last week, a company, who's core profit model is about collecting and sharing user data, announced that it'll collect and share user data. This news, somehow, outraged people. I wonder why.

So, WhatsApp, one of the most popular messaging platforms, owned by one of the biggest conglomerate in the world, announced updates to their terms of service. The way in which it was announced caused a lot of confusion and concerns about privacy. These concerns were amplified after it was noticed that these updates don't apply to users in Europe and UK, where there are stronger data privacy laws.

WhatsApp and Facebook to share users' data outside Europe and UK

Users in Europe and the UK must accept new terms to use the service, but will not see data rule changes.

bbc.com

The aftermath of all this confusion helped the rival messaging platforms, Signal, and Telegram, get an influx of new users at a rate never seen before.

While these platforms are definitely more privacy focused than what WhatsApp is, the reason for their growth was very likely because of the concerns regarding WhatsApp having access to personal messages of the users.

Covering Up

WhatsApp had to put out clarifications and blog posts to try and explain this.

While personal messages are still supposedly safe, the main changes to the privacy policy involve the changes to the user data shared with WhatsApp business accounts.

The negative press generated by this announcement has definitely rattled WhatsApp. The desperation was seen specifically in India when they put out full page ads in newspapers across the country to try and save their users from switching to other platforms.

WhatsApp also started pushing in-app status (which is their version of Instagram/Snapchat stories) to try and clarify their privacy policy changes to inform users that their personal conversations are not affected.

So, technically, there's nothing new to worry about while conversing with your connections on WhatsApp. However, the business account clause could possibly open doors to many big changes to WhatsApp in the future.

All the prospects that these business policy changes bring are way more important for WhatsApp in non-European markets, and specially in their biggest market, India. That's why, it'd be interesting to look at what the business policy changes, along with the existing features of the app could mean for the future in India.

India Outlook

WhatsApp has already become the verb that people use for messaging in India. It could possibly be the most used app in the country right now.

Few months back, WhatsApp rolled out their payment integration in India. This made it easier to transfer money through the app. There's already a big competition in the online payments space in India, and WhatsApp is a new entrant trying to take control in this space. The advantage that WhatsApp has over its rivals is that of a huge userbase already within their ecosystem.

Business accounts are already allowed to connect with their users on WhatsApp, and the addition of the payment gateway within the app would easily help turn it into a proper marketplace.

The business messaging policy changes allow more sharing of data with Facebook. While it claims that this would help businesses with stuff like their hosting services or discovery, the details on the usage of collected data is unclear as it says,

...whether you communicate with a business by phone, email, or WhatsApp, it can see what you’re saying and may use that information for its own marketing purposes, which may include advertising on Facebook...

Here my expectation would be that there's plans to use the business contacts to build a database of users in this newly formed marketplace, and then target them with ads.

WhatsApp however, has claimed that it won't share your data with Facebook, and it's made to seem like Facebook wouldn't be able to target you with ads. However, WhatsApp already has an inbuilt space where it can push its ads. The way it has demonstrated with the privacy policy status that it pushed to everyone.

With the combination of features like payments, business accounts, and status, WhatsApp is primed to set up a new shopping ecosystem within itself.

A few reasons why it would make business sense for WhatsApp in these aspects of building a new shopping ecosystem in India would be,

1. A massive dedicated userbase to collect data from, and surface ads to.

2. Significantly higher reach in the untapped market where the slightly more 'sophisticated' use cases of Facebook, or Instagram don't attract that many users.

3. Other eastern markets already have their similar messaging-first-but-all-other-services-on-top kind of apps which have become a part of their culture. Examples like WeChat, or Kakao are a proof of concept here.

WhatsApp is already the leader of the messaging space in India, and now it'll try and leverage that position to expand and create new avenues for advertisers. After all, Facebook does need to make all the profits it can to justify that ~$22Bn acquisition of a chat app.

Using social media platforms to create a new advertising space is an approach which Facebook has mastered already. Now, they're applying the same formula to their other platforms - like Instagram, and WhatsApp.

I'd written earlier about Instagram's latest updates where I mentioned some similar points about Instagram's goals to create a self-sufficient ecosystem within the app. Check the link below.

Challenge of Driving New Habits on Highly Engaging Products

From starting out as a humble photo editing and social sharing app decade ago, to making you scroll endlessly when you've nothing else to do (or even when you're burdened with tasks), Instagram has built itself to be one of the stickiest products currently.

ishan.scrollstack.com

Migration Problem

The privacy policy fiasco has resulted in lot of users trying to shift to other messaging apps. This has shaken WhatsApp management which you can sense with the desperate PR attempts. However, would it be that easy for WhatsApp to permanently lose out on a big chunk of its audience? I don't think so.

I believe that the exodus from WhatsApp has started due to the fake news about your private conversations being accessed by Facebook. So, all that WhatsApp needs is to convey their users that their private conversations are safe.

Ironically, WhatsApp, the biggest source of fake news in India, now has to counter the fake news about WhatsApp, which was possibly amplified on WhatsApp itself.

Users have already spent so much time on WhatsApp over past few years, that it has become a part of daily life throughout India. So, it's less likely that majority of the users would be making the switch to a secure messaging alternative even after this.

Rather, now the ball is in Telegram, and Signal's court. They would have a tough task to retain all the new users that they've gained.

These are objectively the better alternatives to WhatsApp if you're concerned about privacy. However, the key phrase there is ' if you're concerned about privacy'. Especially in a market like India, where we don't even have proper privacy laws in place, it's tough for people to care about it.

This is why, the retention task for Telegram, and Signal, is not just about presenting new, or better, features to their newly acquired users. It is also about raising the awareness about privacy as much as possible in order to make people understand their USPs. If that's not done well, once the hype of the WhatsApp policy changes dies down, it'll be back to business as usual.

TL;DR

1. WhatsApp policy change notification caused an uproar because people believed their personal conversations would be tracked by Facebook.

2. WhatsApp is rattled and they've started extensive PR for their image cleansing exercise.

3. While personal conversations are allegedly safe, the policy changes would actually affect the business profiles on platform.

4. Along with the features like direct payments, and an advertising space in the status section, WhatsApp would possibly aim to become a complete shopping platform in itself too.

5. The approach might, in some way be similar to the way WeChat, and Kakao have done in the Eastern markets.

6. Telegram, and Signal gained huge amounts of users over the last week because of the concerns that triggered outrage among netizens.

7. Even though they're the better alternative in terms of user privacy, common user won't care much about it, and it'll be a task for them to build awareness about it if they want to avoid these new users from going back to WhatsApp.

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@ishanmanjrekar

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