BackHike posts 67% slump in FY17 sales
Hike sales dropped to Rs11.4 crore from Rs35 crore in the previous year, while net loss was Rs216 crore, little changed from Rs217.3 crore previously
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New Delhi: Indian messaging app Hike, backed by China’s Tencent Holdings Ltd, posted a 67% year-on-year decline in sales for the financial year 2016-17, although its net loss remained largely unchanged, according to documents accessed from company research platform Tofler.
Sales dropped to Rs11.4 crore from Rs35 crore in the previous year, while net loss was Rs216 crore, little changed from Rs217.3 crore.
The sales numbers suggest a tepid response to the company’s advertising services using branded stickers.
Hike boasts of a wide range of stickers, which it uses as virtual properties for advertising by brands.
The company’s other source of revenue is selling promotional coupons from popular food chains like Café Coffee Day, Pizza Hut and Domino’s, among others.
It is not uncommon for messaging apps to post little, or hardly any sales. The core strength of a messaging service is gauged from the number of users it has. Hike claims over 100 million downloads, but hasn’t revealed the number of monthly active users.
The world’s largest messaging app, WhatsApp, with its billion daily active users worldwide, has not monetized the service so far. According to a September blogpost by the Facebook-owned company, it is now exploring ways to provide messaging services for businesses to talk to their customers and might charge corporate entities a fee for this.
Hike’s plans are slightly different. In an interview to Mint in June, founder and chief executive Kavin Mittal said he sees the future of Hike as a platform where users may like to pay for virtual commodities such as gift cards.
In June, Hike also rolled out payment services on its platform, opening a new stream of revenue through potential merchant tie-ups.
Earlier this week, it said the app had hit a milestone of five million monthly transactions.
In the last financial year, the company posted Rs227.4 crore in expenses, lower than Rs252.3 crore in the previous year. Employee expenses swelled 56% to Rs92 crore.
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