Retaining users, getting them to create a digital footprint and making them addicted to the app is crucial in this 'winner takes all' market, they added.
According to industry estimates, around 12-15% retention is considered good for a short video app. So, a few million downloads just does not suffice in the cut-throat industry, they said.
"The kind of money needed for scaling won't come into many apps. They don't have the capability to pool money or build scalable apps. I can bet most apps seeing downloads today will lose 90% of the people within a month," said Anand Lunia, founding partner at India Quotient, which has invested in ShareChat and Roposo.
Building the next TikTok will require top-notch engineering capability and a recommendation and personalisation engine backed by millions of dollars for marketing, user, and creator acquisition.
"You need $50-$100 million to even play in this space. Anything less than that is subscale. There is a low barrier to entry but hard to sustain. There are going to be a thousand short video apps, these core capabilities have to be scaled to win," said Dev Khare, Partner at Lightspeed India. Lightspeed has invested in ShareChat and RheoTV.
Some Indian apps are facing bugs, server issues, as well as security concerns.
Many have crashed, unable to take the load of new signups. "Reaching the level of TikTok will take time and a good amount of money will need to be pumped in. Good user experience is necessary for stickiness. Millennials are short on patience, so you cannot have technical glitches. Social media is all about addiction," said Amit Kumar, Partner at Ah! Ventures, which has invested in Bolo Indya.
The challenge of user retention can be seen in TikTok's data.
According to the latest data, TikTok, backed by the world's most valued startup ByteDance, was downloaded 660 million times in India since launch.
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20 Comments on this Story
asian highway246 days ago
the main problem here is a genreral lackadaisical attitude towards everything. If tried properly, im sure our brains can certainly become a competitive player in the cyber market as well. if our scientists can put the country on the space technology map , create our own navigation maps like IRNSS etc with minimal resources , then creating successful online apps should be a child's play
Micky S246 days ago
in every idnustry,whoever captures the market first,its the leader.FB came into social networking and even after google launched google ,FB was the leader.In the end google had to be scaled down.Deep pockets only doesn't matter.China has the huge internet market and there is money to back them.It is also not open to outside world.As a result any new app which is different will gain ground over there.In India already most of the apps are flooded by those that were created by Amercians.
Nathan Ron246 days ago
The Indian spirit is when we are pushed into a corner with minimal resources, we turn victorious in the end by industriousness and fighting our way out of the corner. Never underestimate the villager, even he has an industrious mind to resolve problems at his level, and so it is with every strata of Indian society.