Internet of Things
IoT Viewpoints explore the IoT opportunity in 2018 and beyond. Download our latest e-book to get our newest collection of thought leadership articles on the emerging IoT trends, technologies and opportunities.
The Indian messaging app Hike raised $175m in a series D round of funding led by Tencent and Foxconn, with previous investors including Bharti SoftBank and Tiger Global. This additional round of funding values Hike at $1.4bn. The messaging app is focused primarily on the Indian market and is estimated to have more than 100 million registered users. However, WhatsApp is the leading messaging app in India with substantially more than 100 million monthly active users, leaving Hike fighting it out for second place with Facebook Messenger and Viber.
India is a key market for messaging apps given the large emerging mobile population and also the mobile-first nature of the market, which means the mobile phone is the primary device for a range of digital services including revenue generating services such as e-commerce. Therefore, India is an important market not just for messaging apps with ambitions to become platforms for digital services, but also for device manufacturers and Internet players such as Apple, Facebook, and Google.
Tencent entered the Indian market in 2013 through WeChat. It was unable to capture the local traits of the market, however, despite partnerships with local content providers such as BuzzFeed India and Hungama. Both WeChat and Hike follow a similar strategy with a strong emphasis on localization. Examples of localization include the types of stickers offered on Hike, or features such as private chat which have been designed with the Indian youth in mind. For Tencent, after WeChat met with a lukewarm response in India, it has hedged its risk in the Indian market by backing Hike. Also, Hike with its strong India focus, will not pose a threat for WeChat in other markets. Besides benefiting from the funding, Hike can also learn from WeChat’s experience of evolving from a chat app to a digital services platform and can adapt services to suit the Indian context. This platform-based model is starkly different from the pure communications services play followed by WhatsApp. Therefore, by pursuing the platform model of communications, Hike has definitely differentiated itself from the biggest player in the market, giving it an opportunity to carve out a sizeable market share in India.
The $175m funding round from Tencent and Foxconn values Hike at $1.4bn. Hike, however, has a long and challenging road ahead to win over the Indian market and become a revenue-generating service. Being in the early stages of monetization, and with 100 million registered users, Hike needs to ramp up its user growth engagement and continuously grow and evolve its service portfolio to keep up with new and established players in the market. Hike has focused primarily on the youth market, but needs to look at other demographics as well if it is to accelerate its growth. The time is right for Hike to start making strides towards the platform model and establish itself as a digital services hub before global heavyweights begin to shift their attention towards India. For example, Facebook is bulking up the services it offers on Facebook Messenger at a global level and it should not be long before it translates these services in other markets. Meanwhile, Google has recently launched the video calling app Duo and is due to launch its new chat app Allo, further crowding the Indian market and making it even harder for Hike to grow its market share. In addition to this, players such as SnapChat are also growing organically and gaining momentum within the Indian market.
Hike might be best placed to understand the Indian market and the local elements that go with it, but it has to move fast and grow quickly to become a leader in this highly competitive and dynamic industry.
OTT Communications Tracker: 3Q15, TE0003-000889 (December 2015)
2016 Trends to Watch: Communications Services, TE0003-000894 (January 2016)
The Regulatory Position on Telco–OTT Partnerships, TE0007-000925 (July 2015)
Telco–OTT Partnership Series: Netflix and Pay-TV Operators, TE0003-000805 (November 2014)
Telco–OTT Partnerships Tracker: 1H15, TE0004-001033 (July 2015)
“Video, music, and social media dominate telco–OTT partnership deals,” TE0003-000829 (February 2015)
Digital Economy 2025: The Future of Communications, TE0009-001524 (May 2016)
Deutsche Telekom’s managed OTT service is a step into the future for voice, TE0014-000398 (March 2016)
Neha Dharia, Senior Analyst, Consumer Services
Consumer & Entertainment Services
By Adam Thomas 28 Mar 2018
With US pay TV having endured the worst year in its history, thoughts have inevitably turned to the future. The likelihood remains that the immediate future will remain highly uncomfortable for everyone except the scaled multinational digital platforms.
By Evan Kirchheimer 26 Apr 2018
Service provider interest in justifying 5G investment through its potential to open new revenue streams from the enterprise segment is growing ever greater.
Europe, Middle East & Africa team - +44 (0) 207 017 7700
Asia-Pacific team - +61 (0)3 960 16700
US team - +1 646 957 8878
Already an Ovum client? Login to the Knowledge Center now