WhatsApp to drive social commerce growth for Meta in 2023

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Meta, formerly known as Facebook, has failed to achieve significant growth revenue through its social commerce initiatives on Facebook and Instagram. With less-than-expected revenue growth, the firm has scaled down its social commerce capabilities on both Facebook and Instagram over the last few quarters. This also includes the February 2023 announcement when the firm said that it will stop offering users live shopping on Instagram, starting March 16.

This might seem as if Meta is completely retreating from its social commerce initiatives and focusing more on advertising revenue, which had brought much success for the firm over the years. Although the firm is focused on reviving its advertising revenue growth and is also investing in new-age technologies such as Metaverse, it has an equal focus on the social commerce segment. However, rather than undertaking social commerce initiatives through Instagram and Facebook, Meta is looking at WhatsApp to compete in the growing market globally.

• In November 2022, WhatsApp launched an in-app business directory in Brazil, making the Latin American nation the first market where the firm had launched such a feature. The new feature will enable Brazilian WhatsApp users to search businesses, view products, initiate a conversation with sellers, and now with the central bank’s approval, complete payment transactions with merchants.
• In March 2023, Meta received approval from the Brazilian central bank to launch a merchant payment system, thereby building on the existing peer-to-peer payment system. With the approval, merchants small and large will be able to receive payments from consumers directly through the messaging platform, thereby streamlining social commerce activities.

The regulatory approval means that WhatsApp has gradually turned itself from a messaging app to a social commerce giant in Brazil, where consumers can discover, explore, and make purchases without ever leaving the app. Being one of the largest markets in terms of registered users in the Latin American region, the launch of social commerce capabilities in Brazil is a strategic move from WhatsApp. The firm is expected to use the Brazilian market as a blueprint to launch social commerce capabilities in the global market.

WhatsApp has been seeking to partner with leading retailers, including e-commerce marketplaces such as MercadoLibre, in Brazil. With the launch of the merchant payment system, Meta is expected to forge a series of alliances with retailers across product categories from the short to medium-term perspective. This will accelerate its foray into the social commerce segment in the Latin American region.

Notably, WhatsApp has been making big strides in the global social commerce industry. In India, the social messaging platform partnered with Reliance JioMart. Under the partnership, WhatsApp and JioMart launched an end-to-end shopping experience for users on the messaging platform.

• JioMart has experienced a jump in quarterly orders via WhatsApp. Since the launch, the order volume has increased 9x for the firm. Furthermore, there is an uptick in its active customer base, which is increasing by 37% month on month.

With businesses, such as JioMart, reporting strong growth in order volume and active customer base, PayNXT360 expects more businesses to partner with WhatsApp in India over the next few quarters. In February 2023, WhatsApp partnered with metro rail service providers across India, thereby enabling travelers to book their tickets through the messaging app. Such collaborations will continue to drive the growth of the social commerce industry in India.

Alongside India, WhatsApp and Meta have also trialed out social commerce capabilities in Europe. In partnership with Carrefour, for instance, WhatsApp enabled French consumers to place orders through WhatsApp in December 2022. The initiative enabled consumers to order products across non-food categories, such as gaming, high-tech, and household appliances. Over the next 12 months, WhatsApp is expected to launch more such initiatives across Europe, as it continues to make a big push in the social commerce segment.

These initiatives, undertaken by WhatsApp in Brazil, India, and France, are a clear indication of the fact that Meta is continuing its push in the growing global social commerce industry. With WhatsApp’s strong user base and presence across different regions, Meta can lead the industry growth over the next three to four years.

To know more and gain a deeper understanding of the global social commerce market, click here.