There are many successful Indian equivalents of foreign internet businesses in several segments such as E-commerce, Food delivery, Mobility, Fintech, Healthtec, Edutech, Q-commerce and many more.
What then could be the issue with India’s homegrown social media apps. Why have they underperformed or disappeared? What is it about Indian social media platforms that tires out users in just a few years or sometimes even in just a couple of months? Why is it that India’s Facebook is still Facebook (China’s is Weibo), India’s WhatsApp is still WhatsApp (China’s is Wechat), India’s Instagram is still Instagram (China’s is TikTok), and India’s Twitter is still Twitter…..
Social media’s challenge very obviously begins with scale. There is no denying the fact that India has scale as a big plus. 1.4 billion population. 931 million smartphone users. 759 million internet users, out of which 360 million are urban internet users. So, clearly scale is a huge advantage. Then comes the cost challenge, where these apps end up spending disproportionately higher on acquisition and retention of users, marketing and promotions and creator payouts. Earnings take a much longer time to come in.
In the last two years, like many other parts of the world, India too has experienced a funding winter. Many of the homegrown social media apps like Koo, Vocal, Leher, Hike have had to sacrifice growth for the sake of sustainability. And once the spending on user acquisition and retention dried up, so did the new downloads, the app engagement, and the advertiser interest. And if there is no sustained growth, reaching the stage of IPO for social media startups is a long way off. The likes of Facebook, Instagram, Whatsapp, and even WeChat are all built at a large and respectable scale upwards of 500 million monthly active users. TitTok, for instance, has 1.54 billion monthly active users globally. Facebook has 3 billion, youtube has 2.5 billion, Instagram and whatsapp have 2 billion each.
Having this size of a base is very important to drive efficiency in this business. Why? Because in social media, there’s only an ad-based model which can generate revenues. But then again, a much smaller country like Indonesia has successfully created its own TikTok equivalent called Tokopedia. Tokopedia’s success made TikTok buy out a majority stake in the platform. Facebook and Instagram have been confirmed to be the social media platforms that are generating the most money. Social media is no more for fun or entertainment. A lot of content creators have built their brands on social media platforms and are earning money from them, so that is why social media platforms need to be lucrative to attract users, brands, influencers and creators.
Let’s look at the Indian TikTok ban in 2020. It was wonderful to see Chingari, Moj, Josh, MX TakaTak, Trell, Roposo, and many equivalents arise in India. Then Instagram released Instagram reels and youtube released youtube shorts. They were able to offer a better user experience, bigger bucks to the creators. This led to every Indian TikTok equivalent slowing down drastically. Which then brings us to the UX and UI part of it. The global social media giants always enjoy an edge. To further compound the issue, every global social media platform that operates in India today comes with a multilingual component and a large number of regional language influencers and users. This does not give any additional edge to the core product proposition of the homegrown apps. From my limited study of the most money generating platforms, the social media platform that pays the most money to content creators is the one that makes the least money among the above-mentioned social media platforms. Yes, research has proven TikTok to be the social media platform that pays the most, followed by YouTube, Facebook and then Instagram. Which brings us back to the moot point – when there is such phenomenal success in ecommerce, food delivery, mobility, fintech and many more……..what’s missing in the Indian-created social media space? It is important to note that a lot of global social media apps are now generating or influencing significant ecommerce business volumes. Influencers and merchants are now showing everything from beauty and fashion products to home appliances to help users make purchases in real time. And business via these platforms is only going to increase. The funding climate has begun to get better, and Indian expertise is more than adequate to create great product innovation excellence. It’s about time an Indian social media app becomes a national, then a regional, and finally a global brand. I do have some thoughts and ideas which I intend to share in one of my future articles.
Read more at: https://cxotoday.com/story/challenges-and-opportunities-the-struggle-of-indian-social-media-platforms-to-compete-globally/