Increased platform presence
The OTT communication services market has enjoyed substantial growth, and the trend is expected to continue. Owner of the most widely used communication platforms, WhatsApp and Messenger, Facebook remains the global leader. The top messaging services are becoming consumer-centric platforms, incorporating other services as a way to generate new revenue streams.
Still healthy growth
According to IDATE DigiWorld, the global communication services market will reach 10.58 billion EUR by 2023, capitalising on the development of new devices that can take greater advantage of these services, combined with better network performance for video. Asia-Pacific continues to dominate the market in terms of usage, and especially of efficient monetisation and innovation, boasting an estimated 50% share of global revenue. Compared to other online markets, OTT communications is still a relatively small market, however, and growth is even expected to slow over time. The main strategy is one of indirect monetisation, i.e. to monetise other services that can be accessed through the communication tool. The market is still fragmented, with WhatsApp and Facebook Messenger leading in Europe and North America, whereas WeChat, Viber and Line are the market leaders in China, Russia and Japan.
Communications sector continues to grow at a moderate pace
Progression of regional communication platform revenue
Local players rivalling Facebook
Facebook is still number one worldwide in the OTT communication services market, with 1.6 billion active monthly users on WhatsApp. Messenger is a close second with more than 1.3 billion active monthly users. To consolidate its lead, the social media giant announced that it would be making it easier to communicate between its three flagship apps: WhatsApp, Instagram and Facebook Messenger.
Facebook is nevertheless having to compete with powerful local players, especially in several countries in Asia-Pacific, starting with WeChat, owned by Chinese Internet giant, Tencent, and which is by far the country’s most used instant messaging platform and, with 1 billion users, just behind WhatsApp and Messenger, both of which are censored in China. Other local challengers include Viber, owned by Japanese heavyweight, Rakuten, one of the most popular messaging apps in Israel and India, which is home to more than 200 million users, and Line, owned by the eponymous Japanese Internet company, and one of the most popular mobile messaging platforms in Japan, Taiwan and Thailand, which has more than 200 million users.
WhatsApp, Facebook and WeChat top the communications platform market
Number of active monthly users for messaging/chat/VoIP services
Consumer-centric diversification strategy
Market players are expanding their communication platforms by adding new features, such as payment and booking services, to increase user loyalty and make their sites more sticky. Facebook, for instance, is gradually incorporating QR codes and a “Share to Facebook” option. Through its mini-programmes, WeChat offers users advanced features for e-commerce, task management, coupons… Customer service is also steadily being incorporated into WhatsApp to facilitate interaction between the company and its users. Facebook plans on adding “Status ads” to WhatsApp in hopes of boosting the currently slowing growth of its ad revenue.
Mini-programmes increasing time spent on WeChat
Progression of WeChat mini-programme numbers and screen time
A new environment that enables companies to interact more with customers
With their large user bases, messaging apps are working to forge ties with businesses, to help them keep in touch with their customers. WeChat was the first to enable companies to open an official account, back in 2015, and to interact with Chinese consumers in various ways. WhatsApp entered the B2B universe by launching the WhatsApp Business App in early 2018. In April 2019, the company reported that 5 million small businesses were using the free app, whose main targets are emerging markets such as India and Brazil. Aimed more at medium-size and large businesses, WhatsApp also launched the WhatsApp Business API in August 2018.