Genuine Aid Or Business Boost: Is WhatsApp's Support Really Benefiting India's SMBs?

A fashion retailer based out of the popular Lajpat Nagar market in Delhi has been using the WhatsApp Business application for the past year and has been witnessing a positive impact, claimed WhatsApp in its impact report titled ‘Fast Lane to Social’.

“Customers who cannot physically reach my shop from South India can reach me through WhatsApp Business,” the report quoted a fashion retailer as saying. Starting in January 2018, the total number of users using WhatsApp Business is 200 million globally.

Now the big question is how this application helps small businesses in India. WhatsApp Business provides a platform for micro and small businesses and solopreneurs in India to connect with customers, explore new markets, and establish a digital presence. The app offers tools to manage operations, process orders, and expand reach, including international markets.

Moreover, the Confederation of All India Traders (CAIT) and Meta’s ‘WhatsApp Se Wyapaar’ program aims to digitally train and upskill 10 million local traders on the WhatsApp Business App. The partnership will be implemented in 11 Indian languages across all 29 Indian states.

The partnership also provides 25,000 traders access to the Meta small business academy, offering certification that enhances digital marketing skills. Notably, a small grocery store in Bhubaneswar saw as little as 1 to 2 per cent direct revenue growth after using WhatsApp for online orders and payments, with 10 to 12 per cent of orders coming through the platform.

Last year, a leading media house reported that WhatsApp's new business messaging pricing policy will substantially increase marketing costs for millions of small and medium enterprises (SMEs) that depend on the platform. The updated pricing structure introduces variable rates based on message type i.e. utility messages at around Rs 0.3082 per message and marketing messages at around Rs 0.7265 per message

Business Messaging on WhatsApp, people can either reach out to a business directly or need to opt in to receive updates before a business can message them. A WhatsApp Spokesperson told BW Businessworld, “ As more and more people choose to chat with businesses on WhatsApp, we’re working with businesses to help them create valuable messaging experiences for their customers while driving value for their bottom lines. We are experimenting with new approaches that include limiting messages with updates and offers that are less likely to be read, and will continue to refine our systems as we gather feedback .”

Safety Concerns
In India, small businesses on social media platforms face significant safety and data security risks. Cyber threats, such as phishing, malware, and ransomware, can compromise business and customer data, leading to financial loss and reputational damage. Social media platforms' data-sharing policies and lack of transparency also raise concerns about how user information is used. Furthermore, public-facing platforms make businesses vulnerable to online harassment, intellectual property theft, and reputational attacks. Inadequate password management, outdated software, and unsecured connections can exacerbate these risks.

A 2022 study by the cybersecurity company, NordLocker revealed that India is among the top countries hit by ransomware attacks with more than half targeted at the nation’s small businesses. Notably, the report stated that MSMEs with an employee base of 500 are at the highest risk, consisting of about 54 per cent of total attacks from January 2020 to July 2022.

Akamai Technologies, a cloud company in a report has stated that the use of zero-day and one-day vulnerabilities has led to a 204 per cent increase in total ransomware victims between Q1FY2022 and Q1FY2023 in Asia-Pacific and Japan (APJ).

The report also found that ransomware groups increasingly target the exfiltration of files and the unauthorised extraction or transfer of sensitive information, which has become the primary source of extortion. This new tactic indicates file backup solutions are no longer a sufficient strategy to protect against ransomware.

“WhatsApp is an end-to-end encrypted messaging platform, which means only you and the person you're communicating with can read or listen to what is sent, and nobody in between, not even WhatsApp. WhatsApp is one of the few platforms to build product features and tools that constrain virality on the platform: forwarding labels, forwarding limits, ability to block and report,” the spokesperson added.

The spokesperson explained that while end-to-end encryption is the foundation of what keeps calls and messages secure on WhatsApp, the company consistently innovates and adds privacy-first features that further strengthen and add to WhatsApp’s built-in layers of protection that give people more control over how they use WhatsApp.