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Social messaging apps to go past the 2 billion user mark in 2014

WeChat social media

Look, we already know social messaging apss are big. WhatsApp now has 350-million active monthly users and WeChat, its biggest rival, went past the 270-million active user mark earlier this month. Other Asian apps like Line and KakaoTalk meanwhile are also claiming user number numbers in the hundreds of millions.

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Thing is, it looks like we’re only at the start of the social messaging app explosion. According to research house Ovum, the space will seriously take off in 2014, more than doubling its user base to around the 2-billion mark.

The number of messages being sent across these apps meanwhile is set to grow from 27.5-trillion in 2013 to 71.5-trillion by the end of 2014.

According to Ovum analyst Neha Dharia, the growth is being driven by a number of factors, including the proliferation of more affordable smartphones as well as the continuing general shift toward mobile.

“There is an increasing shift to mobile devices on either side of the development process and there is no doubt that mobile-first services make fuller use of the advantages of mobile than services that are ported from the PC to mobile,” she says.

It’s also worth bearing in mind that the mobile internet used on variety of mobile devices is rapidly taking off in developed and emerging markets alike and will form the basis of the internet in the future.

All about the money

Until now, there have been a lot of questions about how these services will make money. WhatsApp’s ad-free subscription-based model has worked well for it, but that’s not necessarily true of everyone — especially in emerging market countries.

“There are questions over the longevity of social messaging without a sound revenue stream, and some expect these players to be fattened up through VC funding and then to be sold. That might be true for some of the smaller players in the industry, but the bigger players have moved beyond the stage of accumulating a large user base and are now focusing on growing their revenues,” the report notes.

Ovum reckons however that we’ll start to see the biggest social messaging apps making serious revenue next year. According to Dharia, this “will assist in the evolution of social messaging players’ offerings from messaging apps to holistic mobile media platforms”.

One of the first steps a number of these apps have taken in that direction is stickers, although they’re generally sold at such low prices that they have to move in serious numbers to make any real impact on the company’s bottom line.

Another strategy is to offer more solid content on the platform. Perhaps the most cogent example of this to date is Tencent’s decision to sell games on WeChat.

“The key to monetization is having a large and loyal user base, which is becoming a reality for the top four players,” it adds.

Another nail in the carriers’ coffin

The rise of these social messaging apps also means that traditional mobile carriers will face more pressure as one of their traditional revenue streams increasingly fall away. This is particularly so in emerging market countries, where smartphone growth has, until now, been much slower. In some countries, we’ve already seen the operators trying desperately to fight back, with offers that let you send a ludicrous number of texts a month for a relatively nominal fee.

“The rise of this new breed of mobile-focused, messaging-centric OTT players will be the driving force behind the changes in social networking and media services. By 2014 users will no longer need to access services only through a social network. Rather they will be able to access a service on its own. This service will then be connected by several channels to social networks, social media and other consumer services. What was once a horizontal service platform will have evolved into the glue holding several consumer services together,” Dharia says.

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