WhatsApp may be cannibalising the time Indians spend on its other social media apps, Facebook CEO Mark Zuckerberg said in a conference call with analysts on Wednesday.
WhatsApp remains unprofitable five years after it was acquired by Facebook for USD 19 billion in February 2014. Industry estimates peg its user base in India at 400 million.
“As private platforms have grown, in some cases we’ve seen some cannibalisation of the more public platforms in countries like India, where WhatsApp is very popular,” Zuckerberg said. But since the broader pattern across the world shows that people want to use both private and public platforms, Zuckerberg said he believed building out this private social platform is a much greater opportunity than it is a risk.
Zuckerberg also spoke about data localisation in countries “with a weak rule of law”. “You should expect that we won’t store sensitive data in countries where it might be improperly accessed because of weak rule of law or governments that can forcibly get access to your data,” he said.
He also said that this stance is a risk because if they get blocked in a major country, it will hurt their community and business.
According to a Times of India report, WhatsApp has already started working with a third-party auditor for the localisation mandate. In March, the Reserve Bank of India submitted an affidavit in the Supreme Court accusing WhatsApp Pay of failing to comply with data localisation requirements. Whatsapp has run into trouble with the government over fake news on its platform as well.
Karthik Srinivasan, a communications consultant and former national lead (social) at Ogilvy, told Economic Times that WhatsApp’s usage and engagement are phenomenal, “but I don’t know how it can be monetised. Facebook isn’t as happening as it used to be, but it is still the largest social media network.”
Earlier, Paytm CEO Vijay Shekhar Sharma had accused WhatsApp of trying to monopolise the market and cast aspersions on WhatsApp Pay over security concerns.
A recent Economic Times report quoted two bankers saying WhatsApp Pay may go fully live in five months. The instant messaging service is in the process of setting up the data reservoir in India.
Facebook had about 300 million users in India as of January this year, making it the company’s largest market, according to market research portal Statista. The number of users stood at about 250 million at the end of 2017. The social media giant’s profit dropped by more than half to USD 2.43 billion in the first quarter of 2019. It posted USD 15.08 billion in revenue, up 26% from USD 11.97 billion in the year-earlier period.