Prateek Bhardwaj broke out as a social media star on TikTok, attracting nearly a million followers.
Prateek Bhardwaj broke out as a social media star on TikTok’s short video platform, with nearly a million followers and a slew of endorsements from major brands. But it is no longer in the app.
The 30-year-old from a small town in India defected to Moj, one of the many Google-backed TikTok clones that emerged after New Delhi banned the app from ByteDance Ltd in 2020. in China. He barely missed a beat: his fan base has risen to 3.4 million and the content creator still connects products from Xiaomi phones to Diageo whiskey.
Bhardwaj’s smooth transition highlights the opportunity presented by TikTok’s banishment from the world’s fastest-growing mobile arena. The world leader in short video was dragged into a purge of Chinese apps by India two years ago after a violent border dispute. That gave the impetus for Google’s YouTube Shorts service, Moj, and a slew of other contenders to fill the void. Far from slowing down the growth of social video, TikTok’s abrupt withdrawal has given the segment a boost.
The American giants Meta Platforms Inc. and Alphabet Inc. are now competing for the lead in what promises to be a nearly $20 billion market.
For them, India represents the best growth potential for online video in the world — and the field is wide open. Meta, which already considers India to be its largest Instagram user base at around 400 million, is looking to turn its Reels short video offering into a direct TikTok replacement and bolster it with similar recommendation algorithms. Google, whose YouTube is approaching half a billion Indian users, introduced a TikTok copycat service immediately after the ban, but its local strategy also includes funding and caring for four of the largest homegrown clones: InMobi’s Roposo, DailyHunt’s Josh and ShareChat’s Moj and MX Takatak.
“What has really defined the past two years for us is Reels’ explosive growth on Instagram,” said Ajit Mohan, head of Meta’s India, in an interview at the company’s sprawling headquarters on the outskirts of New Delhi. “Our goal is to bring a big world celebrity out of India, from its small towns. That is our North Star.”
The South Asian nation was TikTok’s largest market — ByteDance offers cousin app Douyin in China — and the ban forced the more than 200 million Indian users to seek alternatives. Bhardwaj, who had quit his prized IT job to hop on the TikTok train, was welcomed on Moj and Instagram when the Chinese service was shut down. Instagram is spending more than $1 billion worldwide, a significant portion of which will be deployed in India, on programs that help creators make money. Google is betting on the local knowledge of operators like Moj.
While taking several courses, the two US companies agree that replacing TikTok should start with recruiting and training Indian-born creators.
“India’s mobile and video usage is one of the biggest opportunities that Google’s $10 billion India Digitization Fund is looking to boost,” said Ajay Vidyasagar, YouTube Regional Director. “Storytelling is an intrinsic part of Indians’ lives, starting with the ancient auditory traditions to today’s many-to-many digital storytelling through channels such as YouTube and short video apps.”
Both Silicon Valley titans are looking at the same price: a short-video app economy expected to generate a staggering $19 billion in revenue by 2030, according to consultancy Redseer. Short video apps could account for as much as 20% of India’s digital advertising market by then, Bangalore-based consultants said, making it an industry that internet companies can’t afford to ignore.
Read more: Facebook needs to fix its TikTok problem
The American duo also want to use India as a testing ground for their algorithms, influencer campaigns and content experiments that can be exported to the US – where an unfettered TikTok wastes their ad revenue models. YouTube Shorts made its global debut in India as a beta service in September 2020, before expanding to the US six months later. Google is now starting to run ads on Shorts while Meta is still struggling to find the right ad format for Reels and maybe hoping to find the solution in India.
“Leading digital media players have clearly shifted their focus on content to short video, a step away from pursuing other opportunities like live cricket,” said Vipin Gupta, managing director at Boston Consulting Group. Google and Meta “invest heavily in Bharat-focused creators – influencers who are local to a region, language, or culture.”
Read more: YouTube starts showing ads on shorts, the TikTok clone
This push to support online creators and social media stars is starting to play an important role in India’s wider entertainment ecosystem. Kabeer Kathpalia, known to his more than 31,000 Instagram followers by the name OAFF, landed a job in film production after his music caught the eye of a director.
“Even in my wildest dreams, I never thought that my videos would lead me to Bollywood,” says 33-year-old Kathpalia. The music maker’s appearances on Instagram paved the way for him to produce the score and songs for a blockbuster hit headlined by Deepika Padukone.
Affordable devices and wireless data will fuel the growth of short video, which is expected to be a regular part of the online diet of 67% of all Indian smartphone users by 2025, doubling its share from 2020, according to Redseer.
To accommodate that growth and keep up with Meta’s spending, the local contenders are also investing heavily. Moj operator ShareChat doubled its losses to $180 million in its fiscal year ending March 2021, spending more to garner its 300 million users who watch 6 billion short videos each month.
Most of the online advertising spend in India still goes to Meta and Google. Both are doing everything they can to protect their share of that revenue, said ShareChat founder Ankush Sachdeva. “When your core is threatened, you invest what it takes.”
Google’s gross advertising revenue in India is about 1.5 times that of Meta’s local unit, although Instagram’s owner is growing much faster in the country. The sale of short video ads is still a small part of the total pie for both.
“Short video is not Google’s only game,” said 29-year-old Sachdeva. “But for Meta, content is bread and butter.”
Instagram is currently leading India’s fledgling short video market with users scattered across noisy, overcrowded cities and idyllic towns. The teams search the platform for promising musicians, dancers or aspiring comedians and train them in audio-video tools and social media trends. Instagram scored twice as many downloads in the first half of this year as two versions of Moj combined on the Google Play Store for Android devices, according to app analytics firm SensorTower.
Meta’s Instagram lite for phones with slower data connections, the move to post some Instagram content to Facebook, and the adoption of a whopping 11 local languages have all helped it move forward. India’s ad revenue grew 41% to 93.3 billion rupees ($1.2 billion) in the fiscal year to the end of March 2021, surpassing the combined ad sales of two of the country’s largest broadcasters.
When TikTok was banned, Sachdeva and two of his classmates from the Indian Institute of Technology Kanpur jumped at the chance. “We loaded like bulls and launched Moj in 30 hours,” Sachdeva said. Their Bangalore-based startup raised $520 million in mid-June from investors including Google and Temasek Holdings Pte, at a valuation of $5 billion.
Moj is designed to present “snackable” content in an infinitely scrolling feed, especially in Indian languages. To bring its technology up to global standards like TikTok’s, the company has assembled an artificial intelligence team with engineers in Bangalore, London and Silicon Valley.
“Unless the AI is world-class, you’re out of the game,” Sachdeva said. Short video will be as ubiquitous on Indian phones as WhatsApp messages are now, he added. Like rivals, Moj tackles the supply side of videos for creators by curating a large number of influencers. It has recently turned its attention to monetization through channels such as virtual gifts and video trading, on top of the traditional ad-based model.
But whoever wins India’s short video war, an American tech company is sure to benefit.
“Content diversity and the ability to target the right users with the right content are key to creating stickiness in short video. In that sense, Meta’s Instagram is much better,” said Vishal Jacob, Chief Digital Officer at media agency Wavemaker India. “But Indian apps are poised to grow and take advantage of Google’s technology and ad expertise.”