Redseer Report - Demystifying India's SFV Platforms

Demystifying
India’s SFV platforms
Monetizability of users, content
excellence, and brand partnerships
© 2023 Redseer Strategy Consultants Conﬁdential and Proprietary Information
Dubai. Bangalore. Delhi. Mumbai. Singapore. New York
November 2023

© Redseer 02
Table of Content
1.1
1.2
1.3
1.4
1.5
Content is the 'Hero and Hook' for the massive monetizable user base
Breadth of content on Indian SFV platforms is in line with user preferences
Quality of content on Indian SFV platforms remains high
Content moderation on Indian SFV apps is comparable to global benchmarks
User experience on Indian SFV apps has been satisfactory
2.1
2.2
2.3
2.4
2.5
Large Pool of Users and Engagement is Driven by Original, Relatable and Safe (ORS) Content
3.1
3.2
The UGC Influencer Effect in India: Brand Campaigns, Commerce, and Trends
Video advertising is the fastest-growing ad format
SFV platforms are currently in the early days of platform monetization through
ads and influencer marketing
Consumer brands increasingly find Indian SFV platforms as cost-effective ad channels
Platforms featuring non-intrusive ads are yielding increased CTRs
Within Indian SFVs, influencer marketing is gaining momentum
4.1
4.2
4.3
4.4
4.5
Consumer Brands are Embracing SFV Platforms as a Good Option for
Reaching Out to Bharat Users
UGC ecosystem in India boasts of ~3.5 Mn influencers across 4 archetypes
The maturing ecosystem has created sustainable earning opportunities for influencers
India SFV Platforms Have Ever-Growing Large Pool of Monetizable Userbase
Tier 2+ Bharat users account for a whopping ~70% of all online transactors in India
TikTok ban skyrocketed SFV users as popularity of bite-size entertainment was on the rise
SFV users are interacting across different platforms, from gaming to digital commerce
SFV users are interacting across different platforms, from gaming to digital commerce
Indian SFV users present a tremendous monetization opportunity for digital platforms
1.0
2.0
3.0
4.0

© Redseer 03
Executive Summary
India SFV platforms have
“ever-growing” large
pool of “monetizable
userbase”
Bharat focused platforms have universal appeal in the country; This
geographic segment (Tier-2+) accounts for ~70% of all online
transactors
With bite-sized entertainment on the go, India SFV userbase (250+ Mn
currently) skyrocketed post the TikTok ban; 65-70% of these users are
from Tier-2+ cities
Majority of users on Bharat focused India SFV platforms have
disposable income and are monetizable
Our customer research indicated that 50%+ users of India SFV platform are from
middle to high income households; They have disposable income and are monetizable
User on India SFV platforms spend time on diverse set of internet platforms like
shopping online, online gaming and OTT video streaming
40% of India SFV users transacts online, creating a robust monetization opportunity
for digital platforms
1.
2.
3.
Josh is the market leader amongst India SFV platforms in terms of
monthly active users, as of 2023YTD
4.
Large pool of users and
engagement is driven by
original, relatable and
safe (ORS) content
In a UGC platform like SFV, where content is the “hero and hook” for
users, Indian players have been able to maintain original, relevant and
safe content on their SFV platforms;
Original content display continued to grow; ~99% original content in 2023 as compared
to ~92% in 2022
~70% of contents on India SFV platforms were found relevant to the genre selected;
relevant content on market leader (in terms of MAU) in India SFV platforms
Quality of content on these platforms remain high, with inflammatory content share
less than 0.5%; Our assessment shows that moderation mechanisms on India SFV apps
are comparable to global benchmarks
1.
With original, relevant and non-inflammatory contents for users, India
SFV platforms are rated high on net positive customer sentiment;
average NPS of India SFV platform is ~55% and for market leader, Josh,
is ~62%
2.
85%+ users of India SFV users indicated that they either have never seen or rarely
encounter inflammatory content on the app

Executive Summary
The UGC Influencer
Effect in India: Brand
Campaigns, Commerce,
and Trends
With rising popularity of UGC content platforms, an ecosystem with 3.5
Mn new-age celebrities/ influencers emerged, becoming the engine of
growth of SFV platforms, shaping trends and influencing purchase
decisions for masses
Influencers on India SFV platforms create diverse set of original & unique content and
garners massive followings, as their popularity grows on the platform, they monetize
through advertising and live commerce
With ecosystem evolving and brands embracing the power of new-age influencers,
they are able to earn sustainably; elite influencers on India SFV are able to make an
average of INR 1.5-2 L per month
Influencers are beginning to wield influence, are shaping trends & influencing
purchasing decisions; same as how it all began in China, the flagbearer in SFV market,
3-4 years ago
1.
Brands are increasingly leveraging influencers in campaigns and “video
commerce (e.g. Amazon Live in India)” by influencer collaborations. SFV
platforms have been aggressively focusing on “Creator Studio”, where
they focus on creating new-age celebrities our of influencers
2.
Consumer brands are
embracing SFV
platforms as a good
option for reaching out
to Bharat users
Media & entertainment platforms serve as gateways for users to access
the digital realm; With massive userbase, Indian SFV platforms are
emerging as a viable option for branding and targeting Bharat users
1.
Consumer brands are increasingly embracing SFV platforms for
advertising and are leveraging the platforms through a variety of ad
formats
2.
In our interaction with consumer brands advertising on India SFV
platforms, they found these platforms as cost-effective channel for
reaching out to users; BPC and Fashion brands have found them most
economical
3.
As brands use India SFV platforms for accessing its massive pool of
users, we expect it to emerge as viable choice for advertisers
4.
© Redseer 04

There is significant opportunity on Indian SFV
platforms for brands looking to reach Bharat users.
A sizable userbase of these platforms reside in Tier
2+ and rural regions and over 100 Mn users of these
platforms transact online.
Users from Tier 2+ and rural significantly outnumber
their metro and Tier 1 counterparts across the
internet funnel.
India SFV Platforms Have Ever-Growing
Large Pool of Monetizable Userbase
India's Short-Form Video (SFV) platforms have
experienced a rapid surge in their user base. These
users are spending significant time on the platform
and transacting across diverse internet sectors.
The internet landscape in India encompasses a vast
user base of an estimated 750-800 Mn users, which
~54% users engaging with UGC platforms and ~45%
users transacting online.
From content to eCommerce, Bharat-focused
platforms have a universal appeal in the country.
Young and middle-aged individuals aged 18-45
dominate the social media landscape, constituting
approximately 80% of the user base. The affinity of
younger users for bite-sized, short-form content is
on a steady ascent with individuals under 30 years
of age, representing roughly 75% of the user base. In
contrast, users aged 30 and above show a strong
preference for local and vernacular news
accounting for about 60% of active users.
1.1 Tier 2+ Bharat users account for a whopping ~70% of all online transactors in India
1.0
© Redseer 05
India Internet funnel
In Mn, FY 2023
UGC user funnel – Tier wise split
In %, FY 23
Overall Internet
Users
Smartphone
users
UGC Users
(Social media + SFV)
Online Transactors¹
FY 2023
750-800
630-650
400-450
330-380
10%
11%
14% 12%
10%
17%
23%
23%
23%
25%
61%
59%
51%
48%
7%
7%
Most preferred apps by Bharat users
Global Players Indian Players
Source(s): Redseer Research, Redseer Analysis
Note(s): 1. Online Transactors are those who make digital payments using UPI 2. Metro consists of top 9 cities with population > 50 L
3. Tier 1 includes cities with population of 10 L – 50 L 4. Tier 2+ includes other urban towns with population of 10k – 10L 5. Rural includes towns with population < 10k
Metro Tier 1 Tier 2+
(incl. Urban towns)
Rural

The growth was primarily driven by Indian
short-form video platforms cultivating a
high-quality creator base and creation of localised
and regional content. Platforms launched creator
programs and fostered collaborations with
celebrities, effectively attracting and onboarding
local talent onto their platforms. These creators
created localized and regional content, leading to
the onboarding of substantial semiurban and rural
userbase.
With 65-70% users residing in Tier 2+ cities, the
composition of Indian SFV userbase is a reflection
of the nation's population distribution. as opposed
to the global apps, where users are primarily from
Metro, Tier 1 cities.
Furthermore, Indian SFV users display a heightened
level of engagement on the platforms, with the
average user spending over an hour daily on these
platforms. Also, over 58% of the survey respondents
reported an increase in their SFV usage over the
past six months, indicating significant user
satisfaction with these platforms.
Following the TikTok ban, the landscape of bite-sized
entertainment in India witnessed a remarkable shift.
Several Indian short-form video platforms emerged
swiftly filling the void left by TikTok's absence in the
content ecosystem. The rapid user growth that
followed surpassed TikTok's numbers within just
three months.
1.2 TikTok ban skyrocketed SFV users as popularity of bite-size entertainment was on the rise
1.3 User mix on SFV platforms mirror
population of India
© Redseer 06
Pre-TikTok Ban
Monthly
Active
Users
(in
Mn)
Growth of Indian SFVs
250
200
150
100
50
01/19 07/19 01/20 07/20 01/21 07/21 01/22 07/22 01/23 07/23
Note(s):: 1. April 2019 has been indexed to 100 and all MAUS have been calculated accordingly
While gaming platforms attract only 57% of these
users, over 90% of them are simultaneously active
on various other digital platforms. However, their
time spent on each platform varies, with Indian SFV
users spending the maximum time on internet
watching shortform videos.
Indian SFV users actively engage with a wide array
of internet platforms. Their multifaceted
engagement extends from social media and
messaging apps to e-commerce, OTT, and online
gaming.
1.4 SFV users are interacting across different platforms, from gaming to digital commerce
MAUs of SFV platforms in India
2019 Indexed to 100, CY 2019 - Q1 CY 2023

© Redseer 07
A closer examination of the Indian SFV user
demographics reveals that roughly 60% of them
belong to the mid to high-income brackets.
Notably, the userbase also demonstrates a
heightened propensity for discretionary spending,
with over 60% of users dedicating more than 10% of
their income to such expenditures.
1.5 Indian SFV users present a tremendous monetization opportunity for digital platforms
Indian SFV Users– Split by Income
In %, FY 2023
Indian SFV Users –% income
available for discretionary spends¹
In %, FY 2023
12L+
6-12L
3-6L
1.8-3L
Less than 1 .8L
User mix - by
hoursehold income
~60% of SFV users are in the mid
income to high income cohorts
>50%
35-50%
10-35%
< 10%
User mix by
discretionary spend
as % of income
>60% of users allocate >10% of
their income for discretionary
spending
4%
15%
40%
29%
11%
3%
100%
12%
45%
40%
Note(s): 1. Discretionary spends refer to non-essential purchases or activities that are notessential for the basic needs and can include items such as entertainment, dining out,
shopping for non-essential goods, hobbies, travel, and other non-essential activities.
Indian SFV User – Overlap with other internet sectors
In %, N= 820, N varies by sector
Source(s): Consumer Survey, Redseer Analysis
Note(s): 1. The amount of time individuals who use a particular digital platform spend on it per day.
% of India SFV users using other digital platforms
Time spent per user by type of platform/ day1
100% 100% 100%
97% 91% 91% 83%
57%
1 .2
1 .0
0 .8
0 .6
0 .4
0 .2
0 .0
Average
time
spend
per
user
per
day
(in
Hrs)
“I am spending 1-2 hours per day on short videos,
and 1-2 hours on OTT. My time on video/reel apps
has significantly increased over the last 1 year.”
-Female, 25 y/o, Patna
“I think I’m in love with short videos and I spend
close to 3-4 hours per day on these apps. I also
upload videos, so it takes a lot of time in editing
these.”
-Female, 18 y/o, Jabalpur
“50% of my time on internet goes into scrolling &
watching content. I sometimes even end up buying
the products I see while scrolling”
-Male, 28 y/o, Kanpur
SFV
platforms
Social
Media
Messaging E-
Commerce
OTT
Video
Web
browsing
OTT
Audio
Online
Gaming
User Speaks
Digital
media
usage
behavior
of
India
SFV
users
(%
India
SFV
users)
Type of digital platforms

© Redseer 08
With a large monetizable userbase and the
average user spending ~1.2 hours per day on SFV
platforms, there is a potential for newer
monetization models such as live commerce and
live gifting.
Furthermore, ~40% of Indian SFV users transact
online. Over 50% of the survey respondents who
transacted online engaged in eCommerce and
purchased goods across sectors such as fashion,
BPC, and grocery.
~3% of the Indian SFV users were mature internet
users. While the share of mature internet users1
is
currently low due to higher share of young (25
years old) tier 2+ users, it is expected to increase
going forward.
Note(s): 1.Transactors are those who buy standardized and low-involvement product online and make a few digital payments, use e-commerce, online food ordering,
online ticketing and e-grocery along with M&E 2. Mature Users are Frequent online service users, 50%+ of wallet spent online and use the internet for other
mature internet services such as healthcare and insurance and high value purchases online along with transactions & M&E.
Indian SFV users - Monetizable Bharat userbase
In Mn, FY23
Mature users
~7 Mn
Transactors¹
~94 Mn
Explorers²
~151 Mn
~65 Mn Indian SFV users residing in Tier 2+ and rural
centres transact online
8%
(1)
48%
(7)
44%
(19)
Metro Tier 1 Tier 2+ Rural
7%
(1)
45%
(17)
48%
(18)
3%
(2)
40%
(25)
57%
(36)
65%
(71)
33%
(36)
~43 Mn ~38 Mn ~63 Mn ~109 Mn
2%
(3)
With Tier 2+ and Rural centers combined,
the digital platforms have an opportunity
to monetize ~65 Mn Indian SFV users
who transact online.

Key growth attributes for these platforms include
abundant and non-repetitive original content,
precise content relevance, and low inflammatory
and plagiarized content.
Large pool of users and engagement is
driven by original, relatable and safe (ORS) content
Indian SFV platforms are driving growth through
original, relatable, and secure content offering,
enhancing user experience.
2.0
09
2.1 Content is the 'Hero and Hook' for the massive monetizable user base
An analysis of real time feed data (~120000 videos
per year) indicate that the original¹ content
percentage has increased significantly with over
99% original content on every refresh during
Jan-Aug 2023 compared to 92% original content in
CY 2022. Low content repetition and availability of
fresh content would eventually lead to higher user
engagement with the platforms.
With a flourishing user base and a maturing creator
ecosystem, the display of original content on India's
SFV platforms continues to grow. Several key
takeaways underscore this trend. Indian SFV
platforms feature a diverse creator community,
spanning various genres and offering a wide array of
content. Moreover, these platforms employ robust
recommendation engines, ensuring a consistent
stream of fresh content with each feed refresh.
Characteristics of content on India SFV platforms
Descriptive
Content aligning with the
overall interests and
preferences of the users
Adapting content to mirror
the user’s current mind space
Note(s): 1. Original content is the content that is not getting repeated post refresh
Key Growth Drivers of SFVs
Indian SFV platforms are driving growth with abundance of original, relatable and safe (ORS) content coupled with enhanced user
experience
1. Original Content 2. Content Relevance 3. Content Quality
4. Efforts taken
by platforms
Abundance of content across
genres of user preference
Low content repetition when
engaging with the platforms
Content aligning with the
overall interests and
preferences of the users
Adapting content to mirror
the user’s current mind space
Low inflammatory & NSFW
content
Low plagiarized content from
competing platforms
Good recommendation engine
leading to high content
personalization
High Quality UI/UX
© Redseer

The breadth of content accurately aligns with user
preferences, with comedy, music/singing/dance,
and dialogue/action occupying top ranks in user
interest. The recommendation engines of different
platforms adeptly curate the content to favour
these popular genres. Additionally, Indian SFV
platforms offer a rich diversity of content across
various genres, ensuring a comprehensive content
library.
2.2 Breadth of content on Indian SFV platforms is in line with user preferences
19%
19%
20%
Content Breadth¹
(Expanse of each genre within a platform) - Overall
In % of content feed, N= ~50,000 videos, Jan-Aug 2023
Comedy
Music/Singing/Dance
Dialogue/Acting
Decreasing
order
of
popularity
2
Fashion
Art
Motivation
Fitness
3%
2%
3%
2%
Note(s): 1. Content breadth refers to the expanse of each genre preference in each platform. It is calculated by randomly scrolling through 50,000 videos equally distributed across platforms
and understanding how much of each genre type was visible in each platforms. 2. Decreasing order of popularity is based on consumer survey
© Redseer 10
content being displayed to new users, leading to
better new user retention.
Higher content breadth across popular genres
would ensure a higher probability of relevant

analyzed by genre, gives a measure of the alignment
between users' preferred genres and the
presentation of content from those genres.
Further, content relevance across India's SFV
platforms typically falls within the ~80% range, with
Indian SFV leader achieving notably high levels of
over 85% for several genres. Content relevance,
The accuracy of ML/NLP algorithms further enables
the recommendation engine of the platforms to
deliver content with higher relevance. Furthermore,
the implementation of continuous learning
mechanisms basis user feedback is expected to
enhance content relevance further, offering
real-time algorithm updates that improve the
accuracy of content tagging. This heightened
content relevance, particularly in alignment with
user preferences across various genres, ultimately
results in elevated user satisfaction.
Overall, the Indian SFV leader maintains an average
content relevance of 81%, which is approximately
10% higher than its closest competitor. The elevated
content relevance can be attributed to two factors.
First, collaborative content tagging practices are
embraced on Indian SFV platforms, which combine
manual content tagging by creators with the
utilization of in-house machine learning (ML) and
natural language processing (NLP) algorithms to
ensure accurate genre tagging of videos.
© Redseer 11
Content Relevance – By Genre (Platform-wise)
In %, N= ~30,000 videos for each platform, Jan-Aug 2023
Source(s): Indian SFV App Testing, Redseer Analysis
Note(s):: 1. Content relevance by genre evaluates how often content belonging to a particular genre is presented in line with the user's chosen genre preference.
2. Others include genres such as motivation, fitness, food, prank and gaming
Leader
81%
Overall Comedy Music/
Singing
/Dance
Fashion Art Dialogue/
Acting
Others2
68% 75%74%
78%
74%
85%
89%
74%76% 74%
65%
55%
87%
72%
67%
71% 71%
69%
75%
72%
Decreasing order of popularity
Challenger Laggard

However, as users engage more with the platform,
machine learning algorithms gain a deeper
understanding of individual user profiles.
Consequently, there is a notable reduction in the
prevalence of inflammatory content within a user's
feed.
Indian SFV platforms enforce stringent content
moderation mechanisms, with the proportion of
inflammatory1
content remaining low at less than
0.5%. New users often encounter a higher display of
inflammatory content due to algorithmic bias, as
such content often garners increased user
engagement.
as is the case with certain genres having a higher
likelihood of being associated with such content.
Second, the effect of collaborative filtering
contributes to the increased visibility of
inflammatory content among users who fall into
specific archetypes, increasing its reach among this
subset of users.
Further, over 85% of our survey respondents
reported that they either never came across or
rarely encountered inflammatory content on the
platforms. Although the prevalence of inflammatory
content remains limited across most platforms, a
smaller subset of users may be exposed to it for a
few reasons. First, there are instances of
mis-tagged content, where genres associated with
inflammatory content are occasionally mis-labeled,
2.3 Quality of content on Indian SFV platforms remains high
© Redseer 12
Q. Do you find any inflammatory content while scrolling on your preferred SFV platform?
N= 820
Total Never Rarely (only on
rare occasions)
Occasionally
(After 15-20 videos)
Frequently (After
every 5 videos)
100%
3%
63%
23%
12%
>85% of the user either
don’t see or rarely see any
inflammatory content
Source(s): Indian SFV App testing, Indian SFV App user survey
Note(s): 1. Inflammatory Content - % of content in the industry that is inflammatory (content that involves violence, nudity, racial discrimination, vulgar, etc.)
Their content moderation mechanisms are in line
with global benchmarks characterized by a
multifaceted approach.
Indian SFV platforms are making dedicated
investments to uphold the standards of quality
content within their apps.
2.4 Content moderation on Indian SFV apps are comparable to global benchmarks
User Speaks
“I am using these apps since last 3 months and
most of the time I watch videos of fashion &
beauty creators. I have never encountered any
inflammatory content.”
-Female, Tier-2+
“I used to see instances of inappropriate content
on Indian SFV apps. It reduced significantly after
I reported the inappropriate content. Now I rarely
see such content”
-Male, Tier-2+
“I love watching comedy content on Josh, and
me & my friend upload videos on trending
topics. Lately I have not seen any inappropriate
video on the feed,“
-Male, Tier-1

© Redseer 13
Source(s): Expert discussions, Redseer Research, Redseer Analysis
Efforts taken by SFV platforms - China vs India
Automated AI/ML screening models
Penalizing
Continuous feedback loop for machines
Human review
Audio scanning to check for inflammatory content basis keywords and phrases
Audio and video scanning for copied content (inter and intra platform)
Video scanning to check for inflammatory content basis in-house guidelines
(Visuals and patterns)
All machine flagged videos
All user reported videos
Degree of penalizing
Continuous learning to upgrade the algorithm
Inter & intra platform
Complete ban if
inflammatory else
unbiased distribution
All flagged videos
Only intra platform
Selected videos
Partial/restricted
distribution basis
degree of penalty
In China, all viral videos undergo strict human review
due to higher level of mandated moderation
2.5 User experience on Indian SFV apps has been satisfactory
Indian SFV platforms being consistently positive
across various key parameters.
Quality content coupled with robust app
features/experience has led to user experience on
Q. On a scale of 1 to 10, rate the SFV apps on the following parameters
(where 10 being the highest satisfaction, 1 being the lowest satisfaction)
N= 820
Source(s): Indian SFV App user survey, Redseer Analysis
Note(s): 1. Decreasing order of popularity is based on consumer survey
Quality of Content
(Original, Relatable & Diverse)
Personalisation
UI/UX
(Ease of Use, App Design, etc.)
Regional Content
Quality of Influencers
(Popularity, Relatability, Activity)
Feed Search filters
Content Loading time
Data Privacy
Leader
Challenger
Laggard
Decreasing
order
of
popularity¹
0.0 0.2 0.4 0.6 6.8 7.0 7.2 7.4 7.6 7.8 8.0 8.2 8.4 8.6
China India

© Redseer 14
While the market leader outperformed its
competitors in seven out of the top eight metrics,
the challenger platform has also performed well,
earning a rating exceeding 8 across a multiple
parameters.
India SFV user Net Promoter Score (NPS)
Q.On a scale of 0-10, how likely are you to recommend this app to your friends/family?
55%
51%
47%
55%
Audio Series OTT Video Indian SFV
Real money
gaming
N = 903 N = 834 N = 860 N = 840
Note(s): 1. Net Promoter Score (NPS) breakdown : Ratings 0-6 = Detractors.7-8 = Passives, 9-10 = Promoters�2. Net Promoter Score formula : % total Promoters — % total Detractors.
Source(s): Indian SFV App user survey, RedSeer IP, Redseer Analysis
Indian SFV platforms have an overall positive
perception shaped by the abundance of content,
the effectiveness of the ML algorithms, and a robust
recommendation engine that consistently delivers
fresh, relevant, and quality content, notably devoid
of any inflammatory material.
Increased user satisfaction across multiple key
parameters has significantly contributed to a
heightened overall net positive customer sentiment
surrounding Indian SFV platforms. In comparison to
other entertainment avenues like real money
gaming, OTT video, and audio series, Indian SFV
platforms exhibit an average Net Promoter Score
(NPS) of 55%, positioning them closely alongside or
even surpassing the other content platform. It's
essential to note that the leading platform has NPS
of 62%, indicating strong user endorsement for the
platform.
Leader
Promotor
Neutral
Detractor
NPS
Laggard
Challenger
67%
28%
5%
62% 55% 7%
62%
31%
7%
23%
61%
16%
"I genuinely love how short videos keep me
entertained and always presents content
that I can relate with”
- Female, 24 y/o, Mumbai
“When I started using shortform video app, the
content was not that good. After spending
some time on it, the recommendation started
getting better”
- Male, 35 y/o, Surat
User Speaks

3.1 UGC ecosystem in India boasts of ~3.5 Mn influencers across 4 archetypes
The extensive reach of such content is
subsequently unlocking the realm of influencer
marketing for brands and offering a consistent and
sustainable source of income for content creators.
The creation of the first viral video with relevant tags
marks a turning point in the journey of the creator
as that leads to enhanced audience engagement for
the subsequent videos due to improved
recommendation targeting. Further, with increasing
influencer popularity and brand partnerships,
optimizing reach and engagement of the creator
becomes a collaborative responsibility shared by
both the platform and the creator.
The UGC Influencer Effect in India:
Brand Campaigns, Commerce, and Trends
The surge in user-generated content (UGC), driven
by the Short-Form Video (SFV) landscape, paved the
way for the rising influencer ecosystem. Within this
ecosystem, creators craft varied formats of content
across various platforms, capturing the attention of
a massive userbase.
India's UGC ecosystem comprises approximately 3.5
Mn influencers, segmented into four archetypes
basis the number of followers: Micro, Macro, Mega,
and Elite. Influencers typically progress through
distinct phases in their creator journey. During their
initial foray, they encounter challenges in content
identification for relevant audience engagement.
This includes product placements, affiliate
marketing, giveaways, contests, and live
streaming/live commerce events, enabling brands
to tap into influencer-driven marketing strategies.
In turn, influencers harness multiple monetization
opportunities, including platform payouts based on
campaigns and promotions, brand payouts for
endorsements, and live gifting from their followers.
The progression within influencer archetypes
demonstrates a notable trend of halving transition
times as influencers advance through archetypes.
While this transition is accompanied by a decline in
reach and engagement rates from micro to elite
influencers, the substantial increase in followers
effectively compensates for the numerical
difference.
The influencers typically promote brands on their
pages through advertising campaigns and live
commerce, offering brands an array of innovative
avenues for advertising.
3.0
© Redseer 15
Size & Type of UGC Creators – Across M&E Platforms
In #, FY 2023
Source(s): HypeAuditor, Expert Interactions, Redseer Research
Note(s): 1. Reach Rate refers to the total reach of a post divided by the number of followers a person has.
2. Engagement rate is the avg likes/comments/shares per post out of the total reach or unique views
3.5-4 Mn 2.5-3 Mn
0.5-0.6 Mn
~21 K
~500
Elite
(>10Mn
Followers)
Total Micro
(10k-100k
Followers)
Macro
(100K-1Mn
Followers)
Mega
(1Mn-10Mn
Followers)
Reach Rate¹
(%)
Engagement
Rate² (%)
10-12%
14-16%
6-8%
8-9%
4-5%
4-5%
4-6%
1-3%
Avg transition
time to next tier
12 months
3 months
6 months

© Redseer 16
Within this influencer marketing framework, the
influencers earn through platform payouts, brand
deals, and virtual gifting.
With the maturing influencer ecosystem,
influencers have been able to earn a sustainable
income.
3.2 The maturing ecosystem has created sustainable earning opportunities for influencers
Influencer case study - China
Key Monetization opportunity on Indian SFVs– By Creator type
Descriptive, 2023, Per month
Source(s): Expert Discussion, Redseer Analysis
Note(s): 1. Platform payouts include payments by the SFV platforms to the creators for campaigns run by the platforms, challenges among others
Typical Earnings– By Creator type
In INR 000’ per Month, 2023
Micro
(10K- 100K
Followers)
INR 0.8k-1.2k INR 5k-7k INR 20k-30k INR 60k-80k
Platform
payouts¹
Nil
No. of deals
– 3-5
Value/deal -
INR 3k-3.5k
No. of deals
– 6-8
Value/deal -
INR 5k-6k
No. of deals
– 8-10
Value/deal -
INR 7k-7.5k
Brand Deals
Nil
No. of Live
sessions – 8
Value of gifts
/session –
INR 0.5k-1k
No. of Live
sessions ~ 6-7
Value of gifts/
session –
INR 2k-3k
No. of Live
sessions ~ 5-6
Value of gifts/
session – INR
5k-7k
Virtual Gifting
Macro
(100K- 1Mn
Followers)
Mega
(1Mn- 10Mn
Followers)
Elite
(> 10Mn
Followers)
Platform
payout
Brand Deals
Micro Macro Mega
Elite
Virtual Gifting
0.8-1 .2 25-30 60-70 150-200
100%
23%
58%
19%
18%
45%
37%
19%
38%
44%
Elite & Mega creators consider content creation
as their primary profession
Micro-influencers predominantly rely on platform
payouts for their earnings as their popularity
doesn't elicit brand deals or virtual gifts.
As the creators further ascend influencer tiers, their
income diversifies to include a substantial portion of
brand deals, alongside platform payouts and virtual
gifting. Typical elite influencers on the platforms
earn upwards of INR 1.5-2 lakhs each month!
Case Study – Li Jiaqi
Descriptive
(76 Million followers on Taobao)
The Lipstick King
2015 Li Jiaqi was a sales assistant for L'Oréal
2018 Sold lipsticks more than 15000 lipsticks
worth US$ 145 million in less than an hour
2020 Sold consumer goods worth US$ 600
million on Singles day
2022
Generated ~60 million views in a surprise
livestream and sold ~US$ 18 million worth
products Guinness World Record Holder for “the most lipstick
applications to models in 30 seconds”

© Redseer 17
Eshan Masih, a notable figure featured on the
popular reality TV series 'India's Got Talent’, was
onboarded by Indian SFV platform, Josh.
He witnessed a meteoric rise in following, amassing
100,000 followers in just five days. His impressive
journey began with an initial platform payout of 4
lakhs, earned through campaigns, activities, and
contests.
0-250k
2 weeks 1 month 8 months 6 months
4 lakhs 4-5 lakhs 5-6 lakhs > 7 lakhs
Time Taken
Followers
Key
Milestones
Featured on
India's got Talent
100k+ followers
within 5 days
Viral videos
reaching up to
5 – 6 Mn views
Less than 3
months to reach
5 Mn+ followers
Followers
increased at a
rate of 1.5 Mn/
month
Collaboration for
songs with movie
stars
2M+ likes on
viral posts
High platform
payouts basis
campaigns,
activities,
contests
Platform payout
of ~4 lakhs for
regular posts
and promotions
Up to 25k
payout for Josh
challenges
Additional brand
deals with big
brands like Coke
4-5 song
promotions with
50-80k payout
for each
Total monthly
earnings
Monetization
Opportunity
250k-1Mn 1-10 Mn 10-50 Mn
Source(s): Creator IDIs, Redseer Analysis
Creator Growth Journey
Creator Success Story on Indian SFV platform

© Redseer 18
Consumer Brands are Embracing SFV Platforms as a
Good Option for Reaching Out to Bharat Users
4.0
The rapid growth of video advertising has led
consumer brands to recognize SFV platforms as a
cost-efficient avenue to connect with their target
audience. As a result, they are increasingly turning
to these platforms for effective outreach strategies.
Media and Entertainment (M&E) platforms play a
crucial role in introducing Bharat users to the digital
world. They serve as a gateway, guiding users on
their journey from digital novices to experienced
transactors.
India's digital advertising landscape encompasses an array of platforms spanning search, social media,
eCommerce, gaming, and various content mediums. While the Alphabet and Meta Ecosystem undeniably exert a
dominant influence in the digital ads market, the content segment has consistently emerged as the
fastest-growing ad platform within this diverse mix.
First, the growing popularity of eCommerce as a
platform for search advertising has led brands to
shift away from traditional platforms due to
improved ad performance metrics.
Secondly, 'funding winter' in the startup ecosystem
has prompted startups to prioritize profitability,
resulting in reduced advertising expenditures.
Lastly, regulatory changes in the real-money
gaming (RMG) landscape, including a 28% GST on the
face value, have introduced various tax
complications and caused gaming platforms, which
were significant contributors in the past, to limit or
freeze their ad spending.
A look at the digital advertisement market reveals
that video advertising is poised to witness the
highest growth rate at ~18%. While YouTube and
Meta command a significant share of the video
advertising domain, it is anticipated that content's
contribution will rise, particularly with an increasing
emphasis on Bharat.
While the advertising market experienced rapid
growth until FY22, there has been a noticeable
slowdown in growth in FY23, and this trend is
expected to persist in the future. The muted growth
continues in FY24 due to three key factors
4.1 Video advertising is the fastest-growing ad format
Digital advertising market in India - by ecosystem of
platforms
FY 21 – FY 23F, USD Bn
Alphabet & Meta
Ecosystem
eCommerce Gaming
India digital advertisement market by type of format
FY 21 – FY 28F, USD Bn
Search Display Video
Content
Others
$ 5
FY 21 FY 22 FY 23
FY 21 FY 22 FY 23 FY 28F
$ 8
~$ 8.5 - 9
6%
9%
7%
13%
65%
6%
9%
5%
13%
68%
~5%
10-12%
~5%
13-15%
65-68%
~18%
~11%
~8%
~$ 15
CAGR
(23 - 28F)
$ 8
$ 5
~$ 8.5 - 9
25%
40%
35%
27%
38%
35%
29%
38%
33%
37%
35%
28%
~11-12%
With the changing advertising landscape, will brands start looking for more
cost-effective micro targeting alternative line influencer marketing?
Key Options to Ponder

© Redseer 19
The Media and Entertainment (M&E) sector, which
encompasses digital content and gaming, is a
crucial gateway for users to access the digital
realm. The Indian SFV platforms specifically are
emerging as a viable means for brands to engage
with Bharat users. Consequently,
advertisers spanning various sectors, including
electronics, Beauty and Personal Care (BPC),
fashion, Fast-Moving Consumer Goods (FMCG), and
eCommerce, view Indian SFV platforms favourably.
Advertiser perceptions of SFV content align well
with business objectives, offering advantages in
branding, conversions, cost-effectiveness, and
targeted advertising.
SFV's favorability also surpasses alternatives like
Over-The-Top (OTT) content and gaming with regard
to the business objectives.
Indian SFV platforms are in the nascent stages of
monetization, focusing on ad revenue and influencer
marketing. They follow a trajectory similar to
TikTok's, driven by the flywheel effect that builds
momentum with content generation, influencer
development, and commercialization efforts. Indian
SFV platforms are have yet to reach the live
commerce phase.
Consumer brands are also progressively turning to
SFV platforms as channels for advertising-
harnessing diverse ad formats that encompass
video ads, display and banner ads, and
influencer-driven advertisements. These brands
leverage Indian SFV platforms for a variety of use
cases, spanning from brand promotion and raising
awareness to driving conversion rates.
4.2 SFV platforms are currently in early days of platform monetization
through ads and nfluencer marketing
Advertisers’ perception on various digital ad platforms
Indexing Alphabet and Meta Ecosystem to 10, N = 35 (Advertisers’ IDI)
Source(s): Brand IDIs
Note(s): 1. Conversion is either the conversion rate or CTR of the consumer depending on sector of the brand and type of advertisement
2. Decreasing order of preference is based on Advertisers’ IDI
Conversions¹
Branding
Cost effective
Good targeting
Data analytics
Quality userbase
Gaming OTT Content Indian SFV
DDecreasing
order
of
preference
6 7 8 9 10
Advertiser Sectors
Interviewed
Electronics Beauty &
Personal Care
Fashion E- Commerce FMCG
Brand Speaks
Google & Meta are our top choice due to its
massive reach and ability to optimize
campaigns effectively. This ensure
successful conversions for our brand
- Tier 2 focused Indian Mobility Player
Transparency and accurate tracking of
results are important to us but currently
gaming and SFV platforms lack the visibility
offered by Google Ad Analytics
- Indian clothing/innerwear brand
We usually prefer Indian SFVs to reach out
to a larger/Tier 2+ audience during big sale
events as we see high engagements on
these platforms
- Leading fashion e-commerce brand
In our branding campaigns, we usually need
a 15-30-second advertising slot, which is
not readily accessible on UGC platforms
-Leading FMCG brand in India
Meta & Alphabet
indexed to 10

© Redseer 20
Fashion, and BPC, it results in a broader and more
cost-efficient reach among users. Notably, CPMs on
Gaming platforms tend to be approximately 1.5
times higher than content platforms due to the
smaller, niche user base inherent to these platforms.
Indian SFV platforms have emerged as a
cost-effective channel for brands to engage with
their target audience. The Cost Per Mile (CPM) on
Indian SFVs is on par with Over-The-Top (OTT)
content platforms, spanning advertising sectors
including Fashion, Beauty and Personal Care (BPC),
Electronics, eCommerce., and FMCG. Since SFV
content is intrinsically aligned with sectors such as
The effectiveness of Indian SFVs can be attributed
to two key factors. Firstly, these platforms exhibit
effectiveness in reaching Bharat users as they have
a significant share of their time and attention.
Secondly, Indian SFV platforms are increasingly
considered integral channels within large-scale
branding and reach campaigns as they are
supported by substantial mindshare and
engagement among users. Consequently, they are
becoming the platform of choice for running
expansive and impactful campaigns.
4.3 Consumer brands increasingly find Indian SFV platforms as cost-effective ad channels
Cost per mile¹ (CPM) – by type of ad platform
In INR, H1-FY24
Note(s): 1. Cost per mile, or CPM, is a pricing model in programmatic advertising where you pay a certain amount for 1,000 impressions.
Gaming OTT Content Indian SFVs
500
400
300
200
100
0
CPM
(in
INR)
FMCG
Fashion
Advertiser sectors
BPC Electronics E-Commerce
SFV’s content is more aligned with
sectors like Fashion and BPC leading
to a higher and cost-efficient reach
among the users

© Redseer 21
For Indian SFVs, CTRs can be further augmented by
incorporating incentivized advertisements, a
strategy frequently observed on gaming platforms.
Platforms that integrate non-intrusive advertising
methods are witnessing a notable uptick in
Click-Through Rates (CTR).
The strategy also yields higher CTRs compared to
other content platforms. Despite their slightly lower
CTRs, the extensive reach of SFV platforms, coupled
with their lower Cost Per Mile (CPM), ultimately
translates into cost-effective Cost Per Click (CPC),
contributing to efficient conversions.
Gaming platforms excel in achieving high CTRs
through incentives where users are rewarded with
in-app purchases for engaging with ads. SFV
platforms generate higher conversions amongst
content platforms by engaging, concise, and
non-intrusive ads.
4.4 Platforms featuring non-intrusive ads are yielding increased CTRs
Click through rate (CTR)¹ – Split by platform
In %, FY 2023
Note(s):. 1. Click through rate or CTR is the total rate at which ads are clicked on.
Gaming OTT Content Indian SFVs
2.4%
2.2%
2.0%
1.8%
1.6%
1.4%
1.2%
1.0%
0.8%
0.6%
0.4%
0.2%
0.0%
FMCG
Fashion
Advertiser sectors
BPC Electronics E-Commerce
Engagement is similar across platforms for Fashion and BPC ads as they
usually are impulse purchases and do not require prior intent to buy

Conclusion
In conclusion, Bharat-focused SFV platforms have established a universal appeal in
India, presenting a lucrative monetization opportunity with a substantial user base. This
offers a promising avenue for brands to advertise on the platforms and harness
influencer marketing and venture into live commerce, unlocking the platform's full
potential.
However, to make this transition effective, addressing the inefficiencies and challenges
within the influencer marketing ecosystem is paramount. Adopting tech-first solutions
like the Influencer Marketplace can streamline these processes, ensuring transparent
and more efficient operations. By mitigating these challenges, the SFV platforms can
enhance their appeal to both brands and users.
© Redseer 22
Influencers have a significant impact on branding.
They have a unique skill set for crafting authentic,
credible, and engaging content that deeply
resonates with consumers, thus effectively
contributing to branding efforts.
Influencers offer several advantages to the brands:
4.5 Within Indian SFVs, influencer marketing is gaining momentum
Brand Awareness
Brands can leverage local influencers for precision.
This strategic approach ensures access to a
focused and niche vernacular audience, enhancing
the effectiveness of brand communication.
The influencer marketing ecosystem has long grappled with a series of inefficiencies, prompting the
adoption of a tech-first approach centered around 'influencer marketplaces’. Within the existing influencer
marketing landscape, several challenges, such as influencer discovery, coordination, price transparency, and
ad analytics inefficiencies, have persisted. In response to these challenges, the emergence of influencer
marketplaces has offered a compelling value proposition. The marketplaces offer a comprehensive selection
of diverse influencers, streamlined filtering options, centralized communication, transparent pricing, and
real-time campaign insights. They are able to successfully resolve existing issues and provide brands with
efficient and effective influencer collaboration for their marketing strategies.
2. Targeted Reach
Influencers have a significant impact on branding.
They have a unique skill set for crafting authentic,
credible, and engaging content that deeply
resonates with consumers, thus effectively
contributing to branding efforts.
3. Cost Efficiency
Video commerce is fast becoming effective in
Marketing. The growing trend is the utilization of
influencers for the promotion and sale of products
and services through video content.
4. Emerging Trend
1.
Challenges of Influencer marketing

© Redseer 22
Glossary – Definitions and Classifications
Term Definition Definition
Cities
Consumer
Types
Competition
Type
MAU
Metro The cities of Ahmedabad, Bangalore, Chennai, Delhi/ NCR, Hyderabad, Kolkata,
Mumbai and Pune, have been considered as Metro cities for the purpose of this
study
Tier 1 Tier 1 cities are non-metro cities with population of more than 1 million
Tier 2+ Tier 2+ cities are cities and urban towns with population between 10
thousand than 1 million
Rural
Explorers Explorers are internet users who do not transact online but online browse
the internet and use M&E platforms
Transactors Transactors are those who make a few digital payments and use e-commerce,
online food ordering, online ticketing and e-grocery along with M&E
Mature
Users
Mature Users are those use the internet for other mature internet services
such as healthcare and insurance and high value purchases online
along with transactions & M&E.
Leader
Monthly Active Users
Competition Players have been classified as leader, challenger and laggard based on the MAUs
Inflammatory
Content
Inflammatory Content - % of content in the industry that is inflammatory (content that
involves violence, nudity, racial discrimination, vulgar, etc.)
UGC User Generated Content
Reach rate The reach rate is the percentage of followers exposed to the content
Engagement
Rate
Engagement rate measures the percentage of followers interacting (including likes,
shares, comments, and clicks) with the content
Virtual Gifting Virtual gifting on content platforms involves users sending digital gifts, tokens,
currency to content creators as a form of appreciation or support
CPM "Cost Per Mille“ - cost of 1,000 impressions or views of an advertisement.
CTR "Click-Through Rate“ - the percentage of people who click on an ad after seeing it.
Top India SFV platform by MAU
Challenger #2 India SFV platform by MAU
Rural centers are village establishments with population less than 10 thousand
© Redseer 23

Authors
Anil Kumar Founding Partner
Anil Kumar is the Founder of Redseer Strategy Consulting. He has been part of
engagements in Internet, Private Equity, Retail CPG and Healthcare among others. He
specializes in growth and investment strategies. Anil is a believer of the data-driven
approach in solving business problems. His consulting approach leverages Data IP,
sector expertise and the client’s core hypothesis. He holds a B-tech from IIT Delhi. He
can be reached at anil@redseer.com
Mukesh Kumar Associate Partner
Mukesh Kumar is the Associate Partner at Redseer Strategy Consulting and has 9+
years of experience in growth strategy engagement across internet, education,
healthcare, and consumer products clients across India, MENA, and North America. He
holds a B.Tech from IIT Delhi.He can be reached at mukesh@redseerconsulting.com
Shashank Mohan Byrisetty Senior Consultant
Shashank Mohan has worked in Media & Entertainment, SaaS, & e-grocery space. He
brings project experience in index creation, DRHP assistance, long term strategy &
benchmarking. His most recent experience in M&E space includes expansion strategy
piece for a leading audio streaming platform. He holds an MBA from IIM Ahmedabad
and B.tech from IIT Kanpur. Contact: shashank.m@redseerconsulting.com
Nishchay Goyal Business Analyst
Nishchay has worked in multiple sectors, including eB2B, consumer durables &
electronics, ed-tech, etc. I have been involved in conducting field research and price
benchmarking to identify potential gaps in client’s sourcing & pricing and also had
some exposure to the, media and entertainment industry.
Varsha Santhanam Associate Consultant
Varsha has worked on engagements in Media & Entertainment, AgriTech, FoodTech
and D2C spaces. Her most recent experience in D2C space included a comprehensive
understanding of consumer behavior, market trends, & digital marketing techniques,
and leveraging data analytics in the retail sector. She has graduated from SRCC and
holds B.COM (H). She can be reached at varsha.s@redseerconsulting.com
© Redseer 24
Contact: Nishchay@redseerconsulting.com

Disclaimer
© Redseer 25
Copyright © Redseer Management Consulting Private Limited
(“Redseer”). All rights reserved.
While we have made every attempt to ensure that the information contained in this report has
been obtained from reliable sources, all data and information provided in this report is intended
solely for information purposes and general guidance on matters of interest for the personal
use of the reader, who shall accept full responsibility for its use. The names, photographs and
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Redseer does and seeks to do business with companies covered in its research reports. As a
result, readers should be aware that Redseer may have a conflict of interest that could affect
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All information in this report is provided “as is”, with no guarantee of completeness, accuracy, of
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