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Remote Indian Cities Attract Chinese Short Video Platforms

Chinese video apps such as Kwai, Vigo Video, TikTok, etc. have launched in India in the past two years. Tencent-backed, short video app Kwai, that claims 15,000 video uploads a day globally, launched India operations in April this year.

Nov 5, 2018 by Avanish Tiwary
Remote Indian Cities Attract Chinese Short Video Platforms

In Khaira, a village 150 kilometres from Patna, 16-year-old Milan Kumari unlocks her smartphone first thing in the morning and opens Kwai, a Beijing-based app that lets her create short videos and share it with friends. After several re-takes, her 40-seconds long video in which she lip-sings her favourite Bhojpuri song, is ready to share on her family and friends’ WhatsApp group and other social media platforms.

“Out of 10 videos that I shoot in a day, I share only 2-3 on social media. I like to enact funny scenes from Bollywood films and singing to a song that I like,” Kumari said.

She is not alone in her village to use such an app, and Kwai is not the only video-app on her phone. There are around five such apps, which she uses alternatively depending on her mood and need. Most of the videos that teens create on apps such as Kwai, Musical.ly, ShareChat etc are short 30-120 seconds videos—one of the main reasons of its quick adaptability and high demand.

“It’s because they are short, they are easy to consume. It’s like sending an emoji. If we have audio emojis, it has to be short. If they are long people may not use them,” said Abhilash Inumella, CEO, Samosa Labs. The Bangalore-based startup after spending around two years on operating a chat entertainment platform, veered into video-based content earlier this year.

A 2018 report by Cheetah Labs on India’s entertainment market, said, “Localised content speaking different dialects may bring growth momentum for the short video segment, and short videos can become the next hit for India’s mobile internet industry.”

The other reason for the popularity of these video-apps is the sheer ease with which these let users shoot videos, pictures and edit them. The availability of price sensitive smartphones and cheaper high-speed internet also helped the increasing usage of entertainment apps. When Reliance launched Jio in September 2016 offering dirt-cheap internet connection and free voice calls it democratised internet in the country.

A report by digital content creation platform Hot Star said India’s online video consumption grew five times in 2017. The driver of this growth came from small cities, the report said.

“An audio-visual medium is always more attractive and allows greater retention, even among the literate. With increasing penetration of mobile phones, more people who have not been to school or have dropped out of school are watching videos for entertainment, educational and awareness purposes,” said Osama Manzar, founder, Digital Empowerment Foundation (DEF). DEF is a Delhi-based not-for-profit organisation that works towards bridging the digital divide.

China too wants a slice of Indian market

Statistics from Google showed that 87% of Indian netizens watch short videos on phones every day.

“By 2020, 80% of the internet content will be short videos,” it said.

With the Indian video consumption market growing and Chinese companies that have already proved their potential in their home turf, a handful of Chinese players are eyeing the Indian market to target the next generation of internet users.

Chinese video-apps such as Kwai, Vigo Video, TikTok, etc. have launched in India in the past two years. Tencent backed, short-video app Kwai, that claims 15,000 video uploads a day globally, launched India operations in April this year.

“We are targeting users between 13 and 45 years who live in tier 1 to 4 cities. India is one of the fastest-growing countries in mobile internet and smart phones with rapid economic development. With the rich culture, big population and diverse lifestyle in India, we see great potential for Kwai to grow in the India market,” a Kwai spokesperson said in an email interview.

Shanghai-based content creator Bytedance, which acquired one of the largest video-app Musical.ly last year, has also created its footprint in the Indian market with two such video-apps: TikTok and Helo.

The Cheetah report cited above said, “China’s video and short video segments are so mature that some sub-segments and vertical players have started emerging, including Meipai, a video platform with flattering filters, and music-oriented social app Tik Tok.”

Due to the high demand and quick uptake, Tencent, Alibaba and Baidu, the three Chinese internet giants have shown interest in short video platforms. In the first half of 2017, Tencent spent USD 350 million in Kwai, while Alibaba said it will transform its video-streaming site Tudou into a platform for short videos. In April this year, China’s largest search engine Baidu took part in a USD 98 million investment in a video news platform Pear Video. The investment was led by Tencent.

The short video industry has even begun to expand its scope and discover new horizons in seemingly unrelated areas in China. The Passage had recently reported how tech giants like Tencent and Alibaba have begun to launch dedicated short video platforms to boost their retail prospects in the country.

According to the Cheetah report there is quite a gap between the Indian short video market and its Chinese counterpart. “Big platforms will have bigger chances taking pre-emptive moves in the segment because they know the Indian culture well,” it said.

“Chinese app startups are front-runners of OTT (over the top) video and the content market as they’ve already experienced such a transformation in their home country,” said Hanish Bhatia, senior analyst, IoT and mobility at Counterpoint Research.

Despite their experience with short video, when it comes to creating content for the Indian market, the Chinese players will have to improvise.

“These Chinese startups are well aware of the fact that video and short content production is not their core competency for a country like India, primarily due to the cultural barrier and insufficient control of the content industry value chain,” he adds.

Rising VC interest in video apps

Late last year Bengaluru-based video sharing startup Clip India raised USD 6 million in its Series A round led by Matrix Partners India, Shunwei Capital and India Quotient. Shanghai-based VC firm Shunwei Capital, along with Chinese smartphone manufacturer Xiaomi led USD 18 million round of funding in ShareChat, a Bangalore headquartered content creation company.

In August this year, Samosa Labs also raised USD 7 million from Xiaomi and VC firm Sequoia Capital.

“We had 100,000 users a month and that is when Sequoia approached. Even though they spoke to us before, once we gained traction and announced a round of funding, they approached us again for a seed round,” Inumella of Samosa Labs said.

Investors including big media companies don’t want to miss out on the short video market, touted as the next big thing. Three-months ago Times Group’s digital arm Times Internet bought the Korean video playing app MX Player reportedly for USD 140 million.

A Techcrunch article said Times Internet will introduce a streaming content service to MX Player users before August. It wants to introduce at least 20 original shows and more 50,000 content across multiple local languages in India during the first year.

People in the industry swear by the potential Indian market has for original content. According to Inumella, the market is so huge that the combined reach of all players is only in single digit. He claims more than 60% of users on Samosa Labs are from tier 2 and tier 3 cities.

DEF founder Manzar, who spends most of his time visiting rural India, said the demand for local content which has been missing from the Internet till now is very high in smaller cities.

“There is a great requirement to ensure that people who are getting online for the first time, are getting online as content producers and not just content consumers,” Manzar said.

Avanish Tiwary

Avanish Tiwary is a Bangalore-based tech journalist. He focuses on emerging Indian startups and unicorns. He can be reached at avanish.tiwary@thepassage.cc.

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