Chingari Goes The NSFW Way

Short video is all but dead in India — and Chingari is building an adult entertainment app from this debris with salacious ads and promos seen in recent weeks.

Inc42 has spent several hours in the past week examining Chingari’s pivot to 18+ content with paid live 1-on-1 calls between creators and users. We have also seen recruitment posts for creators with promises of big payouts, in addition to several social media ads and videos featuring salacious promises to users. 

Many of these ads and social media posts have now been deleted, but this was after Inc42 approached the company with questions. 

After we questioned Chingari about its new feature and monetisation model, the company even changed its Android app’s parental rating on the Google Play Store to 18+ this week (June 22, 2023), even though the personal video call feature was introduced in April.

As we will see, the feature is clearly a big step towards monetisation since users have to pay in the form of in-app diamonds for each video call.

In short, the ban on TikTok in June 2020 left a big gap in India and Indian short video apps rose up almost overnight to fill this chasm. Following the rise in user base among these apps, VCs invested heavily.

Mitron received $5 Mn, Chingari closed its seed round, and Trell bagged $15 Mn all in 2020. In the following year, Chingari went on to raise $32 Mn, Trell bagged $45 Mn. Google-backed Sharechat, post the launch Moj raised a massive $647 Mn from multiple rounds. But after that initial euphoria, Chingari, Trell, Mitron, Moj, Roposo, Josh and others have struggled to monetise their scale in terms of users. 

As far as Chingari is concerned, the startup launched a native token called GARI in 2021 to drive usage, but this has not helped matters.

With investors no longer funding social media startups that do not have a clear monetisation plan, Chingari has turned to personal 1-on-1 calls built around in-app purchases. 

As we will see, in its current form, Chingari’s 1-on-1 video calls feature has many problems ranging from content moderation to user abuse and even improper filters to block underage users. For instance, the app’s iOS version is still available for minors, even though the Android app’s rating has changed.

So this is the story of why Chingari has gone the NSFW route to make money, and we will look to answer whether this feature will court more trouble for the company given the high potential for online abuse and the stringent laws for adult entertainment services in India.

Chingari’s 18+ Makeover

Before diving into the rationale behind the feature launch and the legal implications, it’s pertinent to understand how the live 1-on-1 calls work on Chingari.

Currently, the Chingari app has four main sections — the short video feed, an audio-only room, the mining feature for the in-app GARI token and most recently, the contentious live video chats and personal calls. 

While live chats are one-to-many (similar to Instagram Live), the personal calls are 1-on-1 and private between the creator and the individual user. Of course, Besides, users have to pay to get virtual diamonds to make personal calls.

Besides using diamonds for calls, users can also redeem them for gifts for creators. In fact, creators encourage users to make 1-on-1 calls (i.e. take things private) and in most cases, they tend only to accept calls when users send a gift. 

Diamonds can only be bought in packs, the prices of which range from INR 9 for 20 diamonds to as high as INR 39,999 for 100,000 diamonds.

 

This is the new-age premium-rate calling model that Chingari is banking on, but there are grave problems. 

Multiple sources told Inc42 that since these are private calls, the chances of them involving graphic images or language is high. Indeed, that is the pitch used by many creators as witnessed by Inc42 in our review of the app — several asked us to enter into private calls to get the full experience.    

Describing some of these calls as “soft-porn”, a former Chingari employee alleged, “If you check the 1-on-1 video calls around midnight, it would involve explicit content.” Another source alleged that post 9 PM “personal calls are predominantly filled with NSFW content.”

The source did not explain how they know this since the calls are meant to be private between the creator and the user. But they indicated that Chingari’s automated filtering systems would routinely flag 1-on-1 calls as containing nudity or other graphic content. 

Where’s Chingari’s Content Moderation? 

Chingari denied these allegations of adult entertainment on its app. A spokesperson told Inc42, “We deploy numerous strategies on ensuring that nothing explicit/sexual occurs in the one-on-one video calls.”

The company claimed it has AI-driven models to check and block NSFW content. “We have onboarding training for the creators and inform them about the procedures. Users/Creators are blocked if any such scenarios are reported against them” 

The spokesperson further added that the company educates users not to use explicit images. The statement did not elaborate on how this filtering system or AI models work.

But another source claimed that these models do not protect creators from abuse or distress. This particular individual is responsible for bringing more creators to the Chingari app. 

“It’s not like all calls are bad. Like any other social platform, there are low-quality users and bad actors that have ill intentions, but the creator can always end the call and report the user,” the source explained.

The issue of users abusing the private call feature was also highlighted by a creator on Chingari when Inc42 was reviewing the app. She mentioned the rising prevalence of inappropriate calls and said she would discuss these concerns with the Chingari team.

She also claimed to know creators who had been severely disturbed by the abuse faced in 1-on-1 live calls, and also had concerns about her image being misused by users or the app for promos. 

Indeed, the chat section of the public live streams is inundated with users demanding that the creator remove pieces of clothing among other unsavoury requests. Inc42 has blurred out the names and images in all screenshots to protect the identity of users and creators. 

So despite Chingari’s claims of using AI to moderate content, there are serious gaps in the app that could snowball into larger issues around violations of indecency and abuse laws. The company also did not explain how the app is available for users aged 13 and above on iOS. 

Chingari’s Suggestive Ads Drive Engagement

It doesn’t help Chingari’s defence that the company has also posted salacious ads to promote the 1-on-1 call feature. These ads typically prey on insecurities related to loneliness and are more than suggestive.

A Facebook ad seemingly posted by Chingari in April this year (see below) appears to solicit users for adult personal services. The video and the associated page title ‘Chingari Live’ was deleted after Inc42 reached out to Chingari seeking a clarification. 

 

We came across at least two such ads associated with Chingari’s personal call features, and dozens of other app install ads from the past that used images of women. 

The company spokesperson clarified, “Ads are run by 3rd party affiliate partners and are not endorsed by us directly. Again, whenever we detect something of that nature, we take down the content from our platform through our robust mechanism in place. On Facebook also, whenever we detect such ads we direct our affiliate partners to take it down. Only ads from official Chingari handles are run by us.”

Apart from this, we also came across several social media posts that promised creators high payouts for signing up with Chingari Live. Almost all of these ads specifically wanted female creators.

 

Today, the app’s live video section is completely populated with female creators; we could not spot a single male creator on the live section.

“The platform has placed a particular emphasis on the recruitment of women creators in response to user demand and as part of a broader effort to promote gender diversity and inclusivity within the community. While plans are in place to expand the creator base to include males as well, the initial focus has been on developing a Creator On-boarding Program geared towards attracting female applicants,” Chingari claimed in response to the bias in bringing on female creators. 

Legally speaking, Chingari also risks many of its users breaching laws pertaining to insulting the modesty of a woman. Outraging of the modesty of a woman is governed by Section 509 of the Indian Penal Code and is frequently attached with other sections of IPC involving sexual assault.

“When it comes to obscene acts in a one-on-one conversation between two adults, the video apps have a policy of self regulating themselves. Provisions of Indian Penal Code may apply in many cases but practically speaking, the reporting of such cases is very low, and even when they are reported, the chances of procuring a conviction is even less,” Ashish K Singh, Partner, Capstone Legal told us.

However, any allegedly abusive communication involving an adult and a minor is theoretically far easier to prosecute due to dedicated anti child abuse laws.

Chingari Chases Revenue 

The question of why Chingari has taken an 18+ turn on its app has a simple answer: revenue. 

Multiple sources told us the feature was not in the product pipeline till it was added at in the beginning of this year. The objective was solely to grow the company’s topline.

“Nothing was working. The engagement and downloads were down. And this feature was built and added hastily to get more traction and revenue on the platform,” one of these sources told us. 

Everything Chingari has tried in the past has failed to take off. 

Launched in 2018 by Sumit Ghosh, Biswatma Nayak, Deepak Salvi, and Aditya Kothari, Chingari rose to fame as a short video platform in late 2020 and early 2021. After the initial buzz in that post-TikTok era, the short video business has faltered. 

The global macroeconomic slowdown and decline in ad spends across industry has impacted the primary revenue stream for the short video app. Plus, the entry of Instagram (Reels) and YouTube (Shorts) locked out all Indian competition, given that these apps have billions of users globally. They managed to tap the global nature of TikTok content better than any of the Indian apps. 

Even before the ad revenue decline, Chingari had other problems. For instance, the app has not always been above board when it comes to engagement numbers. In March 2021, Inc42 found that the app was inflating view counts for videos from new users in the hope of retaining them. 

It even tried its hand at live commerce, which has been all but abandoned. Audio chat rooms, introduced in May 2021, are still around but that section is a ghost town on the app.  

Chingari also entered the crypto space with the GARI token, a feature it hoped would drive engagement and new downloads. The app still has a mining feature to help engaged users get GARI, but the value of the token has plummeted in the past year. 

GARI token was launched when Chingari raised $19 Mn in October 2021. It partnered with Solana to launch its social token. The app had plans for an ecommerce store for physical merchandise, NFT creations, and the ability for users to pay content creators directly through tokens.

In many ways, paid personal calls and gifting are a last-ditch attempt to salvage some revenue. Indeed, these standard monetisation features for apps in the live video space previously seen in Chamet and other such apps including Bigo Live, Tango, Azar to name a few. 

In our investigation, we found that agencies that sign up creators for Chingari often used similar language and imagery as agencies that recruited for Chamet and others. Currently, the app has creators from all over the world, including Southeast Asia, Europe and Africa.

One former employee pointed out, “This is a rip-off of Chamet app. Earlier it was TikTok, now it’s Chamet!” 

Hong Kong-headquartered Chamet was in the news last year when Mumbai Police busted an alleged sex racket on the platform. Chamet app continues to be available on the Google Play Store.

Moral and ethical quandaries aside, Chingari clearly needs the revenue. The platform claims that it “entertains” 175 Mn users overall and hosts videos in 15+ languages. 

A quick glance at Chingari’s FY22 numbers reveal that the startup’s losses have increased by over 225% to INR 139 Cr in FY22 from nearly INR 43 Cr in FY21. The net loss is almost 3X the revenue of INR 49 Cr in FY22, so the company needed to increase its revenue to reach any semblance of profitability significantly.

It also had to trim expenses from the INR 188 Cr it spent in FY22. One major cutback is the dismissal of around 20% of the workforce. That was the official figure quoted by the company, but sources suggest that over 40% of the workforce has been impacted by the layoffs.

But other expenses are curious. Last week, the company acquired the rights to Chingari Gulf Titans, a chess franchise in the recent Global Chess League in UAE. 

Till date, the company has raised $47 Mn with investors such as OnMobile, Republic Capital, JPIN Venture Catalysts, Hill Harbour, Galaxy Digital, Alameda Research, Solana Capital, Astarc Ventures and HNIs. 

According to reports from April 2022, the startup was supposedly in talks to raise $200 Mn in a funding round at over $1 Bn valuation and had already received the commitment of half the amount. However, the deal never materialised. 

To complicate matters, cofounder Aditya Kothari stepped down in May 2023 without disclosing any reasons. Ghosh, who is the Chingari CEO, claimed Kothari’s exit would not be material to the company’s future as he had not been involved in day-to-day operations for at least 18 months. 

Former CTO Tarif Wali, who was leading crucial AI and ML projects at the company, had also stepped down in late 2022. 

Cash infusion is not just critical but also necessary for floundering social apps to acquire new users and scale up. Digital marketing campaigns drive new downloads, which seems to be the case with Chingari given that organic engagement is down, as corroborated by sources. 

Soon after raising its last major round in October 2021, Chingari saw downloads surge, but it seems to have burnt all that cash by May 2022.  

Data sourced from Apptopia, show that Chingari’s download numbers fell off a cliff around May-June 2022, after touching a peak of around 500K daily downloads in January 2022. Since then downloads have not recovered to anywhere close to Chingari’s heydays. 

 

Incidentally, it was also in May 2022 that markets regulator SEBI had looked to tackle the issue of celebrities such as Salman Khan and others endorsing cryptocurrencies and tokens such as GARI. Did this potentially have an impact on Chingari’s appeal? 

A source quoted above said that Chingari has a history of banking on trends, but the company has failed to make the most of any of these. 

The GARI token, powered by the Solana blockchain, was said to be a key to help creators monetise their content and also give engaged users some value besides entertainment. Today its value is less than 95% of what it was one year ago. Chingari also launched a NFT marketplace, but NFT products, in general, have gone bust amid the crypto winter since last year. 

In February 2023, the startup raised an undisclosed amount from Aptos Network, the company behind the Layer-1 blockchain Aptos. Chingari said it will use the fresh funds for user growth, product development, global expansion, and to ramp up its engineering team. 

It seems at least some of these funds have been used as incentives to bring creators on board, since Chingari is offering INR 3,000 as fixed monthly payout in addition to incentives.

 

Chingari also said it plans to launch an upgraded app on the Aptos Network by the second quarter of 2023, and expand to more territories.

But it’s unclear whether this upgraded app will completely differ from the current avatar. With the NSFW content and video calls, Chingari has moved quite far away from its original promise of building an India-centric short video app. 

“Given the choice between two apps which are exactly the same, but one is made in China and the other one is made in India — which one will you choose?” 

That’s what CEO Ghosh told us in an interview in July 2020. Chingari’s Made in India pitch was great marketing for the time, but now the app is resorting to promises of cheap thrills. 

Will Chingari’s ‘pivot’ to NSFW content escape the law enforcement radar for long? 

Apps and websites have been banned for far less in India and indeed access to pornographic content has been limited by various court and government orders in the past. Will Chingari be able to escape this hammer?