ShareChat co-founder Ankush Sachdeva can be seen pacing about barefoot in his sprawling 2,400 square-foot office in Bengaluru while my Chinese colleague and I wait for him in the lobby.
Soon the company’s co-founder Farid Ahsan exits the lift accompanied by some Chinese gentlemen.
Emboldened by the murmur in the industry, we ask Sachdeva, “Are you in talks with Chinese investors to raise funds?”
“No one wants to leave USD 10 billion on the table just like that. There is a lot of inbound interest from China and we are talking to a lot of investors,” he said.
While the market for social content platforms is huge, no revenue model is in sight yet for these companies.
Helen Wong, partner at Qiming Venture Partners, believes advertising could be one of the obvious revenue models, much like how short video apps monetise in China. “If you can reach a hundred million users, that could be meaningful to advertisers. Then you’re good to go. In China, WeChat has one billion users. So, it’s really about scale,” she said.
ShareChat is one of the most talked about Indian companies in this space. It competes with multiple Chinese short video apps such as ByteDance’s Helo, TikTok, Like, Injoy and Kwai.
ShareChat’s growth can be measured by these numbers provided by the company: every month, over 45 million monthly active users generate more than 30 million posts and share them a billion times on WhatsApp.
“We have seen over time that as long as you have a great product, users are willing to pay for it. Of course, the GDP growth has a lot to do with it,” Wong said.
ByteDance claims to have 300 million active users in India across three platforms: TikTok, Vigo Video and Helo. Media reports say it is soon going to launch a music player in India.
Targeting small towns
If Sachdeva is to be believed, investors tell him he has sowed seeds for a bumper crop.
When they began building ShareChat in 2015, the founders didn’t have the usual club-hopping, coke-sipping, urban youth in mind as users. They were targeting non-English speaking users living in semi-rural, tier-2 to tier-4 cities, who love to spend their time watching funny and inspirational videos on WhatsApp and Facebook.
In a nutshell, ShareChat was created to target users from Bharat, the rural India. While many companies are still making plans to capture this untapped market, ShareChat has made significant inroads.
One can draw parallels with Kuaishou, a China-based company that also targets users from small towns. Sachdeva said it helps that Morningside Ventures, an investor in ShareChat, is invested in Kuaishou too.
“It is a difficult thing to predict what could trend among a billion people. But somebody who's been in the Chinese ecosystem can actually have some hypothesis — to say that given this scenario, this would happen in India. It is helpful that Morningside is one of the early investors in Kuaishou and they have seen the whole journey,” he said.
Initially, most of the content on ShareChat consisted of GIFs and images. Thanks to cheaper internet, users now prefer to consume more videos; and ShareChat is tweaking its algorithm to aid it.
“We do understand that video is going to become more prominent in the future. As the bandwidth becomes better, the world will move towards videos and so will our platform. All platforms that are social will move towards video when the creators feel video is the right way to go,” Sachdeva said.
ShareChat even acquired short video company Clip recently for an undisclosed amount. “There were some synergies and overlap in terms of content with Clip and that is why we acquired it.”
He insisted they won’t be launching a separate app for short videos.
Local and lost in translation
While explaining the type of content their users upload on ShareChat, Sachdeva mentioned the Indian spiritual figure Sai Baba many times, to which my Chinese colleague, after realising she can’t ignore it anymore, asked, “Who Sai Baba?”
This gave Sachdeva a quick way to point out the nitty-gritties Chinese companies may not understand for them to simply copy models and establish roots in smaller Indian towns.
When ByteDance-owned Helo copied ShareChat’s name and design on Google and Apple’s respective app stores in October 31, ShareChat took the matter to court and won.
“The strategy for most copy products is that you aggressively market to scale up. But you don't get organic creators, you get a lot of consumers. You can stay on for the time being, but you don't get people who are attached to the app,” Sachdeva said.
Wong of Qiming Ventures did not dismiss ShareChat’s competition with ByteDance’s Helo and TikTok. “ByteDance is definitely a strong company. Its strength lies in the team, AI and technology they have built around their machine learning. They also have strong ability to attract users.”.
However, she believes ShareChat has been able to innovate faster than TikTok and Helo. “ShareChat has a strength of its own. It has managed to attract a lot of politicians and understands a lot of local news. A Chinese company will take more time to get where ShareChat is.”
Sachdeva said there is bound to be some noise when a new player comes in. “At a fundamental level, first-time internet users have no bias towards joining a Facebook, Instagram, ShareChat or any other platform,” he said.
“Eventually what will happen is they’ll try a bunch of platforms and the best product will win.”
(Ruiyao Luo contributed to this story.)