Domestic short-video platforms are on the “cusp of a breakout”, with their monetisation models rapidly maturing and new revenue streams coming to the fore, according to a report by Redseer Strategy Consulting.
These platforms collectively generate $95-100 million in ad revenue, accounting for 1-1.5% of India’s $10-billion digital advertising market. Despite this relatively small share, Redseer identifies potential for growth, especially in regional markets, where 73% of user conversions are driven by Tier-2 and Tier-3 cities.
Redseer said that these platforms, having more than 200 million monthly active users, are well-positioned to expand their revenue base by refining ad products and leveraging multiple monetisation streams. Virtual tipping – a feature allowing users to reward influencers during live streams – is currently valued at anything between $70 million and $220 million. Redseer projects this to scale up to $700-800 million by 2030.
The report states that more than 50% of the platforms’ users are monetisable, actively engaging in online shopping, gaming, and digital transactions. “These platforms have a large monetisable audience pool, and brands are beginning to take them seriously for targeting Tier-2 cities,” said Mukesh Kumar, Associate Partner at Redseer.
India’s short-video market has evolved significantly since 2018, when TikTok first gained traction. Following TikTok’s 2020 ban, Indian platforms such as Moj, Josh, and MX TakaTak rapidly stepped in to fill the void, attracting influencers and users.
While global players such as YouTube Shorts and Instagram Reels dominate with pre-installed apps and global reach, Redseer notes that Indian platforms differentiate themselves by catering to regional audiences with vernacular content.
Despite their potential, domestic short-video platforms face challenges in scaling their advertising revenues. Redseer identifies the lack of performance-driven ad products as a potential hurdle. Current ad offerings are primarily geared toward branding campaigns, whereas global platforms excel in offering tools for measurable outcomes like app downloads and website visits.
Live shopping, another emerging revenue stream, also shows promise but remains nascent in India. While platforms like Amazon Live and Flipkart Live have seen some traction, Redseer estimates that live shopping will account for only 1-2% of the total e-commerce revenues in the near-term.