Why homegrown apps struggle to scale

Past ventures, such as Hike and Koo, failed to gain lasting traction. The reasons lie in a mix of limited scalability, inconsistent funding, weak advertising ecosystems, and an overreliance on imitation rather than innovation. With the government stepping up its push for ‘atmanirbharta’ (self-reliance) in the digital space, creating sustainable homegrown social media platforms remains an uphill task.

Social scale

Of the estimated 5.5 billion people using social media globally, about 491 million consumers are in India, making it the world’s second-largest market after China.

The widespread availability of affordable smartphones, low data tariffs, and the rapid rollout of high-speed 4G and 5G networks have enabled millions of Indians to come online and join social platforms.

Estimates suggest that Indian users spend an average of 2 hours and 28 minutes daily on social media, higher than in several major markets such as the US (2 hours and 18 minutes), China (1 hour and 56 minutes), and the UK (1 hour and 49 minutes).

For platforms looking to build scale in India, the opportunity is clear: a vast, active, and deeply engaged user base. Moreover, with India’s total internet population now approaching one billion, a significant segment of users can still be brought onto social media, representing a largely untapped growth opportunity.

Network nexus

The value of any social media platform increases exponentially with each additional user, as people tend to join where others are already present. This creates a powerful incumbency advantage for global giants such as Instagram, YouTube, and X, which already host vast and deeply interconnected user communities.

Much of India’s social media population is concentrated on these global platforms, leaving limited space for domestic entrants. For Indian alternatives, strong technology, design, or intent alone are not enough unless a critical mass of users, including friends, influencers, and advertisers, migrates simultaneously.

In a recent post on X, Kevin Bharti Mittal, founder of the made-in-India messenger app Hike, admitted that the network effects enjoyed by global players were simply too strong for Hike to survive. Without scale, engagement remains low, advertisers stay away, and new users find little reason to join.

Since the cost of switching platforms is social rather than financial, domestic apps struggle to overcome the gravitational pull of established global networks without coordinated or incentive-driven migration.

Innovation gap

Some Indian platforms managed to gain early traction, often buoyed by government support. Koo, once touted as India’s alternative to X, reached about 10 million monthly active users at its peak but soon lost momentum.

More recently, Zoho’s Arattai messenger witnessed a sharp rise in downloads following the government’s push for digital self-reliance, increasing from fewer than 10,000 in August to over 7 million by October.

Yet, while attracting downloads may be easier, keeping users active each day remains the real challenge. Global players like Instagram, YouTube, and WhatsApp continue to retain users through constant innovation and superior user experience.

WhatsApp, for instance, despite facing little competition in messaging, keeps rolling out new features at regular intervals.

In contrast, most Indian platforms have struggled to keep pace, often replicating global features with delays. Without fresh features, vibrant communities, and frequent updates that reflect changing user behaviour, domestic platforms find it hard to hold subscriber attention.

Capital crunch

Building and scaling a social media platform demands significant upfront investment in technology, user acquisition, and marketing, while monetisation through advertising or subscriptions takes years to materialise.

Most Indian start-ups struggle to sustain such long gestation periods without deep financial backing. Although government initiatives and the post-covid boom initially fuelled investor interest in tech ventures, funding inflows have since slowed sharply.

Investors particularly view social media as high-risk and difficult to monetise in a price-sensitive market. India’s relatively weak digital advertising ecosystem adds to the challenge, with global giants such as Meta and Google dominating ad spending and leaving limited opportunities for smaller players targeting regional audiences.

Without steady funding, domestic apps struggle to introduce new features, reward creators, or invest in user growth—all of which are essential for attracting advertisers and retaining users. Koo is a case in point. Despite raising about $70 million across seven funding rounds, the platform failed to monetise effectively and was unable to secure new investors, eventually shutting down amid a prolonged funding winter.

Vernacular edge

So what can Indian players do differently to build sustainable social media platforms? Developing platforms in local languages and promoting regional content represent a massive untapped opportunity.

Estimates suggest that nearly 98% of internet users accessed content in regional languages in 2024, and even in urban India, 57% preferred local-language content.

If platforms can attract and retain these users, they could revive investor interest in the sector. However, a language-first approach alone may not ensure success. Creating separate ecosystems for different languages risks fragmenting the user base instead of expanding it. The real opportunity lies in building platforms that are vernacular-friendly but not vernacular-exclusive by integrating AI-based translation, smart discovery, and mixed-language content feeds.

To achieve scale, these platforms must offer a simple and seamless interface on affordable phones, reach new internet users, and establish viable business models through advertising, digital payments, enterprise versions for small and medium businesses, and stronger engagement with local creators.

Regular updates and new features will be essential to keep users engaged and relevant in India’s fast-evolving digital landscape.

Puneet Kumar Arora is an assistant professor of economics at Delhi Technological University. Jaydeep Mukherjee is a professor of economics at Shiv Nadar University, Chennai.