Can Meta transform WhatsApp into a super app?

The news: Meta CEO Mark Zuckerberg on Thursday mapped out a super app-like vision for WhatsApp that would enable consumers in Brazil to find, message, and buy something from a business all within the same chat.

• “The ultimate goal here is to make it so you can find, message, and buy from a business all in the same WhatsApp chat,” he said.
• The in-app end-to-end shopping would mirror the experience WhatsApp launched with JioMart in India this August, but in Brazil it is working with multiple payment partners.
• The timing of the plan is significant given that Meta is at a critical juncture. Its main revenue source, advertising, is declining; our newly updated forecast sees the company’s ad revenues dropping 3.7% in the US this year. Yet even though we expect its ad revenues to rise in 2023, the company’s two-year annualized growth will come to less than 1%.

Monetization is hard: The move to transform WhatsApp represents a major effort by Meta to monetize a significant resource that until now has generated relatively small revenues—though how the company plans to generate revenue from the feature remain hazy.

• Meta paid $22 billion for the platform in 2014, making it the company’s most expensive acquisition. Yet messaging across Facebook's apps pulled in a relatively paltry $218 million in the most recent quarter, driven by paid messaging on WhatsApp, per Insider. That’s not even a rounding error for a company that generated nearly $29 billion in total revenues.
• But as the company looks for growth opportunities, it can’t help but daydream about transforming WhatsApp into a WeChat-like super app. WeChat has 820.2 million users in China, per our forecast, and its mini-program economy was estimated last year to be valued at $240 billion, with 450 million users transacting through the program.
• Those eye-popping numbers help explain why Meta has made several strategic investments and updates to its platforms aimed at bolstering chat-based commerce revenues.

The big takeaway: Amid Meta’s current challenges with advertising, it is hardly surprising to see it reimagine WhatsApp as a super app that consumers turn to for everything from messaging to commerce.

• While conversational commerce has not gained traction in the United States and Europe, Meta is wise to see if it can gain a foothold in Brazil, India, and other markets.
• If those efforts prove successful, conversational commerce could provide a fresh revenue stream for Meta and, at the same, shield it from some of the detrimental impact that Apple’s privacy changes have had on its advertising business.

Go further: Read our Future of Meta report.

This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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