Co-founded by two friends right before the pandemic, Zoko is on a mission to make it easy for businesses to conduct commerce on WhatsApp. “WhatsApp is not just an app. For many countries, it’s the internet itself! Most commerce is going to take place on WhatsApp in such countries.” says Arjun Paul YCombinator, the storied…
Why would this even work? Why would anyone choose to buy on WhatsApp?
Arjun: Before I answer that, allow me a question – Let’s think from first principles. Why would anyone buy on a website? Let’s look at how well buying on websites actually work. The average conversion rate for websites worldwide is less than 3%. If the job of your eCommerce website is to get visitors to buy something, you are failing 97% of the time. Do you know what else has only a 3% chance of happening? Losing something in the US mail. Ha! ha! Aromal: Brick-and-mortar stores have 20 to 40% conversion! All that space-age technology, cobbled together by our best-trained marketers and engineers trying to get folks to buy stuff online are, failing 97% of the time!
Oh wow, why is that the case? Why does it not work?
Aromal: Why? Because websites are 80s technology built before mobile phones became ubiquitous and are now being force-fitted into phones. Arjun: If you work in eCommerce, you often hear the phrase “let’s make our website mobile friendly”. Think about what that means. By default, websites are not built for mobile interfaces. That phrase and its results remind me of Obama’s dig "You know; you can put lipstick on a pig. It's still a pig." Ha! Ha! Aromal: Conversion rates on phones are half that of websites, by the way.
And WhatsApp? why would that work?
Arjun: Not “would work”; it's already working. Businesses and customers exchange more than 5 Billion messages every month on WhatsApp! I am not talking about the “good morning” messages in our family groups. I am talking specifically about messages exchanged with businesses and their customers worldwide. See, folks are not waiting on us English-speaking college-educated guys to build anything – Indians are already communicating with friends & family, consuming news and entertainment, falling in love and even turning elections – on WhatsApp. Ecommerce is just an extension of that behaviour. Zoko is just making the eCommerce part easier. So if you are a business that wants to “sell online”, WhatsApp should be at the centre of your e-commerce channel strategy.
Now, this whole hype around Jio Mart is starting to make sense. What do you think of that?
Arjun: I admire Reliance and the Ambanis. They have the courage to “skate to”, as Wayne Gretzky famously said, “where the puck is going, not where it has been.” Courage is a special kind of knowledge. Their bet on WhatsApp and JioMart was perhaps placed 2 or 3 years ago. I admire that knowledge to see the WhatsApp opportunity and the will to bet on it.
Any advice for others like Reliance on how to navigate this opportunity?
Arjun: I am not one to offer advice, but if I were a big house of brands, I would seriously look at building or buying the capability – of having WhatsApp as a channel for commerce. One thing is clear, if you are up against Reliance, you cannot sit on the sidelines. You have to be in on the action – fast! You have to have a horse in the race. You cannot rely on Reliance-built tools to execute your WhatsApp commerce strategy. Aromal: Isn’t that what Reliance did? bought a startup called Haptik a couple of years back and relied on young fresh blood to execute it? That’s a playbook to repeat if you like.
What about the Super App strategy, like TATA NEU?
Aromal: I am not entirely sure about that. It’s like trying to engineer a hurricane. Arjun: Yeah, exactly! Some magic must happen for a butterfly’s wing flap to become a hurricane. You probably can’t wake up one morning, throw some money at it and decide you will build a super app. It’s something that happens to you, not something you build. I’d be happy to be proven wrong, but I wouldn’t hold my breath for now.
So what does the future look like? Is WhatsApp the future of the internet? The future of commerce?
Arjun: If there is a focus, yes. Focus is natural for a small team like Zoko. But an uphill battle for a large company like Facebook. Considering all the battles (some not by choice), it's fighting on all fronts; the vision still has to be executed. A group of focused humans need to make it happen. Aromal: It’s not a free lunch. Don’t forget Apple with its imessage and Google with RCS / Android messaging. They are going to fight hard to take a piece of the pie. Apple’s iMessage is already on more than 50% of American phones! Aromal: Zoko’s is well positioned. We can transact irrespective of the platform. Arjun: Yeah, we are selling spades for the gold rush. Arjun: Remember the early days of the internet, how it was free and open? Google showed up and became a toll collector of the internet. Now, every business must pay a google toll to do everything from selling insurance and cupcakes to allowing folks to find their own website. Just like that, Facebook is sitting on a gold mine - the internet of the next billion people. If they play their cards right, Facebook could become the toll collector of the “WhatsApp internet”. With all its drawbacks, Facebook has succeeded in bringing people together! I have an insane love for the company. Aromal: We are all in! We are betting on the “WhatsApp internet.”