Social platforms face challenges in business development in India

Over the past decade, India has become a key focus for many social apps.

As the second most populous country in the world, India itself offers services that allow it to reach more than 1 billion potential new users, and the rapidly evolving digital economy has made social platforms, especially social It can and should bring great potential to the platform. We set up shop on the ground floor and established ourselves as the go-to app.

However, at the same time, the history of intervention and control by the Indian government is limited opportunities for some,on the other hand, The economic status of many Indian citizens is low. In other words, the overall number of users does not have the same meaning in terms of pure revenue.

As such, many platforms have focused on countries, especially in terms of recent user growth, but that growth, while looking great in performance updates, has not translated into comparable business performance.

For some, this is currently proving to be a problem. That’s because while market analysts are happy about the increase in user numbers, without the accompanying expected increase in revenue, those numbers are somewhat hollow and won’t pay off for some time yet.

That’s why Snapchat is now shift focus away from Indiato expand business opportunities in other countries.

Snapchat has added 39 million daily active users over the past year, continuing the app’s steady growth trajectory. But in the US, the company’s main revenue market, his daily viewership is actually down 1%.

So the main graph looks good, but the business impact is not that great.

As explained in snap Performance update for Q4 2023:

“While we believe there is significant long-term potential for community growth in other regions of the world, we are shifting our focus to growing communities in more mature regions such as North America and Europe. Over the past few years, we have driven significant growth in DAU by focusing on Android performance in large emerging markets, including India, and our product experience for communities in North America and Europe. We look forward to building on our momentum in the APAC region as we increase our investments to improve our business.”

It’s a similar story for Meta, which has seen significant growth in India, particularly with WhatsApp, the region’s largest messaging app.

almost WhatsApp has 500 million active users in India, it should bring great earning potential. However, Meta’s performance data shows that the Asia-Pacific region, of which WhatsApp is a part, still lags behind the US and Europe in terms of business value.

Again, India is a developing market and will take time to mature in this regard. Also, given that WhatsApp is a private messaging app, it won’t be easy for Meta to monetize it.

However, this data once again highlights why the sheer number of users in India still only reflects its potential, and in the future, each platform will have considerable time to tap into it. It would be necessary to spend resources.

For some people, it may be too far away to even consider.

At the same time, the Indian government continues to put pressure on social platforms to adhere to increasingly restrictive and onerous rules in order to maintain operations in the country.

For example, Meta is currently in a battle with the Indian government over the future of WhatsApp after Indian authorities introduced new rules that effectively ban encryption on social and messaging apps.

Based on Indian revised version Information technology regulationsall social platforms and messaging services. Need to maintain logs of information about users and their activitiesto enable local authorities to track the originator of content if necessary.

Mehta told the Delhi High Court last week that WhatsApp would be decrypted, which would require the messaging app to be completely withdrawn from the Indian market. Indian authorities are still pushing for changes, but the options presented so far could certainly see Mehta shrinking its presence in India unless the rules change.

X (old Twitter) is also forced Comply with content removal requests from Indian authoritiesTo quell negative feelings towards the government.For the most part, X (and Twitter before it) has complied with these requests, but continues to Please try some Anything that goes beyond local laws.

The risk here is that complying with Indian government pressure in this regard provides social platforms with the means to censor certain speech in line with the government of the day, while dissent could lead to regional This could lead to further regulations.

This adds to the challenge of growing within the Indian market and once again highlights why viewership growth can sometimes belie the promise of future opportunities when viewed from a pure numbers perspective.

Basically, much of the growth in social apps is coming from the Indian market, which has potential for future business. However, since it is not immediately profitable, growth is not as important a metric as you might think.

As such, we expect the focus to shift solely to revenue numbers, as viewer numbers alone mean little without the additional context of when viewers start generating significant revenue on each app.

Growth remains important, especially in the long-term sense. However, this is now a more distant metric, requiring more scrutiny of where exactly downloads are increasing on each platform and what that means for revenue.

At the same time, platforms will increasingly focus their business development efforts on Western markets, potentially creating more opportunities for marketers.