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Mobile Start-Up Guide to Chat App Development

September 12, 2018 Written by Andrei Klubnikin, Senior Content Manager
By 2019, 80.7% of smartphone owners - and that’s 2.18 billion people! – will be active messenger users. Although the global messaging application market largely belongs to Facebook, Viber and Telegram, many techpreneurs believe it’s still full of untapped opportunities. How to create a chat application & what’s it going to cost you? What monetization strategy should mobile start-ups opt for to increase their investment return? These are just a few questions we’ll address in our new blog post!

4 Steps to Create a Chat Application that will Stun Users

Market Analysis

Obviously, you should start with a thorough market research which includes target audience and competitor analysis. What are the most popular chat apps right now? Geographically, messengers’ popularity varies from country to country. While Facebook Messenger is the #1 chat app in the United States, Australia, Scandinavia and several mainland Europe countries, the emerging countries which display the biggest growth in terms of app downloads and usage are totally dominated by WhatsApp. WeChat, the third most frequently used messenger, remains a purely Chinese phenomenon, while Line and Telegram enjoy considerable popularity in Asian countries.
Despite heavy competition, there’s still a chance of success in the crowded market: you only need to go niche and think of a feature that would make your application different from the rest (something like Telegram’s privacy policy or WeChat business accounts would do).

Business Model Development

You need a flexible monetization strategy to justify Android and iPhone application development and marketing expenses. With the exception of WhatsApp and Telegram, popular messengers make use of one or several monetization models; most often it’s the combination of in-app purchases, advertising and affiliate sales.

Take a closer look at your competitors’ business models to choose the right approach for your start-up:

  • Facebook Messenger. The world’s leading messaging app makes money through its business-focused chatbot platform which is a home to over 100 thousand brand bots, image-based ads and paid messages (this applies to business Messenger accounts only).
  • WhatsApp. In its early days WhatsApp used to be a subscription-based app; it cost users $1 per year or was available for free for the first year of ownership and $1 per year afterwards. In 2016 WhatsApp got rid of annual payments, and is currently testing its Android-only business application which offers advanced tools helping companies reach out to their customers via the messenger. Having said that, Facebook Messenger and WhatsApp (which have over 2.3 billion users combined) aren’t likely to generate significant revenue until 2022.
  • WeChat. Unlike WhatsApp, the Chinese monster of an app is trying to do everything. It offers money transfer options. And sells games and sticker packs. You can hail a taxi, book a hotel room and order food from inside the app. And yes, WeChat is full of ads and chatbots. No one knows for sure how much money the application makes, but it could be worth over $80 billion.
  • Telegram. Launched in 2013, the app has over 100 million registered users and is largely supported by businesses and individuals who share the company’s vision, thus remaining free to use. However, it has a large network of Telegram-based apps, bots and products (including stickers). At some point, the Durov brothers might want to exploit the assets to make profit.
  • Viber. Pretty much like its competitors, Viber is monetized through ads, sticker packages and via call termination. In 2017, the messenger also unveiled a shopping platform similar to that of WeChat.
All in all, it’s extremely hard to make money on messengers; it’ll probably take you years to build a solid user base and – hopefully! – get acquired by some telecommunication or social media company. The primary reason to create a chat app, however, is the continuous access to user data which can then be used for marketing purposes. With the exception of WhatsApp and Telegram, popular messengers make use of one or several monetization models; most often it’s the combination of in-app purchases, advertising and affiliate sales.

Feature Set Optimization

As you can see, there’s more to modern messaging apps than texting. Facebook Messenger, WhatsApp and Telegram provide rich functionality including channels, group chats, file sharing, voice calls and AI-powered chatbots. WeChat has evolved into a promising e-commerce platform; roughly 30% of its users have credit cards attached to their accounts and make purchases via the app.
What’s the optimum feature set for a new chat application?
There’s no definite answer to that; it is safe to say, however, that all messengers are slowly moving into the social commerce segment. Considering the fact that shopping applications saw a 54% growth in usage last year, it may be the future of messengers.
Have any questions? Ask our team!

Here’s a list of features which popular messaging apps use:

  • Authorization (via email, social media account or phone number; popular apps like WhatsApp implement two-factor authentication, thus forcing mobile users to verify their phone numbers and enter six-digit passwords).
  • User account (the feature provides an opportunity to set up profile picture, add personal and payment data, manage settings and invite users).
  • Business account (as with user profiles, businesses can add company description, specify contact data and add pictures; furthermore, the module might enable users to track the number of sent messages and delivery/read status).
  • Admin account (the feature is, for example, enabled in group chats in Telegram).
  • Live chat (normally requires connection to the Internet; WhatsApp and WeChat allow users to queue up messages in offline mode which can be pretty convenient).
  • File sharing (photos, videos, audio, gifs, stickers – that’s what makes messengers enjoyable).
  • Group chats (with baked-in file sharing; if you want to implement the secret chat feature, you should also enable users to set a timer for their messages so that the conversations will be automatically deleted after reading).
  • Channels (which, among other things, let users send links to articles and videos and view them instantly).
  • Chatbots & bot platform (although chatbots have not lived up to the hype yet, some prominent e-commerce brands like Sephora and H&M do trust basic customer service tasks to the lightweight AI assistants which should, nevertheless, connect customers to a human support specialist once they run out of answers).
  • Push notifications (it is important to keep users informed of new messages, incoming calls, app updates, attempts to take a screenshot of a conversation, etc.; in order to create the ultimate app experience, you should let users restrict the number of notifications they’d like to receive, though).
  • Search (the feature enables users to quickly browse through conversation history and media files).
  • Video/voice calls & voice messages (messengers with multiple communication options tend to have higher retention and engagement rates).
  • Payments & money transfer (in case your business model is more e-commerce than advertising).
  • Geolocation (users might want to share their location with contacts; the feature is supported by several popular chat apps including Facebook Messenger and Telegram).
Furthermore, you should not forget about data encryption. One of the reasons why Telegram is booming is Pavel Durov’s proprietary data encryption protocol and focus on privacy.

Keeping it simple is the best way to create a consistent user experience!

Flexible Approach to Chat App Development

There are several things your start-up should consider before getting in touch with a reliable software development company:

  • What’s your target platform? Depending on your target market, you should opt for iOS, Android or both.
  • What technology stack are you going to implement? Popular messaging applications offer open-source APIs, libraries and protocols and even allow third-party developers to monetize apps built with their code. Google and Apple provide plenty of SDKs and frameworks supporting rapid messenger app development, too. Your application will also need a scalable cloud-based infrastructure enabling secure messaging and data storage.
  • What’s the best approach to mobile app design? When it comes to messengers’ UI and UX design, there’s only one rule: the simpler the better. If you want to sell custom sticker packages though, you should spare no effort to find talented designers.
There’s one more question left: how much does it cost to make a chat app?
Obviously, it depends on the number and complexity of features it will support – and if you look up to your rivals like Viber or WhatsApp, you’ll realize building a messenger is a never-ending process, so you’ll need millions to bring your idea to life.
What IS possible, though, is to start with a Minimum Viable Product (MVP) version of a chat app supporting text messages, file sharing and voice calls and expand its feature set later on. If you hire a US-based team of developers and designers, it will take you about 6 months and $300 thousand; mind that you can always reduce app development costs by outsourcing the job to a vendor with offshore development facilities.
Feel free to contact our mobile development experts to discuss your project in detail!

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