SUMMARY
WhatsApp’s Indian unit has reported a revenue of INR 6.84 Cr in FY19
The company spent INR 5.99 Cr for the year
WhatsApp has a user base of 400 Mn in India
India has been one of the key markets for the Facebook-owned WhatsApp’s growth. However, even with a user base of 400 Mn, the company has been facing multiple regulatory hurdles.
However, one feature that has worked out well for the company is its WhatsApp Business platform. According to a WhatsApp survey, 77% of Indian SMEs on WhatsApp has said that the online messaging platform has helped them to connect with their customers from across the country. Further, 62% of the WhatsApp Business users agreed that the platform has helped them to increase sales and has become an essential part of their business.
As a result, WhatsApp’s Indian unit, Whatsapp Application Services Private Limited, has reported a revenue of INR 6.84 Cr in its first year of operations. Registered in 2018, the company had zero revenues for FY18, but has significantly improved its business in FY19.
The company spent INR 5.99 Cr for the year, which included employee benefits of INR 3.57 Cr. As a result, WhatsApp has reported a profit of INR 62.3 Lakh in FY19, as against the loss of INR 5 Lakh in FY18.
Globally, over 5 Mn businesses are using WhatsApp Business app every month, according to the company, and at the moment, there is no subscription fee to get a WhatsApp Business account.
This has attracted several small and medium businesses (SMBs) to the WhatsApp Business platform. The company says it has touched categories such as ice creams and handicrafts with this SMB and SME-focussed approach.
WhatsApp Business enables features such as a business profile tag with fields such as name, address, contact details and description, automated messages and greetings; message labels similar to Gmail; and quick replies or templated messages saved by the business owner beforehand.
However, at present, WhatsApp is stuck in limbo for its digital payment plans. Scheduled for launch in May 2018, WhatsApp Payments had hit a roadblock with the issues of data localisation. For this, in August, the SC asked the Reserve Bank of India (RBI) to examine WhatsApp Payments for six weeks and report if it has fulfilled its data localisation requirements.
In November, RBI has told the Supreme Court that WhatsApp is non-compliant with data localisation norms and that it has directed the National Payments Corporation of India (NPCI) to not allow a full-scale launch of the payments service by the Facebook-owned company.
Further adding to the woes of WhatsApp was the Pegasus spyware controversy. It was alleged that the instant messaging service platform was used by an Isreali spyware Pegasus to spy on Indian users, who were mostly journalists, academics, lawyers and activists. The government then started questioning WhatsApp’s capabilities to handle something as sensitive as digital payments.
Since then the government claimed that WhatsApp hadn’t shared any information regarding the breach, while the latter claimed it made two submissions about the breach in May and September. However, IT ministry officials said the report was vague and did not explain the breach clearly.
