Sharechat: The social networking platform for BHARAT

It was not a matter of chance but of choice, which led Ankush Sachdev to Cofound the vernacular-focused social networking platform, ShareChat. While still studying in the 4th year at IIT Kanpur, Ankush decided not to take up the swanky jobs in the best tech firms of the world, instead follow his passion for solving a pertinent problem requiring deep tech expertise. This led to the genesis of ShareChat, which had 2 of his seniors, Bhanu Pratap Singh and Farid Ahsan, as fellow co-founders. ShareChat is a customer-generated content material platform in which most of the content material is created by the customers. Like other social networking platforms, it allows users to upload content like photographs & videos, make friends, interact and engage with fellow users, etc.

Courtesy: Forbes India

The Opportunity

In recent times, India has been observing a rampant increase in social media users, which has grown to 518 million in 2020. The country is further expected to touch the 1.5 billion mark by 2040. ShareChat has around 180 million active users and a creators' community of about 50 million. Right after TikTok’s ban, they rolled out its own short video platform Moj. ShareChat believes that it is well-positioned to fill in the gap left behind by TikTok as its content, even before the launch of Moj, was 70% videos. According to the company, ShareChat and Moj have 340 million monthly active users (MAUs) between them.

Differentiating factor

ShareChat differentiates itself by building a vernacular-focused social networking platform, offering a complete consumer experience in 15 local Indian languages. They cater to India's over 1.17 billion internet users, making an average user spend around 31 mins/day. Previously, ShareChat used to hire people for short content development as there was no option for users to develop their own content. In 2016, they pivoted on the user-generated content and added open tagging, permitting users to create their own hashtags. The application also provides health tips, homemade remedies, weight loss, religious quotes, dictionaries, etc., for its customers (feed ranking being their core competency). In 2018, it launched quite a few exciting features under ShareChat Talkies, like anonymous chat options direct messaging, naming a few. Other exciting and newly launched features include:

● “Shake-N-Chat” which randomly connects two or more users engaging with content from creatively similar genres over a personal chat.

● “Private Messaging” is designed to encourage the users to opt for one-to-one communication in the versatile Indian languages.

● “Open tagging” is the feature that allows the users to create tags and post relevant content under these specific user-generated tags.

Revenue and Business Model

ShareChat, like any other customer-generated content material platform, makes money via advertisement, payment transactions, and sponsored campaigns. It currently has more than 100 million downloads in the Google PlayStore, and the startup is reportedly valued at $3.7bn. On average, around 5 million content pieces get shared every day on their platform. ShareChat has started focusing on Sales and Marketing (S&M) extensively in recent times, which is evident from the fact that around 95% of the earnings through operation (Rs.9.4 Cr) in FY20 happened through S&M. The rest, 4.1%, was collections from its social commerce platform – Elanic – acquired in February last year.

Creator’s monetization

“Virtual gifting via Audio rooms” on ShareChat is big and growing fast, enabling brands to be connected with the influencers. Creators can advertise for the brands and share them on Moj, making social commerce a big thing going forward. The recent partnership with the marketplace giant Flipkart has provided Moj with the necessary ammunition to scale. Moj users will now be able to buy tagged Flipkart marketplace products directly from the video screen through the newly introduced ‘buy now’ button, enabling targeted purchases. This feature will work during the live streaming sessions as well, and the startup feels that fashion and cosmetics will be the game changer categories for venturing into social commerce.

Few Impediments going forward

The biggest challenge that ShareChat might face is expanding to other geographies in Asia or the west. The extensive focus on Indian vernacular (which is an important reason for their success), might also become a major roadblock in scaling beyond the borders. To cover a global population, they need to bring in a different segment into their platform so that the interface can be globally relatable. Another headwind might be the startup's vision, where it wants to compete with the Reels, which is merely a feature on Instagram. Competing with a giant might create a scalability issue comparatively, as there has also been a drop in the viewer stickiness to a particular video. ShareChat has to come up with some other features to tackle this.

Existing Competition and future prospects

ShareChat has been facing some competition from the counterparts like Josh, Chingari, Roposo, etc. But with the extensively raised funding last year, they have developed a substantial war chest against other players. Now it is competing directly with Instagram from the Meta group. The fight is to capture the maximum screen time in the short video entertainment space, and hence burning cash becomes necessary against the trillion-dollar incumbent.

The company has raised a total of around $1.77bn from various investment giants, including Tiger Global, Temasek, Twitter Ventures, etc. In the coming future, ShareChat wants to bring major changes in the application, primarily focusing on the content creators, so that users can experience a wide variety of content formats. With the recent long-term contract with the music production giant T-Series, the unicorn expects many creators to transform into celebrities. India has 22 official languages and more than 1600 known dialects; hence ShareChat wants to go further deep into the regional audiences.

Written by - Sanath Raghul, Ashwin Ambala