Short-form video platforms in India are thriving with a user base of 250 million, with approximately 65-70% of users coming from Tier II cities, semi-urban, and rural areas, according to a report from Redseer Strategy Consultants.
The report, titled ‘Demystifying India’s SFV Platforms,’ reveals that about 40% of users are engaging in online transactions on these platforms, presenting various monetization opportunities in e-commerce, online gaming, and OTT video streaming.
The rise in disposable income among Tier II+ users offers numerous monetization possibilities for India’s short-form video landscape. Models like live commerce and live gifting hold promise for increasing monetization, according to Mukesh Kumar, Associate Partner at Redseer.
User-generated influencers, categorized as micro, macro, mega, and elite, have become prominent and can earn substantial income through advertising, live commerce, platform payouts, brand deals, and virtual gifting.
User engagement on Indian short-form video platforms is driven by the provision of original, relatable, and non-inflammatory content with low repetition rates, resulting in a net promoter score of around 55%. The ban on TikTok in 2020 created opportunities for both Indian and international short-form video platforms, which now cater to diverse audiences and offer new avenues for advertising and content consumption.
While global platforms are favored by urban users, Indian platforms have gained popularity in non-metro and semi-urban areas due to the availability of high-quality regional-language content created by local talent. Approximately 45% of Indian users reside in semi-urban and rural areas and engage with various internet platforms, from gaming to e-commerce.
Demographically, nearly 64% of Indian short-form video platform users are aged up to 25, with mature users making up less than 3% of the user base. Content with a ‘hook and hero’ narrative has proven effective in reaching diverse user demographics, contributing to Indian platforms’ net promoter score of around 55%, making them a promising tool for advertisers.
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Additionally, machine learning and natural language processing algorithms within these platforms ensure accurate content tagging. Despite ongoing funding challenges in the startup landscape, advertorial spending on short-form video platforms is stabilizing, driven by cost-efficiency, higher engagement rates, and extensive audience reach. These platforms often achieve higher click-through rates due to more engaging, shorter, and non-intrusive ads.