Google’s rich communication services messaging (RCS) platform is emerging as an effective competitor to WhatsApp’s business feature, finding takers across sectors, such as AJio, HDFC Bank and Mamaearth.
Industry experts say that if it continues at this pace, the Google platform stands a good chance of significantly narrowing the gap with WhatsApp over the next two years.
RCS is a modern version of plain text messages, through which businesses and consumers can send rich media such as images, videos and even files using the native messaging app in smartphones.
For businesses, it enables interactive consumer engagement with its scope for two-way interaction — just like how they are using WhatsApp to drive sales. While RCS is also used by non-business users, more traction and revenue opportunity will come from enterprises, as is the case for WhatsApp business, experts said.
Meta has over 200 million WhatsApp business app users per month globally, and a large number of those businesses are in India. The number of businesses using RCS is smaller, though the figure is not available.
The reason why enterprises are adopting RCS is because sending a message via the platform is 30-40% less expensive than WhatsApp.
Further, the channel comes under the purview of Telecom Regulatory Authority of India (Trai) as telcos and communication platform as a service providers (CPaaS) players are also involved in the SMS process.
Route Mobile which is a cloud communication platform provider, says 20-25% of enterprises have currently adopted RCS and are identifying use cases to tap consumers.
“We are getting good response from enterprises for RCS as it is more visually appealing and leads to better engagement compared to plain text. Over the next 18-24 months, we expect 25-30% of the SMS volumes to shift to RCS from a plain text SMS at present,” said Tushar Agnihotri, head of India operations and Asia region at Route Mobile.
Currently, overall industry SMS volume is at 55 billion a month, and it is growing at a compound annual growth rate (CAGR) of 18%.
According to Agnihotri, there is no difference between WhatsApp and RCS. However, RCS has hosted gateways with telecom operators, making it easier for the channel to qualify for receiving messages which are transactional in nature, like from banks. This is because regulators such as RBI and Trai will have higher degree of comfort regulating RCS compared to WhatsApp, he added.
For Sinch, which is also an enterprise communication provider, RCS business in India has grown six times in 2023 compared to last year, and the platform is being used by the company’s top 10 clients largely for financial services.
“With RCS, Google will see good growth in market share in conversational messaging. Currently, WhatsApp may be 3x in terms of mobile penetration, but, in terms of work messaging volume RCS is growing faster than WhatsApp,” said Nitin Singhal, managing director at Sinch India.
One of the challenges which RCS at this stage faces is the reach of its services. This is because this feature needs to be activated by smartphone makers. Currently, about 300 million handsets are RCS-enabled, compared to WhatsApp being used by over 600 million users in the country.
RCS is not supported on iPhones as of now, putting around 56 million iPhone users in the country out of its reach. However, Apple recently said iPhones will support RCS messaging next year onwards.
According to Inderpal Singh Mumick, executive vice president – telecom business, and CEO, Dotgo, RCS has a delivery rate as high as 98% and read rates of 37%, and it is witnessing high engagement from customers. Dotgo is an RCS platform acquired by Gupshup in 2021.
RCS will lead to over $15 billion in additional messaging revenue for operators between 2024 and 2028, globally, according to Juniper Research.
Recently, Google said it has over one billion monthly active users globally with RCS enabled in messages. The company has also introduced new AI features within RCS such as photomoji, voice moods for improved audio quality, screen effects and profile personalisation.
Read this article on Financial Express.
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