WhatsApp in Asia far from runaway success

Singapore

WHATSAPP may be hugely popular but its forays into Asia, the world's biggest mobile market, have had mixed success, raising questions about whether it can sustain the explosive growth that Facebook cited to justify its US$19 billion price tag. Data from app metric company App Annie, for example, shows that WhatsApp ranks as the top communications app in only three of 13 Asian countries tracked - Hong Kong, India and Singapore.

"WhatsApp has been a strong player in Asia, but in the past year has faced strong competition from Line and WeChat," said Neha Dharia, India-based analyst for Ovum, a technology consultancy. "WhatsApp has not been displaced by these players, but has seen stiff competition in growing its market share."

Facebook said on Wednesday that it would buy WhatsApp for US$19 billion in cash and stock, in a deal worth more than Facebook raised in its own IPO. For sure, WhatsApp has been phenomenally successful. For many users it has replaced sending costly texts, or SMS messages. Since its launch in 2009, it has built an active monthly user base of 450 million users.

A survey by marketing and research company Jana found WhatsApp to be the most used messaging app in all the countries it surveyed - India, Kenya, Nigeria, South Africa, Brazil and Mexico - beating competitors by a huge margin. The reason: users most prize the basic functions it offers - ad-free chat and photo sharing. WhatsApp subscribers sent 18 billion messages a day last month. The overall market is growing rapidly: According to Ovum, 27.4 trillion such messages were sent last year; and this year that figure will be close to 69 trillion.

By hooking up, Facebook and WhatsApp may be able to take on those markets that have been elusive to Facebook so far. With Facebook blocked in China, and lagging Twitter and Naver's Line in Japan, WhatsApp "is a potential avenue for Facebook" into those markets, said Vincent Stevens, a senior manager for telecoms consultancy Delta Partners.

Forrester, a consultancy, forecasts that China will have more than 500 million smartphones this year. And in the fast growing smartphone market of India, says Neil Shah, research director of devices and ecosystems at Counterpoint Research, local users now account for almost 9 per cent of total active WhatsApp users around the world - some 40 million of them.

But Facebook and WhatsApp face formidable foes. Where once messaging apps were simply about messaging, now Tencent's WeChat, Line and KakaoTalk offer a slew of additional services, from icons and games to buying goods and services. "Line and the others are very different from WhatsApp. They're much more innovative in the business models they engage in,"says Michael Vakulenko of VisionMobile, a UK-based consultancy. "They are innovating much faster than WhatsApp and going in a different direction."

This could prove decisive in Asia - the biggest battleground for social messaging apps - where no single player dominates. Data from market research company Nielsen, for example, showed BlackBerry Messenger as the most downloaded messaging app in Indonesia last October, the latest data available, while Viber, bought by Japanese online retailer Rakuten for US$900 million last week, was the most popular in the Philippines, and Line in Thailand. WhatsApp was third in Indonesia, second in Malaysia and not in the top 10 in the Philippines or Thailand. And while locals say that WhatsApp remains the default messaging app in Indonesia, some notice a shift.

Jerry Justianto, who runs a radio station network in Jakarta, says that he's noticing fewer of his friends using WhatsApp than before. "I think it's reached a plateau in Indonesia. I see a lot of WhatsApp accounts in my list are inactive."

A survey by market research firm On Device Research late last year found that while nearly two thirds of Indonesians surveyed had installed WhatsApp, less than half used it at least once a week, compared to three quarters of Brazilians who had installed it. Part of the problem, Mr Justianto says, is that WhatsApp's approach of linking accounts to a phone number doesn't suit Indonesians who change their Sim card frequently. Reuters