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Hike Finally Talks Revenue As It Looks To Tap India’s Virtual Economy

Hike Finally Talks Revenue As It Looks To Tap India’s Virtual Economy

Hike’s Kavin Bharti Mittal says the company is ready to roll out its revenue experiments in 2020 as it looks to monetise its fast-growing user base

There’s been an active debate these days about how many internet users India has that are actually monetisable. Not in terms of absolute numbers but the actual addressable base of unique users who are willing to pay for internet services, when they are not subsidised. Some estimates put it at 40% of all internet users, others say even fewer and with at least 600 Mn users, that feels like a drop in the bucket. But for Hike’s Kavin Bharti Mittal, that bucket is fast-filling.

“I think PUBG is a great example,” Mittal says before breaking off into which came first — Fortnite or PUBG. But he’s quickly back on the point. “So it’s not pay-to-play, or pay-to-win or level up, it’s simply pay-to-deck-yourself-up.”

According to the founder and CEO, this appetite for spending on skins in PUBG indicates that Indians are getting comfortable with microtransactions to prove their self-worth or find it at the very least. Mittal has no doubts that this digital self-worth is something Hike has tapped into in a massive way in 2019.

So much so that he tells us 2020 is going to be the year of revenue for Hike. It might leave many observers incredulous given the very lack of revenue for Hike over its many years in the Indian market, but Mittal’s confidence stems from the growth that Hike Sticker Chat has seen in the past year, with the consistent rise in usage and engagement around new features.

When Mittal spoke to us about Hike’s unbundled future earlier this year, he said that the company is looking to track users on a weekly basis, instead of the standard monthly or daily active users. The weekly active users (WAU) metric is a relatively new mantra for Mittal and Hike. From half a million or 500K weekly active users in mid-May this year, Hike has grown to 2 Mn WAUs currently, Mittal told Inc42. Engagement time has gone up to 33 minutes per day.

At the same time, the company’s focus on machine learning and AI-generated stickers has shown great results too, Mittal adds. He says the app’s new HikeMoji feature has seen 200K AR-based emojis created by users showing off their looks and styles on the app. HIkeMoji automatically creates a sticker set in the user’s likeness, similar to Apple’s Animoji, though Hike’s stickers are much more vibrant, have a local flavour and that desi touch. Mittal says that based on the response so far, it wouldn’t surprise him if there are a million HikeMojis in the next few months.

It might seem like the most innocuous of features, but Mittal is quite bullish about Hike’s future around this AR-based feature. In fact, he has good reason to be confident given what Hike has done this. The sticker chat app was chosen as one of the best apps on the Google Play Store by the tech giant. Mittal calls it a happy surprise for the company. And over the past year, it strengthened its AI team with industry vet Ankur Narang as VP of AI and data technologies. The AI team primarily works on the machine learning algorithms and the technology that puts together stickers in 40 languages.

One might wonder what emojis and stickers have to do with revenue. And one would be right in wondering that. Mittal says these HikeMojis have proven to the company that the quest for digital self-worth is alive and well among India’s Gen-Z and young millennial audiences. And that’s what it is using to tap into the virtual economy.

“We saw that the most important time period inside Hike is 10 o’clock at night. That’s peak usage. We talked to people and we asked them why. They told us, post 9:30 PM family time and dinner time is done. And so they’re like, we just want to chill out with our friends. But because we’re at home. People are hanging out on Hike because they can’t hang out offline.”

So Hike put HikeEmoji at the centre of this hangout experience for these users, many of whom hail from smaller cities in Tier 2, Tier 3 India. Hike is looking at the app not from the point of view of a WhatsApp alternative, but more of a social platform to hang out with friends, with a different design language than chat apps.

“Because communication is solved, right? But hanging out online is a whole different game. And that’s what we’ve been working towards the whole year and you’ll see us build upon it in 2020.”

But here Hike is competing with the likes of TikTok and other apps vying for that regional language user base. Isn’t revenue coming a little late in light of this new competition? And how will Hike compete with TikTok’s revenue machine?

Mittal moves back to the PUBG example, speaking about how kids are paying small amounts to buy weapon skins. “So the world has really changed. And we like this business model because it’s a bits-based business. And we are not big fans of advertising. We feel the ad-based model is the wrong choice.”

While Mittal may have a point about Indians accepting smaller-ticket size items such as microtransactions within games, one can argue that gamers see real value in buying even cosmetic items. For Mittal, that’s all about self-worth or the digital self-worth.

“You’ve got to build value that people will actually want to pay for. And there’s a lot of value in self-worth, It’s about becoming better, right? That’s what self worth is. And our research has shown that.”

According to him, every internet consumer business goes through four stages — driving engagement, user growth, revenue and then gaining profits.

“We are back at the user growth stage,” Mittal adds, pointing out the pivot from the Hike super app model to the unbundled approach with greater emphasis on Hike Sticker Chat.

So how far is the revenue stage?

“For us, revenue is one more feature. So I can launch a sticker and I can launch a paid sticker. It literally is this one feature now. And I call it revenue experiments. Because our goal is to experiment and try and see which way we can build the virtual economy around the technology and the entire ecosystem.”

Mittal is talking about the ML-produced stickers that Hike launched earlier this year. The company claims to have a million contextual stickers today in 40 languages. These stickers along with the new HikeMojis represent the revenue opportunity for Hike.

While he didn’t share any concrete plans, saying the company is not ready to make its plans official yet, he did give us a peek of what to expect. The future for HikeMojis could very well be digital avatars that can be shared across apps and even hop out of Hike to be integrated into its partners such as Winzo, the gaming startup in which Hike invested.

Mittal keeps circling back to shared experiences, calling it the main premise of the new sticker chat app and AR emojis. Hike is built for close friends and within this closed group of peers, a user’s personality can often be drastically different than their personality on Facebook, LinkedIn or even WhatsApp, which are more public.

That’s the personality that Hike is going after, Mittal tells us. “You can start evolving the avatar within Hike in a way that it becomes your mini personality and then you can start doing more things online as time goes by. And the HikeMoji is the centre of it all.”

Featured Image: Hike

https://inc42.com/features/assam-becomes-the-new-kashmir-internet-shutdown-extends-upto-48-hours/
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