Why Indian short video apps have pivoted, merged or simply disappeared?

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Today’s Publisher’s Parmesan talks about why have Indian short video apps undergone significant changes, such as pivoting their strategies, merging with other platforms, or even disappearing altogether.

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Why Indian short video apps have pivoted, merged or simply disappeared?

These apps shifted their focus to India after the TikTok ban, as they saw a great opportunity in the market. The initial spike in the user base in these apps was primarily driven by their aggressive paid-marketing activities, which helped them gain traction quickly. However, as time went on, Reels and Shorts emerged as better alternatives to these apps, offering users a more seamless and engaging experience.

In the tech world, three years can seem like a very long time, especially when an app can get 100 million sign-ups in just five days.

On June 29, 2020, TikTok, a popular Chinese app for sharing short videos, was banned in India due to worries about national security. Over the next few months, several new apps were created and funded by venture capitalists to replace ByteDance's main platform in India. India was the largest market for ByteDance with 200 million active users.

They copied ByteDance's strategy and paid famous people and creators to join and share content on their apps.

Three years after they vociferously claimed to build a TikTok for Bharat, a significant number of these short video apps have undergone transformations, mergers, or even vanished altogether. Notably, their average monthly active users (MAUs) have experienced a decline year-on-year, paralleled by a decrease in app installs. Consequently, advertisers have displayed hesitancy in incorporating these apps into their digital media strategies, resulting in a substantial 70% decrease since 2021, as reported by media agencies.

Among the major players from India, MX TakaTak was acquired by ShareChat for its own TikTok-like app called Moj in February 2022.

Mitron TV's website no longer exists and its social media profiles were last updated in 2021. Trell had to let go of about 90% of its employees last year due to a financial investigation. Chingari was recently in the news for supposedly transitioning to live-streaming adult content, which is its main way of making money along with live audio rooms. Apps like Tiki from Singapore and Zili from Xiaomi have also closed down recently.

Moj and Josh are still working on creating a version of TikTok for India. Moj claims that in 2023, it had 160 million monthly active users. They claim to have changed their approach to gaining users. Instead of aggressively paying for users, they now focus on getting users naturally and keeping them engaged. However, experts doubt the numbers being quoted by these players.

So, how should one think about this? Do these apps still have potential?

Some might argue that it is too soon to judge if these TikTok imitators will be successful because most of them have only been in business for less than three years. The original Chinese app took almost five years to become popular in India. ByteDance gradually became a big player in short video sharing. On the other hand, many of these new apps started with a lot of funding and boasted about having millions of user downloads.

The truth is that many short video apps initially gained a lot of users through paid marketing. However, this changed when investors began asking for profits during the funding winter. As a result, these apps had to shift their focus from getting more downloads to generating revenue.

Additionally, the content quality started to decline and brands became cautious about advertising alongside such content. Some concerns were raised about these apps, but it seemed like they had limited options. If they had improved their content moderation, they might have lost their user base. Furthermore, these apps had lower video completion rates compared to competitors like Reels and Shorts, even though they charged higher prices for impressions.

In addition, TikTok was very helpful in promoting music, especially regional music. However, other similar apps don't always have the same level of success. These short video apps generate income for music labels because they have to pay to use their songs in user-generated videos. However, the amount of money they pay for licensing has decreased by about 45% compared to 2021. Many of these apps haven't obtained licenses from every music label because usage and business models are always changing.

So, it seems like the party is over. Huh?

Apart from TikTok, there are around 438 active social platforms worldwide for sharing short videos, according to Tracxn. More than 50 of them have received financial support, raising a total of $6.95 billion. About six of these platforms were created in India approximately three years ago.

Their opportunity was clear. TikTok made it possible for non-urban and non-elite Indians to become popular and gain attention from people in tier 2 and 3 cities. This led advertisers to focus their advertising efforts on TikTok to reach a wider regional audience. However, when the app was banned, other similar apps hoped to attract the same audience and advertisers.

Where did they go wrong?

To grow your user base, you need to retain users effectively, which requires investing money and time in hiring talented individuals. Additionally, gathering data from users requires extensive marketing efforts. If you believed that you could keep and convert users after 20-30 million downloads, following TikTok's disappearance, that was an unrealistic expectation.

Moreover, creators on payroll made the process of creating and uploading videos very transactional in the apps that grew after TikTok was banned. ByteDance also paid online celebrities to create content, but they preferred to stay on TikTok rather than wait for their contracts to end.

Many of the newer platforms failed to address the issue of creativity. Instead, they treated creators as mere statistics instead of recognizing their potential as sources of innovative concepts. Furthermore, creators who exclusively partnered with these apps were able to post on international competitors but not on domestic ones.

Had it been exclusive, people would have gravitated towards the new app for a creator they liked. However, since Instagram also offers that content, people can access it there instead. The nobody-to-somebody pipeline was strong with TikTok but not with these apps.

However, these apps might still have a chance if they concentrate on enhancing recommendation systems and supporting new creators. Some of the apps have already revealed plans for creator tools and offline events to connect with brands and content creators.

However, some people are still unsure if they can do well in a complicated market like India. TikTok's algorithm showed tier-2 and -3 India the best content from around the world, which attracted many people who admired Western culture and lifestyle.

With the homegrown alternatives, that access and opportunity was gone so it was natural for many to gravitate to the next best option in Reels and then Shorts.

These players kept harping on the idea of making a Bharat app. What they didn’t realise was that maybe we didn’t need a Bharat app. We needed to figure out what Bharat needs in that app.

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