This Is The $1.4B Indian Chat App Challenging WhatsApp In India

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TEI Team

Mark Zuckerberg, the founder of Facebook, recently stated that rather than just being used for personal communication, WhatsApp is a “great channel” to have interaction with businesses. As the Mountain View, the California-headquartered company took a decision to launch video calls on Whatsapp, it took a giant step towards fulfilling demands of its customers in India, its largest market with 160 million monthly active users, accounting for 16% of its total user base in the world.

Users in India are communicating via WhatsApp not just to stay in touch with family and friends, but also as a business tool for founders to keep track of daily operations. OYO Rooms, a hotel room aggregator has operations in over 100 cities; its founder Ritesh Agarwal has a WhatsApp group for every city to stay in touch with his sales and operation executives.

As the chat app is available in 10 local languages, its usage has even increased in Tier 2 cities and rural areas, where farmers have groups to share agri-price and weather updates. But in its largest market despite stepping up its efforts to sustain, increase and diversify its user base, Whatsapp is facing stiff competition from unicorn Hike Messenger, founded by Kavin Mittal, son of Sunil Mittal, chairman of India’s largest Cellular operator Bharti Enterprises.

Hike was founded in 2012 and has successfully raised $175 million in a fresh round of funding led by Tencent Holdings and Foxconn Technology Group in August this year, thereby joining the coveted unicorn club of startups in India with a valuation of almost $1.4 billion. This messaging app has been the fastest of the pack to reach the milestone, in just about three and half years after its launch. It took e-commerce major Flipkart five years, rival Snapdeal seven years and analytics firm Mu Sigma nine years to become unicorns. The hike is also, however, the lone company in the unicorn pack that is free and has no revenue to show. What it has, apart from the dizzy valuation, is a 100 million user base that sends more than 1 billion messages a day.

Arpan Sheth, partner, Bain & Company, says there are credible benchmarks like WeChat, SnapChat, and Twitter to compare (with Hike). “With 120-150 minutes per user per week, Hike has created stickiness. In this business, the challenge is creating high levels of engagement and Hike has shown that promise.”

Initially, Hike’s early users flocked in from Germany and the Middle East, attracted by the security that the platform offered. According to its founder Kavin Mittal: “We built 128-bit encryption over Wi-Fi. Germans are paranoid about security and they simply loved it. We had a few lakh users, but none in India.”

Gradually, however, due to aggressive branding and distinct features that aren’t present on WhatsApp, Hike has reached a position where 95% of its users are based in its parent country – India. What’s making Hike so appealing to Indian users? Its distinct features include sending offline messages, a hidden mode, stickers and multilingual user interface.

Offline Messages

As this messaging app has been built with data constraints in mind, users can send messages without an internet connection. They can even chat if they are offline. This feature has been useful in conditions that exist in India, where internet penetration is not very high and speed of internet is slow in comparison to developed economies. This instant messenger provides the facility of free messaging to non-Hike numbers too. Although these messages are limited in a month they can be extended with user activity incentives.

Stickers, Stories and Live Filters

A feature very similar to Snapchat, “Stories” lets users share their daily lives with their friends through photos and videos. These stories vanish 48 hours after being posted, and similarly to Snapchat, allows users to see who has viewed their story as well as offering specialized filters for photos and videos. Hike has 12 live filters, including one that changes a user’s face to Indian PM Narendra Modi. Its content includes 10,000+ stickers in 40 languages, themes with a multilingual user interface and an AI bot named Natasha that interacts with users.

Hidden Mode and Two Way Wallpaper Theme

“Hidden mode” allows Hike users to have conversations that can only be opened with a password, while the less practical “two-way wallpaper” feature allows users to live to change the wallpaper in a chat.

Unlike Whatsapp, which is attempting to cater to the masses, Hike is a platform for the “meaningful data consumers,” who will end up paying to use Hike features by the year 2020. There are 200 million active internet users in India, of which just 15% are using meaningful data (more than 0.5 GB), 35% use sachet packs and 35% are accidental users (log on only with Wi-Fi). “So you have just 30-40 million meaningful users; this mix has to get better — to at least 70% meaningful users,” says founder Mittal. “In the U.S, the average usage is 4gb per person per month. In India it is less than 0.5 GB; lots of people use less than 10 MB a month! You can’t send photos and download videos with that.”

In its efforts to scale up, Hike is betting on its strategic investors sharing their knowledge and experience in helping to grow this platform. As Foxconn, one of its investors expands manufacturing by setting up seven factories in India, Hike could be bundled in the bouquet of apps on Android smartphones that it manufactures in India. Tencent could help Hike become a full-service mobile platform, much like WeChat which allows users to send messages, book cabs, make payments or buy daily products. As WeChat has been unable to make inroads in India, Hike is the big India bet for Tencent and is the testament to the fact that the global playground is steadily shifting to India.

While WhatsApp is clearly dominating global instant messenger market at present, with more than 100 million registered users, an influential founder, a good branding and strategic relationships with established names in the world market – Hike is turning out to be a rare and successful standout product from the Indian startup ecosystem. In the years to come, it will definitely be adding its weight to the list of global prominent names that includes Line in Japan, Kakao in Korea and WeChat in China.

 

Source: forbes.com