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Jul, 2022     

Indian ShortForm Taking Quantum Leap to Monetization in Less Than 2 Years

ShortForm can become a $12-19 bn opportunity by 2030


ShortForm apps are witnessing phenomenal growth. The accelerated growth of the ShortForm market in India has been on the back of homegrown apps. In less than two years, Indian ShortForm apps have matured significantly and are now poised to start monetizing their user base. The nature of the format makes it easily digestible and accessible, making it far more popular than other digital commerce apps. In this newsletter, Mohit Rana and the team examine how Indian Short Form reigns supreme in the eyeball-grabbing game and what monetization opportunities await.

1. The Indian ShortForm is wooing the nation, with nearly 80% of smartphone users coming onboard by 2030.

 

With a 300 million monthly active user base, Indian ShortForm is going ‘viral.’ In just two years, Indian apps have matured significantly. Due to the rapidly improving quality of content and algorithms in Indian ShortForm apps, it is expected to reach an MAU of 550-600 Mn and penetrate nearly 67% of all smartphone users by 2025.

2. The frictionless nature of ShortForm content relative to others is driving eyeballs and increasingly becoming synonymous with users’ daily routine

Average Indian users spend nearly 38 minutes per day watching ShortForm content. Gripping content aside, there are various reasons why Indian ShortForm content is overtaking LongForm. First, the sheer size of the user base plays a critical role; there are nearly 700-750 million internet users in India. Another factor is the increased penetration of smartphones in Tier 2 cities and below—from 46% to 80%. The short-form content also breaks the curve with low decision fatigue and an endless content library.

3. This will attract brands and marketers to seize the opportunity, presenting potential of 10–20% of digital spends moving to the Indian ShortForm by 2030

 

Globally, ShortForm apps have unlocked massive value. In India, the digital ad market is expected to witness 5X growth between 2022 and 2030. India’s ShortForm advertising projection is 10-20% by 2030, a reprise of China’s growth trajectory where ShortForm apps presented 30% of digital ad revenues.

4. The opportunity only grows more prominent, amounting to $12-19 bn, if we combine the three primary levers for monetization: video-led commerce, digital advertising, and gifting

 

In China, video content-led commerce was the most significant driver, growing 100X in 4 years. If India follows suit as it has in other areas, video-led commerce on ShortForm apps could be a gamechanger. It is currently projected to comprise 8-11bn of the total.

The current stage of ShortForm app acceptance seems to be simply the prelude of a promising and longlasting saga, with continual algorithm advancements further pushing content viewership across segments.