In March 2020, Clubhouse, a US-based social audio app launched with much fanfare. Around the same time, albeit more quietly, ShareChat, an Indian social network with 160 million monthly active users, launched its live audio feature called ShareChat rooms.
In one year, says Team ShareChat, not only have they become the largest live audio product in India, with 1.2 billion minutes streamed monthly, they have also successfully started to monetise the chatrooms – something that the much talked-about Clubhouse is far from doing.
Beating Lockdown Blues
The impetus for the chat rooms came from the lockdown and the fact that people were seeking engagement and entertainment. Live audio removes two friction points. First, audio-based conversations have a lower cognitive load than text. Second, audio removes the burden of being ‘camera-ready.’
Roadblocks and Solutions
1. Moderating Abuse
Any chat room involves a three-layered community: host, speakers and passive listeners. ShareChat says that the biggest roadblock they faced initially was moderation. Live audio abuse is hard to moderate, especially when the rooms have multiple language conversations in play.
The product team handled this by empowering the host to take immediate action and mute or remove the offender. Platform controls were also built to identify repeat offenders and send them warnings, as well as block them from rooms.
2. Ranking in the Feed
Audio products are still in their infancy and not enough data is available to show how users typically discover and explore chat rooms.
Currently, ShareChat uses a combination of multiple attributes, including chatroom names, popularity and heuristics of audio activity to rank rooms in user feeds. As they gather more data, they expect to make this more nuanced and sophisticated.
3. Host Gratification
The chat room host is at the centre of the entire experience. A considerable amount of work goes into running a room – from ensuring the conversation is engaging, to building affinity and maintaining decorum.
The success of the chat rooms, therefore, depends on attracting and retaining high-quality hosts. The ShareChat team realised early on that incentivization would be necessary to do this.
Their solution was to offer monetisation for hosts via virtual gifting. Virtual gifting is a common and widely-used phenomenon on all Chinese platforms, although it is yet to catch on in India. For the uninitiated, here’s how it works:
- Hosts enable the ‘gifting’ option in their chat rooms
- Users buy an in-app currency called virtual coins
- Users can then use these coins to buy virtual gifts available on the platform and gift these to the host, who can redeem them.
On Chinese platforms, the hosts can redeem the gifts for cash, after paying the platform a transaction fee. ShareChat is still building out the model, and declined to share further details about redemption at this stage.
Virtual gifting was launched in September 2020, and ShareChat says they have seen an exponential rise in host earnings since then.
Equally important for the flywheel, was encouraging users to buy and give virtual gifts.
Realising that this may need more than the typical chat room, the team turned to well-understood offline activities like talent showcases and team competitions.
A feature called Chatroom Battles was launched, where participants in chat rooms participate in challenges for everything, ranging from their favourite cricket teams and talent contests to a round of antakshari.
The Battles feature has played a big part in spurring more gifting and therefore higher host earnings. Research shows that users feel a strong association towards their most frequented chatrooms and give gifts to make their chatroom win during challenges like antakshari duels and cricket matches.
Further gamification features have also been added for users, where they can move up through different levels and unlock more rewards.
We spoke to Nishad Shah, Sameer Gupta, Mithun Madhusudan from ShareChat’s Product team, who first announced the chat rooms in this post.
They point out that the comparison to Clubhouse is flawed, since the US-based app addresses only an English-speaking audience. ShareChat’s audience, on the other hand, has very different needs from content generation to consumption, privacy to monetisation. The future product roadmap reflects these user needs and is focused on features that further empower hosts and create deeper affinity for users. On the cards is a loyalty programme and more gamification.
We have realised that the success of a community is directly related to the success of its leaders. We will continue to empower our hosts with community building (and hence monetisation) products.ShareChat Product Team
It is early days yet but the initial success of ShareChat’s chat rooms has already shaken two long-held assumptions – first that virtual gifting will not work in India and second that it is impossible to monetise Indian users beyond the affluent ‘India 1’ users.
There is no doubt that audio opens up all manner of possibilities for ShareChat, since its audience is likely to be more comfortable with the medium than text. If virtual gifting works and grows, we will probably see the feature copied by other social apps very soon. However, by keeping the hosts at the centre of their product strategy, ShareChat may have gained an early advantage in building and retaining an engaged audio-first community.
All images courtesy of ShareChat
Excellent read. Real innovation happening in Bharat apps
There are many blogs from companies but THC puts a lens on it that provides context and makes it easy to read and understand quickly – so yup, thanks for that team.
Appreciate your effort team THC in always bringing new and original content that is helpful for Indians
Glad to see a product team that actually tries something new and interesting instead of only tweaking buttons
As you say, everyone will copy feature. Will be interesting to see how ShareChat keeps edge. Will winner finally be app that pays most to hosts?
IMHO you need both sides of flywheel. Winner will be app that has the most active chat rooms – money for hosts will follow
Very interesting story. I think what SC may have understood is that the Indian consumer is changing. What was true 5 years ago is not true now. Great they they tried the experiment instead of just accepting status quo