At the time of this writing, India has over 622 million active internet users, nearly half of whom reside in rural areas. In fact, with an annual growth of 35% in 2018, rural India has surpassed the rate of smartphone and internet adoption compared to its brighter urban counterpart. On this basis, and the fact that the prices of data plans have been falling steadily since 2013, some experts estimate that the number of active Internet users per month will reach more than 900 million by 2025. That’s 900 million people who depend on it. mostly from the internet to communicate with each other, access content for entertainment and share their thoughts on social media. This brings us to an app that for many has become synonymous with everyday communications and entertainment – WhatsApp.
Launched in 2010, WhatsApp is among the most popular apps in India, with the country being its largest market. While the app has over 5 billion downloads worldwide, it was set to hit over 500 million downloads in India in January 2021. This despite controversy over its privacy policies. Since then, the app has launched end-to-end encryption, new privacy features that let you hide your information from specific contacts, and an aggressive advertising campaign aimed at reminding users that their data is safe.
So what’s at stake here?
In a recent report from Wabetainfo, it was revealed that WhatsApp is testing its brand new business directory feature, which has already been deployed in beta in Sao Paulo, Brazil. This feature works the same as the old school (or not-so-old Justdial) yellow pages – you can find companies that offer a range of services near you. While this can be great news for customers looking for services or products, it may void privacy features as we currently know them.
Let’s break down a scenario
Let’s say you’re new to town and need to find out more about the service providers near you. You allow WhatsApp to access your location – harmless enough, right? The app, after all, needs to know where you are to tell you what’s near you. You can now use the app to connect with businesses near you, send messages directly to suppliers, and check for updates on deliveries. If you’ve set up your UPI account on WhatsApp, you can even pay vendors directly through the app. Super practical.
But what happens when local vendors start competing for your attention? They post targeted ads on Facebook that link to WhatsApp, or they create ads that run on Facebook through the WhatsApp interface itself. If they wait a few months, they will also be able to serve ads on WhatsApp through the Status feature (which has a swipe feature similar to Instagram stories). These status announcements will serve the same way as targeted announcements. This is where the breach of privacy can begin.
What are targeted ads and how do they work?
Simply put, targeted ads are created based on your demographics, online behaviors, and shopping habits to expose you to products and services you might like. When a targeted ad is created, advertisers enter data related to your age, ability to buy, location, previous purchases, values, and more. Platforms like Facebook then cross-reference this data with user data to ensure that the ads are served to the right people. Inherently, this requires some breach of privacy (which legally can sometimes be a gray area depending on privacy policies and app permissions).
What does this have to do with WhatsApp’s corporate directory feature?
Online directories derive their income from two main sources. The first is to ask a vendor to list in the directory and pay a monthly fee, and the second is to sell ad space or the promise of more exposure to vendors who have already signed up. The first represents a finite earning capacity, while the second can be unlimited. This is what makes ad revenue so lucrative and ultimately a priority for such platforms. However, in order to promise exposure and deliver the same, platforms like WhatsApp Business Directory will need to access user data to show them the right ads.
The rapid penetration of smartphones and the internet in the country has led to an equally rapid digitalization of businesses. As the IT industry represents billions of dollars in revenue potential, almost every business is expected to earn revenue by integrating digital commerce into their business model, whether it’s selling online through a website or just chatting with customers. on Whatsapp.
According to the MGI Digital India report, we are going to see new economic sectors such as agriculture, logistics, jobs and skills, and education digitize rapidly, creating not only new jobs but also new businesses to explore. for consumers. Ultimately, this will lead to fierce competition within the digital stratosphere, with a heavy reliance on targeted ads and a large budget to buy big data.
So where does the average consumer fit?
As mentioned earlier, the widespread Internet adoption in India is currently being driven by the rural sectors, with new smartphones and data plans being purchased at a higher volume in lower income states. Internet consumption patterns in these low-income states mirror patterns seen in urban areas – most people seek entertainment, communication, and social media when using the Internet. In addition, 90% of rural users with Internet access are also daily users (in urban areas the number is 94% – a tiny gap).
Most brands have saturated Tier 1 markets and are looking to enter Tier 2 and Tier 3 markets to improve reach, expand customer base, and increase revenue. As a result, data on rural customers is much more valuable today than data on urban customers. It is also in short supply. This creates the perfect environment for tech companies like WhatsApp not only to grow their user base, but also to access valuable data that can be leveraged by others.
Sounds familiar? Facebook has enabled Cambridge Analytica to collect data from 87 million users worldwide. The platform had to pay a hefty fine of $ 5 billion and reform its privacy policies after the scandal erupted in 2018. But we are still seeing targeted ads today and it is not a source of revenue that government officials are likely to remove it altogether.
Besides the ease of potentially leveraging data from rural populations where there is little or no awareness regarding consumer rights and data privacy, we might even see the platform accessing children’s data, with more and more more kids owning smartphones these days. Recently, Apple and Google banned over 8 Lakh apps from the App Store and Play Store because they lacked privacy policies. Of these, the majority of applications were aimed at children up to 12 years old. It is fair to say that data on children are just as valuable because of their scarcity as data on the rural population. Both represent largely untapped markets for brands.
It is essential that governments look at the new WhatsApp Business Directory functionality and the possibility of serving advertisements through trained eyes on the horizon and not just at the end result. We can’t even begin to see the ripple effects of tech giants’ access to data. With the rise of AI and machine learning products and consumerism becoming the norm, we are likely to be seen as a collection of statistics rather than as individuals. This is where things get really dark.
Also Read: Whatsapp Expands In Business Directory Market With Latest Offer