SUMMARY
The company took the decision in December last year, nearly two years after the Google-backed firm forayed into the burgeoning live commerce space, a source said
ShareChat’s spokesperson said that the live commerce business has been scaled down, however, the company continues to be bullish on the sector
Sources close to the development said that they exited quietly because the live commerce business failed to do much
Mohalla Tech Pvt. Ltd., which owns the social media platform ShareChat and short video platform Moj, has shut down its live commerce business, sources close to the development told Inc42.
The social media giant took the decision in December 2022, nearly two years after the Google-backed firm forayed into the burgeoning live commerce space, a source said.
Some of the key positions, including the head of live commerce at Sharechat and Moj, were impacted due to the business restructuring exercise, another source added.
The social media unicorn was extremely bullish on its live commerce business, which was expected to be a good revenue source in addition to advertisements, gamifications, and rewards, which the Google-backed company was experimenting with, as per a source.
“However, they exited quietly because the live commerce business couldn’t do much,” he added.
The development likely took place at the time when ShareChat announced to lay off 20% of its workforce, or nearly 500 people, for business restructuring.
However, a ShareChat spokesperson said that the live commerce business has been scaled down, however, the company continues to be bullish on the sector.
“We are razor-focussed on our monetisation efforts going into 2023. As part of our 2023 plans, we’ve realigned resources on projects with higher weight on immediate wins either in the form of increased revenue or reduced costs,” the spokesperson said.
The spokesperson further added, “Live Commerce is an important long term strategic bet for us and we shall continue to invest in scaling it over time. However, in the immediate terms we have calibrated the budget outlay on this area. That said, it’s far from being shut down. We continue to remain bullish on this space in India.
“Ecommerce continues to be a very big market and we believe that social commerce can be a large play in India in the longer term. As part of these efforts, there has been an org-wide restructuring of our teams. We cannot however comment on individual roles that may have been affected as part of this,” the spokesperson said.
Flipkart-ShareChat Deal In Limbo?
In October 2021, Walmart-owned ecommerce major Flipkart announced a multi-year strategic deal with ShareChat. At that point in time, short video platforms like Chingari, Trell, Roposo, Josh, and Taka Tak were moving in the direction of influencer-led live commerce space to increase monetisation avenues and creators.
At the time of the deal, Mohalla Tech’s chief financial officer Manohar Singh Charan had noted that the creator economy-led revenue streams were seeing a massive upsurge globally. He also saw the collaboration with Flipkart as a step towards developing a concrete revenue stream for creators in India.
“The seamless amalgamation of content and commerce will push brands to reimagine how they connect with their consumers and ignite the digital social commerce revolution in India,” Charan had said.
ShareChat continued its live commerce push by partnering with B2B SaaS platform Dukaan in September 2022. It enabled Dukaan’s merchants to collaborate with creators present on ShareChat and Moj to promote their products through video and live content.
The company had raised $913 Mn in 2021, the highest-ever funding by a unicorn in the year.
During a press conference in April 2022, ShareChat’s CEO Ankush Sachdeva said that the company had set a target for its creators to earn $450 Mn in revenue by 2025 through virtual gifting, social/live commerce and ad revenues.
The company raised another $255 Mn from new investors like Google, Temasek and Times Group in 2022, with valuation surpassing $5 Bn.
ShareChat CEO had told BusinessLine in an interaction that the investments raised would be utilised in building social and live commerce capabilities apart from other businesses.
ShareChat, Moj, and Taka Tak, which the company had acquired earlier, aimed to reach out to a combined user base of 400 Mn in India through its various offerings.
Meanwhile, the company posted a loss of INR 2,498.6 Cr for the financial year 2021-2022, up 2.1X from INR 1,183.6 Cr in 2021. Including the non-operating expenses, its loss stood at INR 2,988.6 Cr. In FY21, the startup had incurred a loss, including non-operating expenses, of INR 1,460.9 Cr.
The development of it scaling down operations for live commerce comes just a few weeks after, ShareChat shut down its fantasy gaming platform Jeet11, resulting in 100 people losing their jobs.
Despite live commerce flourishing in countries like China, the business is yet to achieve a sustainable scale in markets like India and the US.
Facebook-owned Instagram has also decided to pull the plug on its live commerce feature, which allows users to tag their products during live broadcasts, from March 16, 2023.
Meanwhile, the government is planning to introduce a set of regulations to govern live streaming/commerce practices in the country.
