DISCLAIMER: The views expressed below are completely my own and my initial impression about the application.
I stumbled upon a new app called Whizzle today. Its literally watsapp for businesses. Quite an interesting app.
Image copyright: Whizzleapp.com
What is Whizzle?
You chat with local businesses to order items in a watsapp like user interface.
Design
Whizzle has a only mobile app business model. The website and mobile app design are extremely neat. The website provides just the necessary info and looks very neat. One big problem is that I couldn’t find the link to the app in the website. That would be the first thing you put up in the website for a app based business.
The mobile app also looks very neat.The interface is extremely similar to watsapp. I guess this decision was made consciously since it decreases the learning cost of the user and makes adoption easier. The app currently lists shops only in Gachibowli area of Hyderabad in India in the categories of Restaurants, Pharmaceuticals, Groceries, media and others. The restaurant listings are pretty comprehensive and it will be fun to see how it increases conversion for these vendors. One problem I can see is that there are too many listings in the restaurant section. These many options usually confuse customers and often let them take complicated decisions. Better apps do not let consumers think and provide the option directly to them. It is better if the listings could involve more subsections or just reduce the listings based on user preferences and restaurant ratings. This is something they can look for future enhancements.
Market:
Lets have a look at whether there is a market for this kind of mobile app. To understand that, we need to look at how customers shop currently at these places. The app focuses mainly on delivery or takeaways in these shops. This is currently done using phone. Users in general prefer texting over calling strangers. This fact works in favor for the mobile app. Also, the texting process takes away the possibility of mis-interpretation of data in case of conveying orders and addresses. Overall, once a user uses the mobile app to order goods, he will most likely be interested in using it again. But this also has several problems.
1. The vendors need a dedicated person to answer the queries and it needs to be real time. Customers will not be willing to wait for a long time.
2. It is very easy for a new application to copy the same thing and release. The barrier to entry is low. Some shops even use watsapp for the same purpose.
3. Most importantly, big vendors have already started using in-app chat applications to get a similar feature within their mobile apps. This will cause problems for this app in expanding to big chains of restaurants.
But overall, there is a clear market for this app. It all depends on how convenient people find it and how the response from the vendors is.
Growth:
The growth strategy for this app is very simple. Find new vendors and add them to your supply. They can even advertise in these vendor shops to target customers visiting the shops. Probably enable a QR code scan at the shop? There is some kind of virality in the business model and the app should pick up once the initial good feedback starts flowing.
Revenue:
I cannot say for sure but I believe Whizzle is currently not charging the vendors or customers to come on the app. It is completely free and it trying to build its customer and supply base. Once there is a sufficient traffic to the app, they can start charging the vendors to list on their portal. They should even think about having different pricing layers to order the listing. This will generate some additional revenue. But this method will also result in some users leaving the app due to lower order listing and very less traffic.
I believe the customers should never be charged for using the app. The revenue should only come from vendors. This is because the switching cost for the customer is quite low and the initial inhibition in signing up for the app is significantly increased when you start charging. Also, the supply is attracted by the existing customer base in the app.
The other revenue stream can be data mining where you have the complete household purchase pattern of a customer. This is the perfect data that is coveted by lot of sellers. This can be sold to external companies that are looking to target specific customers.
Finally, I personally detest utility applications using advertisements for revenue. These apps should not be using advertisements since it destroys the value added by the limited real estate. It should stick to charging the vendors.
Overall, it’s a very good application that is worth trying out. The only problem is that it is too much dependent on the initial response from the vendors. If the response is not good or not carried out, there is very little chance that the user will try the app again. It is paramount that whizzle chooses its initial set of vendors very carefully and establishes a brand for itself.
Business Fever 