TikTok left a hole in the Indian network – Meta and Google want to fill it

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TikTok’s expulsion from India in 2020 has left a gaping hole in the country’s rapidly growing short-form video market, a hole that Instagram and several local rivals are battling to fill. Many of these new Indian suitors are being farmed by another American tech giant: Instagram parent Meta.it is

competitor of Google.

Last week, Google participated in a $255 million funding round that valued Mohalla Tech, parent company of local-language social media platform ShareChat and short-video app Moj, at $5 billion. of dollars. Moj is one of the biggest short video platforms in India. Mohalla also counts Temasek and Tiger Global as investors.

At stake is a market of around 240 million monthly active users as of last year, according to a 2021 estimate from Indian consultancy Redseer. In early 2021, the Indian government said Instagram had 210 million Indian users. Moj, after buying rival TakaTak, claims to have a combined monthly active user base of 300 million.

A Wall Street Journal survey found that TikTok only needs one important piece of information to figure out what you want: how long you dwell on a piece of content. Every second you hesitate or review, the app follows you. Photo illustration: Laura Kammermann/The Wall Street Journal

Google-owned YouTube remains the dominant player among longer video platforms, but the company still needs a bite-sized success story in the space. Redseer estimates that the number of short video viewers could reach 670 million by 2025, becoming India’s second largest media audience after TV viewers. The consulting firm expects 300 million new Indian internet users to be added by this year.

Google doubled down on India with a $10 billion Indian digitization fund in 2020, the year the pandemic accelerated the spread of the internet to many new pockets of the country. It was also the year India banned the popular Chinese short-video app TikTok – following a bloody border clash with China – and sparked a wave of imitators. Overnight, there were over a dozen alternatives, most of which have now pivoted or folded.

Google now appears to be taking a rug-bombing, or perhaps rug-fertilizing, approach to its breeding of India’s remaining short-video startups. Its other investments in the space include InMobi’s Glance lockscreen product and VerSe Innovation, parent of another short-video app, Josh. Last year, YouTube also bought a small video commerce platform called simsim. This all comes despite YouTube’s own short video feature, Shorts, which is enjoying some success in India.

Compared to China, India’s short and live video segment is still in its infancy, leaving a lot of room for experimentation and error. According to Bain & Co, investing in a portfolio of local businesses that understand the cultural and linguistic particularities of India’s estimated 640 million internet users can be a prudent decision. And in India, where ad revenue is low, these startups are testing live shopping, streaming, and tipping — all features Instagram Reels introduced in the United States. Instagram Reels.

According to Rajeev Suri, managing partner at Orios Venture Partners, Google is waiting for these short-video bets to pick up steam, and then it could pick them up for a bounty. When Google bought YouTube in 2006, the company was already a hugely popular platform.

The void left by the departure of Chinese tech giants such as TikTok’s parent company, Bytedance, has left plenty of real estate for deep-pocketed American tech companies to explore, and has also created huge uncertainty.

They say that when nothing is certain, everything is possible. For Google, in India’s short video space, that may be true.

Write to Megha Mandavia at megha.mandavia@wsj.com

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