Post-TikTok Ban: Why Indian Short-Video Startups Lost to IG Reels & YT Shorts

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June 2020:

- India bans TikTok

- 200M+ users vanish overnight

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What followed looked like a gold rush

Homegrown players like Moj, Josh, MX TakaTak, Chingari, Roposo, Mitron, Tiki, Trell & others sprinted to fill the void

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Some saw explosive early growth:

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- Moj hit 160M MAUs within a year

- Josh reached 179M MAUs by FY24 via phone pre-installs

- MX TakaTak crossed 150M MAUs before its $600–700M merger with Moj

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By mid 2024, IG Reels became India’s most-watched digital format, & YT Shorts touched nearly every 18–44 YO online

Why did Indian apps falter despite early momentum?

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1) Capital Crunch & High Burn:

VC funding dried up post-2022. Without capital, platforms couldn’t sustain content creator payouts, premium music licensing, or AI infrastructure

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2) Inferior AI Recommendation Engines:

TikTok’s success was built on hyper-personalisation. Indian rivals lacked the deep data and ML velocity needed to serve sticky, niche content feeds

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3) Broken Content Creator Trust:

Cash contests, crypto tokens, and inconsistent monetisation led creators to seek stability offered by Reels & Shorts

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4) Distribution Disadvantage:

Instagram and YouTube were pre-installed. Indian apps required 50–100 MB downloads too heavy for Tier-2 Bharat with low storage phones

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5) Safety & Brand Trust Gaps:

Weak moderation, pirated music, and Play Store takedowns (Mitron) eroded advertiser confidence

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6) Market Consolidation:

ShareChat acquired MX TakaTak. Others like Tiki, Mitron, and Trell exited, Innovation stalled

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How REELS Won the Game:

* Leveraged Instagram’s 600M+ Indian users

* Embedded in Stories, Explore, Feed—no extra app needed

* Meta’s AI + music deals + creator bonuses + Bollywood collabs = scale + trust + earnings

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Why SHORTS Took Second Place

* Early-mover beta in India (Sept 2020)

* Ecosystem gravity: 80% of Indians already on YouTube

* Strong monetisation + discoverability via Google surfaces

* Cross-device reach (TVs + mobile) is unmatched

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What Happened to Indian Startups?

1) Moj: DAUs fell 25%; acquisition value written down

2) Josh: Pre-installs inflated reach, but monetisation < ₹200 crore/year

3) Chingari: Crypto rewards failed during token crash

4) Roposo: Pivoted to live commerce, exited short video

5) Trell, Mitron, Tiki: Shutdowns, layoffs, and controversy

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Key Insights for the Next Building For Bharat:

1) Don’t fight the giants—own a niche.

2) Hardware and telco partnerships matter.

3) Monetisation must go beyond ads.

4) AI isn’t optional, it’s table stakes.

5) Trust and safety build brand alliances.

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What’s Next?

India has 35 lakh+ short-video creators but only 2% earn sustainably

The opportunity is massive, Redseer estimates this market could grow from ~$200M today to $8–12B by 2030

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