Today, we introduced an exciting and innovative new product that we have been developing over the past few months — the Nexmo Chat App API. The vision we have for the API is to enable brands to engage their customers on a genuine and intimate basis via global chat apps like WeChat, WhatsApp, Line, Facebook Messenger, Kakao, Kik, Tango, SnapChat and all others.
This API adds to Nexmo’s portfolio of innovative cloud communication APIs and services. Nexmo’s product suite enables enterprises to engage with mobile consumers via the consumer’s preferred communications channel, be it voice, SMS or chat applications.
This is the first in series of blog posts that will go deeper into the dynamics of chat apps, brand-user engagement, and our solution. In this post we will talk of the trends that are driving brands to invest in communications via chat apps, the challenges they may face in doing so, and how we envision where we can help. Sign-up here to be notified of the new posts.
Taking over the world
In just a few years, billions of consumers transitioned from largely static and monochromatic P2P SMS messaging to the rich, engaging and entertaining experience of chat apps. Initially, carriers charged high fees for P2P SMS messages. Chat apps provided an inexpensive alternative, and millions of people flocked to them to avoid those high carrier fees. The rapid shift to chat apps resulted in a significant downward impact on global carrier revenues to the tune of $33 billion in 2013.
The top 10 chat apps driving this shift have acquired over 2 billion users. There are likely another 150+ smaller players in niche segments globally.
Most major countries have a dominant player, with WhatsApp and Facebook Messenger holding a lead in many markets outside of Northern Asia, North America and the Middle East. Asia is monopolized by WeChat/Weixin in China, LINE in Japan, Taiwan and Thailand, Kakao in Korea, and Viber in multiple countries across the globe.
After growth, comes money
After chat apps acquired huge customer bases, they began exploring ways to monetize, initially by selling virtual goods like games and stickers (e.g., emoticons).
Now, messaging apps are moving into new, innovative sources of revenue while looking for ways to solidify their position in their core markets.
Many chat apps are allowing brands to have a presence on their platforms by way of Official Business Accounts (“Official Accounts”) to drive new revenue by delivering tangible user benefits while creating user stickiness. These official account services offer global brands the opportunity to genuinely and intimately engage one-on-one with consumers via mobile marketing, ecommerce sales, and customer support, all in a single branded chat account. It’s following the mantra of, “Be where your customers are.” Making it easier for users to access timely and relevant information, in a place where they are already spending a lot of time, is a winning formula for brands to engage with their customers.
WeChat is clearly the “Official Account” leader, with millions of businesses already launched on the WeChat platform in China. Every business, from airlines, to financial institutions, to retailers, to hotels & restaurants, have shifted away from branded apps to having their app integrated in WeChat. LINE, Kakao and Kik have launched Official Account services and just last month, Facebook Messenger announced their strategy to shift to business channel offerings with a clear focus on enabling customer service communications.
Even WhatsApp, known for not communicating any commercial activity on its platform, has allowed, albeit unofficial, Official Accounts. There are examples including customer service use cases at public utilities in India, and even the BBC has a publishing service on WhatsApp. This clearly demonstrates the unmet market demand for opt-in services like customer service and content publishing.
WeChat, Line and Kakao have also moved into new services including online payment, ecommerce stores, taxi and delivery services to name a few. Tango, WeChat, Snapchat and Blackberry, for their part, have opened the doors for in-app advertising.
Consumer is king: Opportunity for brands
The future will no doubt bring further disruption to a broader set of industries and impact the existing Application-to-Person (A2P) messaging market. We at Nexmo believe that, just as P2P messaging drove hundreds of millions of dollars in virtual goods revenue to WeChat, LINE and Kakao, an even larger opportunity exists with A2P messaging, facilitated by chat apps and controlled by the chat app user.
In the near term, just as we have seen happen in China, we’ll see consumers controlling the discussion and a significant shift of commerce to the chat app channel. This is all about consumer choice over their preferred channel. Consumers will choose their preferred chat app to communicate to brands and when that brand can communicate with them. For example, I can choose my favorite store to view the shirts on sale today. I can then purchase and receive delivery status alerts all in my chat app. If I have a problem with the purchase, I can immediately connect with customer service right within the chat app. No longer will I need to jump from one branded app to the next to make a purchase, then call on the phone when I have a problem with the purchase: all interactions are centralized in the chat app.
This rapidly evolving chat app market creates challenges for brands. Today, brands manage all online customer interactions in a central platform. Brands have a marketing cloud, a sales cloud and a service cloud platform solution to manage all customer interactions over multiple communication channels. In order to include the new chat app channel in their central service platforms and reach their customers globally, brands need to connect to WeChat, Line, Kakao, Kik, Facebook Messenger and the 150+ apps across the world. It’s a daunting task.
The number of new app connectivity requirements, changing APIs, business agreements, and legal team reviews alone can take months to get approval for. Not to mention, the ongoing monitoring and maintenance of Chat App APIs. The chat app world is quickly growing into a vast web of complexity.
The Nexmo solution
To solve the complexity issues, Nexmo has added the Chat App API to our portfolio of industry-leading messaging and voice APIs. This simplifies the connectivity issues for brands and their CRM platforms. Nexmo also enables the chat apps to reduce the burden of having to manage hundreds of brands by simplifying the connectivity across Marketing, Sales and Customer service channels. That way, we can provide our brand customers with the most robust and extensible offering of omni-channel cloud communications on the market.
Nexmo is also leading the way in defining the business service API standards. Chat apps get the added benefit upon engaging with Nexmo.
In upcoming posts, we will delve deeper into various aspects of the chat app landscape, user behavior, opportunities for brands, pain points, and more details on our solution. If you want to learn more, or would like to be considered for beta access to the API, sign up here.
Note: All logos are trademarks of their respective brands