11th December 2020
POV: WhatsApp Carts
Background:
WhatsApp is adding a shopping cart function to its platform to make it easier for consumers to order multiple items via the app. The feature is being rolled out globally this week.
Details and Implications:
Last month, Facebook added a shopping button to its popular messaging app WhatsApp, which boasts 2 billion users. The feature enables users to browse a store’s catalogue and then message the merchant if they find something they wish to buy. The shopping button and subsequent conversation allows for potential transactions to take place, which is helpful to merchants but the process until now didn’t have a traditional checkout flow. Facebook is looking to improve this with the launch of carts.
With carts, users can add multiple items into their cart after browsing a catalogue and the order request will be sent in a single message to the merchant. This should make it easier for the 175 million business accounts already processing purchases through messages, to accept and track orders and improve customer service and also create a better user experience for the shopper because it replaces the need for multiple messages back and forth.
However, there is currently no payment option in WhatsApp, so payments have to be managed independently. Support for making payments in-app is still in its early stages globally. Facebook tried to launch WhatsApp payments in Brazil earlier this year but it has since been blocked by the country’s central bank. However, it has brought payments successfully to India where WhatsApp has its highest number of users.
At the moment, WhatsApp has a strong user base but doesn’t make much money. With the launch of new commerce capabilities and expansion in its commerce features, it could over time be a credible challenger to other platforms, if not an ecommerce giant like Amazon. It would have particular strength in emerging ecommerce markets like India as it could provide a range of new opportunities for SMBs looking for new, cost-effective ways to connect with and sell directly to consumers.
Prior to this launch, WhatsApp released other features to push the app’s function towards commerce; including QR codes, a dedicated shopping button, the ability to share catalogue links in chats (and therefore ask questions about items and make purchases) and free storage to merchants to store their business messages.
Summary:
WhatsApp’s update is another example of the continuing shift towards the expansion of commerce capabilities across digital platforms and the integration of media and commerce to create smoother customer experiences - in short, the world of media and commerce is integrating faster than ever. Enabling consumers to easily discover information about products and order within the app benefits both customer and business. The only potential worry on the horizon for Facebook is the lawsuit launched this week in the US by federal regulators and more than 45 state prosecutors, accusing the social media company of taking illegal actions to buy up rivals and stifle competition.
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