How dependent are Indian businesses on Facebook and WhatsApp?

Social media services Facebook, Instagram, and WhatsApp were recently hit by an outage that lasted almost six hours.

Given that it was night in India at the time of the outage, it may not have had as much impact here as in other places. But it should make businesses and policymakers consider how essential companies like Facebook and Google are to the economy.

Businesses, especially, should consider the risks involved, since so many of them depend heavily on just two or three such platforms.    

Let's look at some numbers involved just with Facebook’s family of services.  

According to PIB and the Ministry of Electronics and IT, India had 410 million Facebook users, 530 million WhatsApp users, and 210 million Instagram users as of February this year.

Data from the Telecom Regulatory Authority of India show that the total number of internet users in the country stood at 825.30 million at the end of March 2021. So, that implies just under 50 per cent of India's internet users are also Facebook users. One-fourth of them also use Instagram. And, at least 64 per cent of them are WhatsApp users, too.  

The risks that an outage of services like these poses isn't just about not being able to post your latest selfie or vacation pictures on social media. There may be a deeper problem.

As of April of 2019, an estimated 1.5 million small and medium businesses, or SMBs, from India were reported to be using Facebook in order to reach out to customers. This was just 10 months after Facebook had said in June of 2018 that it had 900,000 SMBs on board from India. That gives a sense of how quickly and by how much that number has been growing.

And, this was before the pandemic pushed a greater number of both consumers and businesses online. According to a recent report, Facebook connected with 9 million Indian small businesses during its outreach programme in 2020.

Instant messaging service WhatsApp's footprint on businesses in the country is even larger. 

In July of 2020, WhatsApp had told news agencies that it had over 50 million users of its business app globally, of whom over 15 million were in India. During the Covid-19 pandemic and the resultant lockdowns, there were a number of reports about how WhatsApp had become a lifeline for many small businesses in the country.

SMBs use these platforms to build a digital presence and reach potential customers. They are also crucial for internal communications and operations. A disruption during business hours, or one that lasts longer than the recent outage, could seriously impact business operations, especially for SMBs.

And beyond business, our reliance on it for basic day-to-day communications makes WhatsApp more akin to a crucial public infrastructure rather than a simple digital service.

These three services which have a very wide presence in the lives of millions of people – Facebook, WhatsApp and Instagram – went down simultaneously. Such outages can have a systemic risk. People across the globe, including policymakers, therefore, might increasingly think whether Facebook and its subsidiaries should be so closely linked together.