Facebook’s messaging service WhatsApp introduced a new business search feature in its app on Wednesday. This allows WhatsApp users to find stores and services through an in-app directory, is the latest feature from Facebook to boost e-commerce with its services. Matt Idema, Facebook’s vice president of business messaging, said in an interview that this may be the primary way people start a business process on WhatsApp.
Unlike Facebook and Instagram, WhatsApp doesn’t place ads in its app. According to Idema, companies used to advertise their WhatsApp numbers on packaging or websites, or used Facebook ads to get users to chat on WhatsApp.
The messaging service is increasingly appealing to business users with a specialized app for small businesses and an API, or some kind of software interface, for larger companies to connect their systems and generate revenue.
As online retail sales continued to boom during the COVID-19 pandemic, Facebook has brought in-app purchase capabilities to all of its apps. In June, Zuckerberg announced that Facebook’s Shops feature would be extended to WhatsApp in several countries. In recent years, WhatsApp has also introduced shopping tools like product catalogs and shopping carts.
WhatsApp said the new test would include thousands of businesses in categories including groceries, retail and local services in certain São Paulo neighborhoods. Idema said that India and Indonesia are good next candidates to expand the feature.
The company has faced backlash from users due to confusion over privacy updates and has been fined by the Irish Data Protection Authority for violating privacy. Idema does not rule out WhatsApp introducing in-app advertising in the future. He said that there is definitely a path to advertising, which is Facebook’s core business model, which I think will be part of WhatsApp’s business model in one way or another in the long run. According to WhatsApp, around a million advertisers currently use Facebook and Instagram “Click to WhatsApp” ads to drive users to the messaging app.
Idema said WhatsApp, which bought Facebook for $19 billion in a landmark deal in 2014 but has been slow to monetize its features, is also interested in non-advertising models such as developing software that allows businesses to manage their services in the Facebook applications.
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