Tipping, live shopping to aid short video apps

MUMBAI: Indians not amenable to paying for content may have upended the plans of over-the-top (OTT) streaming platforms here, but the foreign short-format video (SFV) apps (Instagram Reels, YouTube Shorts) or the local ones like Moj, Josh, Chingari etc are not complaining. With a volume of consumers turning to these 30- to 90-second free videos, they are exploring options to monetize the enthusiasm of millions of eyeballs.
A consumer survey by Redseer Strategy Consultants has shown an increased addiction to short-form videos among Indians — 71% of respondents said they end up watching more SFV than they had planned to while 64% said they turned to them over the last six months.
Though Instagram and YouTube are market leaders having captured the largest chunk of digital advertising and influencer marketing share, Redseer says there is hope for homegrown apps, too. By pushing out regional language content and onboarding content creators from small towns, the local Indian apps have seen their users swell.
India has 830 million Internet users and 680 million smartphone users. The number of social media and short-form video app users stands at 470 million. Of these, 250 million are also using the homegrown short-format video apps and spending an average of 45 minutes a day on them; more than 60% come from middle to high income households.
Mukesh Kumar, associate partner at Redseer, who tracks platforms like Moj, Chingari, Josh etc, which launched after TikTok and other Chinese apps were banned, says local apps user base may have stabilized but the engagement is growing. “Increase in the number of influencer live streams and special interest communities, and creators experimenting with fresh content like audio series are pushing up time spent on these apps. Like global players, their genre range includes motivation, fitness, fashion, music, art and comedy,” says Kumar.
Ambika Sharma, founder of digital agency Pulp Strategy says though Instagram and YouTube are still a priority for brands, some funds do go to others. “The audience size and set decides budgets. The local players don’t have scale yet,” she says.
For others, a user base of 250 million is large enough. Brand strategist and marketing transformation advisor Shan Jain says brands associating with the local apps cut across size and categories. “While Shorts and Reels are the large platforms for frequency and reach, for “desi tadka” and a certain kind of micro-influencers, you use the local apps. Even prestigious beauty brands do demo videos here with local influencers with high engagement rates,” she says.
Users and influencers on these apps are regional, often coming from non-English speaking small towns.
According to Redseer, in FY 2024, the Indian SFV platforms generated $95-100 million in ad revenue. They contribute 1-2% of overall digital ad spend – the share will grow if they improve their ad products to include performance marketing. Redseer expects SFV apps to improve monetization from live commerce and tipping.
So, what is virtual tipping? It simply means, if a viewer likes an influencer’s content, he or she can tip that person in the form of a coin or badge which is priced as low as ₹20-30. The platform keeps a percentage of this and gives the rest to the content creator.
An active painter community created by an Indian paints brand on a local app which fetches a particular painter good tips for his popular content, says Jain. “Popular astrologers and tarot card readers get tips, too,” she adds. Currently only 4% of users tip but Redseer sees this growing. Virtual tipping will reach $700-800 million by FY29, with users currently spending about ₹100 per month on the local apps, it says.
Video commerce, too, is poised to hit $5 billion by FY29, the Redseer report says. In China, video commerce via short-form videos accounts for 20-25% of e-commerce. With Indians spending nearly four hours on their mobiles, 80% short-video viewers shopping online and 45% paying for OTT and games, we will get there soon.
A 2024 report on digital advertising by Dentsu says social media accounts for the largest share of spends at 30% followed by online video which is currently dominated by short-video formats and live streaming. This is expected to grow the fastest at 25.50%, the report said.