application to gather details about businesses including store addresses and website. Messaging tools like quick replies, greeting messages and away messages are expected to smoothen business-customer relationship.
Monetization of WhatsApp: Key Focus
WhatsApp Business is likely to be the first step to monetize WhatsApp internet messaging service, which was acquired by Facebook in 2014 for almost $19 billion.
The messaging service used to charge $1, which was dropped in 2016. Since Whatsapp doesn’t show advertisements it currently makes no money.
However, the lack of advertisement has been the key growth driver for the expansion of WhatsApp’s user base. The service currently has approximately 1.3 billion monthly users, significantly up from 450 million monthly users at the time of its acquisition by Facebook.
WhatsApp now boasts 1 billion daily active users.
India Missing From the First Slot
It’s mind boggling to note that India — WhatsApp’s biggest market — is missing from the first slot of countries where the business application was launched. Reportedly, WhatsApp had more than 200 million monthly active users in India as of February 2017.
We note that Facebook has been contemplating to venture into the Indian digital payments market through WhatsApp.
Per reports from FactorDaily, quoted by thenextweb.com, the company’s employees in the country are presently testing a peer-to-peer payment functionality in the application. However, the company is reportedly not testing any tools that enable merchant transactions.
We expect WhatsApp’s payment service to face significant competition from Alibaba (BABA - Free Report) backed Paytm, Google’s Tez and India government’s BHIM application along with smaller players like Tencent-backed Hike Messenger, Reliance’s Jio Money and Ola Money.
Notably, Paytm has 280 million registered users on its platform. The company’s partnerships with the likes of Uber make the service a dominant name in the Indian digital payment market.
Zacks Rank & Other Key Picks
Facebook has a Zacks Rank #2 (Buy). The Trade Desk Inc. (TTD - Free Report) and Echostar Corporation (SATS - Free Report) are two other stocks worth considering in the broader technology sector, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for The Trade Desk and Echostar is currently pegged at 25% and 18.5%, respectively.
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