TikTok left a hole in India’s net—both Meta and Google want to fill it
Summary
Google is pumping capital into all the promising video bets in the country, hoping at least some of them pan outTikTok’s eviction from India in 2020 left a gaping hole in the country’s fast-growing short-video market—one that Instagram and several homegrown rivals are fighting to fill. Many of these new Indian contenders are being cultivated by another American tech behemoth: Instagram-parent Meta’s rival Google.
Last week, Google participated in a $255 million funding round that valued Mohalla Tech—parent of local language social-media platform ShareChat and short-video app Moj—at $5 billion. Moj is one of India’s largest short-video platforms. Mohalla also counts Temasek and Tiger Global as investors.
At stake is a market of around 240 million monthly active users as of last year, according to a 2021 estimate by Indian consulting firm Redseer. In early 2021, the Indian government said Instagram had 210 million Indian users. Moj, after purchasing rival TakaTak, claims to have a combined monthly active user base of 300 million.
Google-owned YouTube remains the dominant player among longer-video platforms, but the company still needs a success story in the bite-size space. Redseer reckons that the number of short-video viewers could hit 670 million by 2025, becoming the second-largest Indian media audience after television viewers. The consulting firm expects 300 million new Indian internet users will be added by that year.
Google doubled down on India with a $10 billion India Digitization Fund in 2020, the year that the pandemic accelerated the spread of the internet into many new pockets of the country. It was also the year India banned popular Chinese short-video app TikTok—following a bloody border clash with China—and unleashed a wave of copycats. Overnight, there were more than a dozen alternatives, most of which have now pivoted or folded.
Google now appears to be taking a carpet-bombing, or perhaps carpet-fertilizing, approach to its husbandry of the remaining Indian short-video startups. Its other investments in the space include InMobi’s lock-screen product Glance, and VerSe Innovation, parent to another short-video app, Josh. Last year, YouTube also bought a small video-commerce platform called simsim. All this comes despite YouTube’s own short-video feature, Shorts, finding some success in India.
When compared with China, India’s short- and live-video segment is still in its infancy, leaving a lot of room for experiments and mistakes. Investing in a portfolio of local companies that understand the cultural and linguistic quirks of the estimated 640 million Indian internet users, according to Bain & Co, may be a prudent move. And in India, where advertising revenue is small, these startups are testing live shopping, streaming and tipping—all features Instagram Reels has introduced in the U.S. If even one of these companies successfully monetizes their large user bases, Google will have a worthy competitor to Instagram Reels.
According to Rajeev Suri, managing partner at Orios Venture Partners, Google is waiting for these short-video bets to achieve scale and then it may scoop them up for a premium. When Google bought YouTube in 2006, the company was already an immensely popular platform.
The gap left by the departure of Chinese tech giants such as TikTok parent Bytedance has left a lot of real estate for deep-pocketed American tech firms to explore—and also created a huge amount of uncertainty.
It is said that when nothing is sure, everything is possible. For Google, in India’s short-video space, it might just be true.
