WhatsApp deal with Facebook may kill Mxit

2014-02-20 14:30
Facebook intends to use messenger application WhatsApp to grow its user base. (Duncan Alfreds, News24)

Facebook intends to use messenger application WhatsApp to grow its user base. (Duncan Alfreds, News24)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

Cape Town - Facebook's acquisition of WhatsApp represents a direct threat to local chat application Mxit, says an analyst.

Facebook announced on Thursday that it had bought WhatsApp for the huge sum of $19bn, including $4bn in cash, as the California-based web titan looks to grow to the next billion users.

WhatsApp has around 450 million active users and the fact that the chat application is growing in emerging markets was probably a determining factor in Facebook's decision.

"WhatsApp's growth potential in emerging markets is much higher that Facebook's because it is already integrated into feature phones and even semi feature phones, and is fast replacing SMS as the messaging option of choice," said Steven Ambrose, Strategy Worx CEO.

WhatsApp has already grown exponentially in SA with a user base of 10 million and Ambrose said that the tie-up with Facebook will make it increasingly hard for companies like WeChat and Mxit.

Young audience

"The acquisition will make it increasingly difficult for platforms like MXit and WeChat, a WhatsApp rival out of TenCent in China (of which Naspers owns over a third), which are working hard to develop market share locally," he said.

At a continental level, smartphones - or even feature phones - are still in the minority and expectations are that as people migrate toward smarter devices, WhatsApp could experience a surge in growth as users avoid the cost of SMS.

"With smartphone penetration sitting at well below five percent in an African context, dumb phones and features phones predominate. As people become connected, the move to WhatsApp is a natural one as an affordable alternative to SMS," Ambrose said though he conceded that internet data was still a cost barrier in developing markets.

WhatsApp is a particularly good fit for Facebook because the former's audience is young and growing. They also spend a significant amount of time engaged with the application.

As teens in the US turn to networks such as Twitter, WhatsApp may give Facebook a new energised audience, with a focus on mobile devices.

Facebook has said that the WhatsApp will remain independent, but Ambrose thinks that there will be some integration in the platforms.

"While Facebook has initially said that Facebook Messenger and WhatsApp will remain separate, Strategy Worx expects Facebook to begin to integrate social media functionality into WhatsApp, allowing users to begin to share content as they would on Facebook, changing WhatsApp's pure play instant messaging offering into an affordable social communication platform for the developing market."

SA adoption

With around 12 million smartphones and 20 million feature phones in SA, WhatsApp is poised to grow its user base exponentially.

Ambrose added that the Facebook muscle behind cross-platform WhatsApp will see greater adoption in SA, potentially closing the window on Mxit, WeChat and BBM.

"It will be very difficult for other instant messaging and social media platforms to combat this new partnership, ensuring Facebook’s dominance for years to come."


- Follow Duncan on Twitter
- News24
Read more on:    whatsapp  |  mxit  |  facebook  |  social networks
NEXT ON NEWS24X
SHARE:

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
24 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
/News
 

The most epic YouTube mashup of 2014

Try to see how many of these things gone viral you recognise in this epic mashup YouTube video!

 
 

I love summer.24

Summer Survey!
Stay in shape this summer
Ultimate fails compilation 2014
This sleeping bulldog is you during the holidays

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Kalahari.com - shop online today

Grand Theft Auto 5

Now available on PS4, Xbox One and PC from R649. Buy now!

Festive gifts!

Check out our awesome range of festive gifts to make everyone’s wishes come true. Shop now!

Save on Samsung

Cameras, mobile phones, TVs, Tablets and more. While stocks last. Shop now!

Save up to R2200 on electronics! – As seen in the catalogue

Wishing for tech gadgets this festive? Save up to R2100 on hot tech products at kalahari.com. While stocks last. Shop now!

30% off the bestselling books

Save big on the most captivating reads of 2014. While stocks last. Shop now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Horoscopes
Aquarius
Aquarius

Today is one of those days where you could react and say something and then have to pick up the pieces. Take your time before...read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.