The jury is still out on whether Facebooks $19 billion acquisition of the mobile messaging company WhatsApp would have a visible impact on the 900 million plus phone users in India, though for now it looks very unlikely given the inherent challenges of bandwidth, lower smartphone numbers and online payment structure.
Though these are early days on how this entire acquisition is going to roll out as both the companies will have to clearly articulate their strategy going forward on how they are going to tap the market. Facebook has an estimated 100 million users in India, while on the other hand, WhatsApp has an estimated 30 million users.
This combination could look very enticing for a country like India which is the second largest mobile market globally after China. According to Vishal Tripathi, principal research analyst, Gartner, It is very unlikely that there will be any visible immediate impact in the India market through this acquisition. The Gartner analyst listed out the reasons of low smartphone user base, bandwidth challenges and price sensitiveness of the India market for the lack of any major impact as of now.
Facebook and WhatsApp services would ideally work well in a smartphone as against a conventional feature handset. The user base of smartphones is estimated to be around 37 million in India, which is a low number to create any major impact, considering that there are over 450 million smart phone users globally.
The big plus point of WhatsApp has been the simplicity of its service without any pop up ads while allowing easier and faster texting functionality on the mobile. As Vidya S Nath, director, digital mediaglobal innovation centre, Frost & Sullivan said, With a simple, uncluttered, location agnostic application for a multimedia platform, its popularity has soared leaps and bounds and according to industry experts it is likely get to a billion subscribers before end of the year globally. It will be interesting to see how the two applications will be able to combine synergies in the future, because contextually they are different.
Even the mode of payment or service charges for WhatsApp could create certain challenges in a highly price sensitive market. The consumer would be more attuned to a free service and certain small amount of annual fee, but anything beyond this could witness a shift. There is also a distrust within the Indian consumers to make payments through the online route and this would be more pronounced in the semi-urban and rural areas, say analysts.
A venture capitalist based in Bangalore said, The market for Facebook is not growing in its home country (US) and it is markets like India which would actually provide a boost to them, where they are growing.
The bets are, however, on the mobile user base in the country, which is witnessing a slow shift from the pure voice based services and towards data applications like video, music, movies etc. This could also bring into picture the cellular services provider as some of them like Bharti Airtel or Reliance Communication who have either started their own messaging service or promoting other platforms.
Besides WhatsApp, there are other messaging services like WeChat or Line which are available to Indian users. For now WhatsApp has a dominant share in the market given its technology agnostic platform and superior services. The moot point would be how this marriage would work together in the future and whether Facebook would be able to connect the unconnected in a vast market like India.