RCS, Google’s Rich Communication Services messaging platform, is swiftly emerging as a strong contender against WhatsApp’s business features, garnering attention and adoption across various sectors, including prominent names like AJio, HDFC Bank, and Mamaearth.
This platform’s appeal lies in its evolution beyond conventional text messages, allowing both businesses and consumers to exchange rich media like images, videos, and files using the native messaging app on smartphones. This functionality mirrors WhatsApp’s capabilities and enables interactive engagement between businesses and consumers, resembling how WhatsApp is utilized to drive sales.
Although non-business users also utilize RCS, experts suggest that its primary traction and revenue potential lie within enterprises, akin to the success experienced by WhatsApp Business. As RCS gains momentum, experts anticipate it may substantially close the gap with WhatsApp over the next couple of years, especially if its adoption among businesses continues at its current pace. The landscape of business communication platforms in India is witnessing a notable shift, with enterprises’ growing adoption of Rich Communication Services (RCS). While Meta’s WhatsApp Business enjoys a substantial user base, particularly in India, RCS is gaining traction due to its cost efficiency and regulatory advantages.
One primary driver for enterprises embracing RCS is its cost-effectiveness, offering a 30-40% lower cost for message transmission than WhatsApp. Additionally, the Telecom Regulatory Authority of India (TRAI) oversees RCS, considering the involvement of telecommunication companies and Communication Platform as a Service (CPaaS) providers in the SMS process.
Cloud communication platform provider Route Mobile reports that approximately 20-25% of enterprises have already adopted RCS, actively exploring diverse consumer engagement opportunities. They highlight the visual appeal of RCS, leading to enhanced engagement compared to conventional plain text messaging. Anticipating a significant shift in the next 18-24 months, they foresee 25-30% of SMS volumes transitioning from simple text to RCS.
The industry’s SMS volume currently stands at 55 billion per month, demonstrating a steady compound annual growth rate (CAGR) of 18%. According to Tushar Agnihotri of Route Mobile, while WhatsApp and RCS share similarities, RCS enjoys an advantage due to its hosted gateways with telecom operators. This infrastructure supports RCS in qualifying for transactional messages, such as those from financial institutions, offering regulators like the Reserve Bank of India and TRAI a higher level of comfort in regulating RCS than WhatsApp.
India’s RCS (Rich Communication Services) sector has witnessed remarkable growth, with Sinch reporting a sixfold increase in its RCS business in 2023 compared to the previous year. Notably, their top 10 clients, primarily in financial services, have embraced the platform for their communications needs. According to Nitin Singhal, Sinch India’s managing director, while WhatsApp currently enjoys three times the mobile penetration of RCS, the latter is experiencing faster growth in work messaging volume.
Despite its promising potential, RCS faces certain challenges, particularly in reach. Activation of RCS services relies on smartphone manufacturers, resulting in approximately 300 million RCS-enabled handsets in contrast to WhatsApp’s usage by over 600 million users in India. Moreover, the absence of RCS support on iPhones leaves around 56 million iPhone users disconnected from this service. However, Apple’s recent announcement promising RCS messaging support on iPhones starting next year aims to bridge this gap.
Inderpal Singh Mumick, Dotgo’s executive vice president, highlights RCS’s impressive delivery rate of 98% and a 37% read rate, showcasing substantial customer engagement. Dotgo, now under Gupshup since its acquisition in 2021, underscores RCS’s ability to capture high levels of customer attention.
According to Juniper Research, the global RCS market is forecasted to generate over $15 billion in additional messaging revenue for operators between 2024 and 2028. Google, with over one billion monthly active users using RCS-enabled messages globally, has introduced several new AI features within RCS, including photomoji, voice moods for enhanced audio quality, screen effects, and profile personalization, underscoring the platform’s ongoing evolution and its integration of advanced functionalities.
FAQs
1. What is RCS, and how does it differ from WhatsApp?
RCS is a messaging platform that allows users to exchange rich media like images, videos, and files via their smartphone’s native messaging app. It resembles WhatsApp’s capabilities and offers interactive engagement between businesses and consumers, similar to WhatsApp Business.
2. What advantages does RCS offer over WhatsApp for businesses?
RCS provides a cost-effective platform for communication, regulatory advantages with involvement from telecommunication companies, and visual appeal, leading to enhanced consumer engagement compared to plain text messaging.
3. What are the future prospects for RCS in the global market?
Analysts project a positive growth trajectory for RCS, with the global market expected to generate over $15 billion in additional messaging revenue for operators between 2024 and 2028. Google’s continual innovation and integration of advanced AI features within RCS underscore its ongoing evolution and potential.
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