Short videos will be as large as WhatsApp in India, will start monetising Moj this year: ShareChat’s Ankush Sachdeva

Edited excerpts:

Your recent acquisition of MX TakaTak was a long time coming. Can you share more on how the integration is going on and if $600 million will be the final value for the deal?

I think things are going well. On the value we can’t confirm, but I think it’s about the right range. Let me take a step back and share the larger idea with which we did this. The biggest value-add that we foresee is that we can unify the supply base and the demand of both the products. So the most important thing in this business is how relevant of a serving you have. So when you open the Moj app, you get a batch of 10 videos, and how relevant we make those videos for you. That is the function of how large of a data volume we have to train our models on. So by unifying this, we are actually making relevance better.

The value-add on the brand is the other part, where you have two consumer-facing brands now, Moj and MX TakaTak. There are some benefits in acquiring users cheaply in the short term. But long term, do we want to maintain two brands or one brand is a decision we will take over the next three to six months.

You acquired MX TakaTak for close to $600 million, which some in the industry say is overpriced considering that there isn’t much to gain, apart from getting more users. Did you pay too much for the platform?

See, all large acquisitions have this question being asked—is it overpriced or underpriced? In the long term, if you do well as a company, it looks like a genius decision. If you don’t do well, it looks like a stupid decision.

I think the way we look at it is, we see short videos as a massive market. And we have been leading the pack in the Indian ecosystem. We are just consolidating and making that even larger now. If you think about it from a user, creator or investor point of view, it is a clear battle where the Indian side is represented by us, versus the Western competitors who have launched a tab on their products. I think it narrows or consolidates the mindshare of people, which we believe is very important for the long term when you are playing in that larger market. And when I say large, I believe short videos will be as large as WhatsApp in India. It is going to be on every single phone and that’s already evident from the Chinese market. So when you attack a market as large as that, you have to be bold, aggressive. I think that is how we are approaching this problem.

How will you make money? Can you share the monetisation avenues?

We have three revenue streams...we are already on. One is the ads, a well-understood revenue stream that most companies monetise. We’ve been on the journey for the last two years now. Now MX (TakaTak) would be another product which we can fulfil our clients’ marketing demands. Second is virtual gifting, on which we are on a tear. We never expected India to be scaling so fast on virtual gifting we are now witnessing. And we’ve only launched audio streaming in ShareChat. It looks very much like India would be a China story versus the US story. Because China had a quick ramp-up on virtual gifting, which was not the case with the US. India looks much closer on the China side. The third is live commerce.

What is driving audio streaming?

There are certain audio streams which are very unique. When the lockdown happened, there was a hashtag around the Christian community. Because churches were closed at that time, they used to wake up at 8am and do morning prayers in the chatroom. In the comments, people used to say ‘I have this problem in my family, could you pray for me.’ There were people who used to pray for them. That is a very unique part of it, which this doesn’t monetise. But this is really good for community formation and time spent. Then there are parts which are very highly monetisable. Somebody is playing a guitar on an audio stream. And others come in and say ‘Play some Bollywood song,’ and when he is playing it others would start giving him like Rs 10 virtual chocolate. That is a monetisable part. So there are different categories within audio which are emerging, like astrology, which we are going deeper into.

Are you getting astrologers on the platform?

They’re already big. ShareChat is a very horizontal platform. Devotion, spiritual wellness and astrology are already big categories. There are in fact advertisers who are jyothishis (astrologers). Now we are giving them a channel to livestream that they can come and take consultation. So it’s a natural funnel that we have on.

Live commerce is another big area coming up. Can you talk about your plans on that front?

Video and live commerce is going to be a big way we monetise, where our influencers can engage with their fans and tell them or nudge them or create intent to buy certain items. We believe fashion is a big category, which we could start with. Let’s say a dance creator is wearing a lehenga and putting up a dance video. Even that generates intent in the passive consumers while they’re swiping the videos. In the normal world, they would build that intent, go to the offline world or go to a separate e-commerce app and find those things. We are trying to sort of convert that into our single app. Within that video right at the bottom, you will have a ‘Shop now’ button. And it could happen within a short video or live stream.

If you look at the market, everyone is getting into live commerce. There is hardly any differentiation. Will it be the player with deep pockets who wins, or could there be other factors at play here?

I have a very strong point of view that the one with the biggest relevant distribution will win. When I say relevant, you should have large daily active users (DAU), more time spent, and you should be able to generate intent within customers. This is not about being a first mover or last mover. I think we had a lot of live commerce standalone players for a very long time that didn’t go anywhere. It is a scale business and (about) making content, targeting it to the right audience. If you randomly show it to people, you will not generate the right intent. All three are important to build a scaled-out video commerce business.

Earlier you said you would decide if you want to be one brand or two. When TikTok acquired Musical.ly and integrated the app, the latter’s creators weren’t happy. How do you see this playing out for you, even though creators might overlap to some extent?

I think there is a very significant non-overlapping part and that is why we went with this because the overlaps are not that high. I think for Moj creators, their lives will not change essentially. But for MX creators, we want to make sure that they are very well taken care of. We will actively try to have incentives to make sure that they don’t churn away and actually give this unified platform some time. We are very confident that is one of the theses by which we went and did this deal, because we believe that we have by far the best recommendation engine, so any creator coming in the unified space will have a much better relevance fit. But I think there might be initial hiccups, there might be hesitation. We want to solve that by incentives, to make sure that MX creators give us a few months to get in the system to settle down. And eventually they will on their own realise that a unified system is far more efficient.

What kind of incentives are you talking about?

If they were getting paid through brand deals or through any other means, we want to make sure that those continue in the same protocol.

According to sources, ShareChat’s annualised revenues is $35 million…

No, it is far more than that. But I don’t think we are sharing.

Are you looking to raise more money? There is a buzz about you raising another round of funding of around $500 million at $5 billion valuation…

I can’t comment on the specifics, but there are a lot of people who are very excited by this.

Are there any pressures when it comes to funding in the current environment? Tech stocks have taken a beating in the public markets…

I think people who have strong conviction remain bullish. I think good companies will continue to get capital and we index on an investor, who has a very deep conviction on how large this market can be. We are not seeing that as a meaningful difference. We saw a lot of people who were previously coming just to be a part of the round. I think we have turned down hundreds of millions of dollars last year from people who never bothered to go deep in building conviction. And they were just coming out of FOMO (fear of missing out). I think right now we feel super happy about it, because we didn’t let the short-term investors be a part of our cap table (capitalisation table).

How is the competition heating up? On the one end you have the local players like Josh and on the other, there is an elephant in the room, which is Reels.

I think you’ve identified the elephant in the room really well. In fact, we are not indexed on other Indian apps, and don’t see that to be a long-term threat. What we do see is that all large Western players are large incumbents with hundreds of millions of active users, who have been in India for a very long time. All of them have launched this, and they understand that it is a good content category to be in. We have to build our strategy assuming that they will coexist. If you look at it from that long-term point of view, there are a few things which are very critical—relevance and ranking. The large Western players have been doing this work for the last several 5-10 years, and they are already very good at it. We have to make sure that we remain world class, which is determined by the kind of creators you are getting and make sure you can monetise them way better than the Western incumbents. I think those are the axes on which we play and the monetisation channels I mentioned to you, ads, gifting and commerce, we will make sure that while we make money, creators also make money.

If you look at the preferred platforms for brands, it is first Reels, and then they choose to go between Moj, Josh or others…

We have not scaled up revenue on Moj and we are not into monetising Moj yet. When we do end up scaling revenue, more agencies will only be talking about us. More than 90 percent of our revenue today comes from ShareChat.

So when do you expect Moj to share generating revenues?

I think we do have plans this year. We want to be very careful, because when you start monetising with ads, there is a negative impact on your consumer metrics. The short video space is a much more competitive space and Moj is relatively young. ShareChat is in a very unique space where it doesn’t have a lot of very relevant competition, so it can afford to have a very high ad load. And over the years, in fact, we’ve increased the ad load on ShareChat, because we have now figured that people are more immune to the ad load, whereas at Moj I think there is still some sensitivity and there is a lot of competition. So we are in that growth phase, we’ve been investing for growth. But I think with other streams like gifting and commerce you will start seeing scale up.

As the platforms grow bigger, so does the issue of content moderation. How are you tackling this?

We always had a content moderation team, which has undergone massive improvements over the years. One of the things which we keep improving upon is the entire first layer of defence, which is powered by our machine learning algorithms to predict certain high-risk content on the platform. That first layer of defence keeps getting better as we are now scaling our algorithm. After that layer, we still have a human layer, because there are a lot of nuances which AI still can’t catch, plus we are operating in Indian languages. So something which is hurtful in Odia is really hard to capture by AI or by a Hindi-speaking or English-speaking person. You have to get an Odia-speaking person for that. I think we are also investing in making sure that we have staff across the country in all languages. So I think in general, it is a large area of investment for us, even without MX. We were in any case doubling down.