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
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
25 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
/Sport
 

You HAVE to see this MTB Tsunami Fip!

You might not know what a Tsunami Flip is, but just watching this will turn your eyes into saucers. Check out this first-ever MTB Tsunami Flip in contest here.

 
 

Where were you when you last felt alive?

Mountain unicycling – say WHAT?
Bear Grylls’ top 10 things kids should do outdoors
Top tips to ensure you’re running right
Stand-up paddle boarding a great workout

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Magical Massinga

Spend 5 nights at the gorgeous Massinga Beach Lodge in Mozambique and only pay for 4 from R13 220 per person sharing. Includes return flights, accommodation, transfers and romantic turndown. Book now!

Kalahari.com - shop online today

Deal of the week!

20% off Afrikaans books, music and DVDs. Offer valid while stocks last. Shop now!

Save up to R1000 on Hisense smartphones!

View the large range of Hisense smartphones. Buy today and save up to R1000!

Hot gaming titles – available for pre-order!

Call of Duty: Advanced Warfare Day Zero Edition, Far Cry 4, Grand Theft Auto 5 and more. Pre-order now!

Get a free eBook

Buy 3 eBooks and get the cheapest FREE. Offer valid while stocks last. Shop now!

Bargain box – 60% off

Reduced prices, very limited stock. While stocks last. Hurry and 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

Power and leadership are emphasized today. It is important to strategize and delegate well otherwise you may end up with too much...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.