Let’s start with a number. According to the latest census, in 2011, 85 million urban Indians were considered single, potentially looking for partners. The number represented a market waiting to be acquired, hooked on and then monetised. This is as per a report in the Economic Times by Varuni Khosla.
It was also around this time that online dating was peaking in the West, with a mix of startups such as Tinder, and well established companies in OkCupid or even Match.com making their mark by helping singles find partners — casual, serious, one-night relationships or sometimes, just friendship for life.
India, though never a priority market, was just about getting started. A vast number of urban singles, shunning stigma and societal denouncements, were ready to date online. Slowly, but surely, armed with the ubiquitous smartphone, apps became the norm. And then, the likes of Aisle, TrulyMadly and iCrushiFlush took the plunge into the 85-million market with contrasting business models.
Five years down the line, there is some evidence these companies might be earning money.
According to online market researcher Statista, Indian online dating companies are expected to earn around $13 million in 2018, with nearly half the singles (41 million) from the 2011 census on dating apps by 2022.
Statista also says sectoral revenue is expected to show a compounded annual growth rate of 10.3% over the next four years, which would result in a market volume of $20 million by 2022.
These numbers may pale in comparison to major markets such as the US, where dating apps expect to generate at least $590 million in 2018.
Primarily because, Indians, for now, are happy to consume free online products but seriously hesitant when subscription-based payment models are thrown up.
However, there are some who do not mind shelling out a few hundred to at least try and find their best match.
Tinder, for instance, is the third largest grossing app on Android in India, with industry estimates placing its monthly revenues anywhere between Rs 1-2 crore.
That said, the best may well be yet to come, say some founders, especially with the surge in language-first internet users expected over the next few years. This will also help dispel an industry myth of sorts — that online dating is a ‘top 10’ market phenomenon.
TrulyMadly, for instance, claims that 40% of its users come from outside the top 10 cities. This could include the likes of Guwahati, Visakhapatanam or Raipur — a mix of student towns and so called tier II-III cities. And that’s where the opportunities could lie too.
Love knows boundaries
“Even though we have broken even, the numbers haven’t grown significantly. The magic would be to try and achieve that hockey-stick growth,” says Sachin Bhatia , cofounder of TrulyMadly, which claims a monthly download rate of 65,000-75,000 users.
Others, like Sreedhar Prasad, partner and head, consumer markets and internet business, KPMG India, however, are sceptical.
He reckons these companies will have to devise a long-term plan for survival, saying, “Dating apps are a top 10 city phenomenon in India, just like e-commerce apps. The success of these apps will come from the number of authentic female profiles on the apps and how much time users spend on these apps.”
But investors remain bullish. Navin Honagudi, managing director, Kae Capital, that backed TrulyMadly, admits there was doubt in 2014 when the Indian market hadn’t matured. “Questions were raised around adoption and monetisation. But things are changing for the better. So, after their growth phase, dating apps have to seriously think of premium monetisation,” he says.
iCrushiFlush owes 65% of its traffic volumes to tier II towns like Ludhiana, Surat and Indore. “Tinder is a tier I phenomenon, whereas we have penetrated beyond the big cities,” says Amit Vora of iCrushiFlush. Happn is focusing on Hyderabad, Pune, Jaipur and Lucknow beyond the big cities. Just less than half of TrulyMadly’s business is from smaller towns too.
Freemium’s the first love
The business of online dating, as ironic as it might seem, isn’t about dating. It never was. It’s more about user engagement at a micro-level and hope, cognitively speaking. It is about getting you to spend time on the platform. And, as Robert Palmer so convincingly sang, it’s about getting you ‘addicted to love.’ So what do you do next? Pay for it.
“About eight of 10 times, there is no engagement. That is also due to the gender bias in the platform, that is, there are more guys than girls on the platform,” adds Bhatia of TrulyMadly. Tinder, sources say, has 90% men users in India.
This business also works on successful failures. Failure in the dating business is when a subscriber can’t find a match or the match doesn’t go anywhere. So, imagine Raj speaks to Simran virtually but never meets her. He tries a few times but then moves on to another platform to meet a different woman. That’s both opportunity and revenue loss.
Success is when Raj and Simran meet, like each other’s company and date. Cupid strikes, yes, but it’s heartbreak for the business. Companies lose revenue since repeat orders make money.
Now, a successful failure is when Raj meets Simran, they date briefly but things don’t work out and both come back for more. This time, they know that there is a chance of success. Because it happened once, didn’t it? They stay on the app, keep subscribing, keep swimming and thus, keep buying (new and) expensive packs.
Bhatia says, “If a guy gets a match, that is, a girl has liked him back, there’s a sense of hope that makes him stay on the platform for at least three months. We noticed that if a girl, however, messages him back, the user tends to stay there for at least seven months.”
This is also why dating apps invest heavily in their in-app messenger feature. Until, of course, things go offline or most often to platforms like WhatsApp or Instagram. It also doesn’t actually matter what your marital status is. Single, needless to say, is preferred.
For users, typical use cases are a mix of long-term, casual and platonic relationships, flings or even friendship beyond dating.
Tinder, for instance, offers TinderPlus, a monthly subscription-based product (priced at Rs 899) which allows users unlimited swipes, limited ‘super likes,’ and the ability to find partners in multiple locations, a feature it calls passport.
Some interesting facts:-
Tinder had about 7.1 million active users in 2016, TrulyMadly had about 1 million users. In 2018, Tinder has about 6.3 million users.
All APPs are free to use but have add-on features
TINDER – Rs. 1099 for a month or Rs 6099 for a year for GOLD – Charges are Rs 299 for a single boost or Rs 1940 for 10 boosts in its Plus model
Aisle.co – has an Ask out model – Men can buy 3 Ask outs for Rs 1797 or 7 Ask outs for Rs 2793
Bumble – users get its Boost feature at Rs 1699 a month or Rs 3399 for three months
CoffeeMeetsBagel – premium model costs Rs 8898 for 6 months or Rs 2749 for a month – At Rs 3898, users get 8 Takes and the ability to send unlimited flowers
Happn – Begins at Rs 149 a month
Inner Circle – Full membership is priced at Rs 399 a month
Another subscription tier, TinderGold, lets users see who liked them, besides TinderPlus features. The premium package, Spark, on TrulyMadly is priced at Rs 899 for 40 ‘sparks,’ with Select, a feature for those seeking a more “serious relationship,” offered at a monthly fee of Rs 1,196.
The monetisation puzzle goes all the way from subscription to micro-transactions. For dating companies, social e-commerce is fast becoming integral to their long-term strategy, a key learning from the famed Chinese app design playbook, which reads somewhat like this: acquire, hook and keep monetising.
That is, once the user is addicted or has signed up for a monthly fee, these dating apps offer add-on paid features like virtual gifting of flowers, likes, champagne bottles and so on. Each of these transactions is charged.
TOTAL NUMBER OF ACTIVE USERS IN 2018:
Tinder – 44 Million
TrulyMadly – 2.01 Million
Aisle.co – 0.7 Million
Woo – 1.87 Million
This is also why monetising the user early — rather, as soon as possible — is seen as critical “because you know you are going to lose him/her, eventually,” says Bhatia. TrulyMadly’s Sparks is an algorithm-led conversation starter feature of a kind, which handholds the user.
“Where some of us Indians, despite having good jobs and good backgrounds, fall short, is making conversation with women. That is what we’re trying to do through Sparks,” says Bhatia. “It’s like helping guys with common interests, communicate.” The company claims that 40% users who have used Sparks once tend to buy it again.
Just lovin’ it
But companies insist their monetisation approach isn’t quite a one-size-fits-all. The end goal here is to keep the customer engaged. Some companies such as TrulyMadly and The Inner Circle have tried out offline events with mediumto-little success. While they boost top lines, they don’t add much to the major revenue stream — in some cases under 20% of the year’s earnings.
Industry insiders suggest Tinder has less than 0.5 mn paid monthly users. On the revenue side, AppAnnie estimates, Aisle has earned approximately $ 52,000 for this calendar year.
But larger players such as Tinder are much higher — in the ballpark of $4.14 million. While ET could not independently verify these numbers, TrulyMadly stood at about $60,000. The main source of revenue outside of subscriptions could still come from ads, a potential that is locked, say advertisers, though it needs a strategy. Imagine swiping through a few hundred people and having to see a profile of lingerie or men’s underwear during.
Tinder has been known to show such ads here, through targeted Facebook and Google advertising. But so far, some of these apps aren’t relying heavily on advertising, partly because of their lack of appeal to the advertiser, says one digital agency head.
Rajiv Dingra, founder of digital agency WATConsult, says, “Dating apps aren’t popular with advertisers because they primarily appeal to tweens and teens. The whole dating app infrastructure is not favourable, and they would much rather stick to safer avenues like Instagram and Facebook,” he says.
For instance, an ad on Tinder, Dingra says, could cost anywhere upwards of Rs 200 per ‘impression’ or the number of times it showed up on someone’s profile. But Tinder India’s general manager, Taru Kapoor, insists the company isn’t here to make money. “We like to invest a lot in understanding our 18-30 demographic.”
Tinder’s move could be pivotal, as it could hold some of the best user data, both demographic and preferencebased, which it could later monetise through targeted advertising.
The next stage of dating apps in India could look like a mix of dating, expanded social network and video — given its strong post-Jio uptake in smaller towns and cities. The popularity of Chinese live streaming products like BigoLive and others have come as a big fillip to these companies. This is also how some of these apps will try and lure more regional language users.
“This ‘meeting in person’ concept is still very Delhi and Mumbai-centric. The rise of live streaming has given us an opening to the regional audience and, in places, we believe the concept of coffee shop dates is yet to take off. We want to see our app as a virtual Cafe Coffee Day outlet, where people come to engage,” Bhatia adds.
This, he says, is in stark contrast to Facebook, which recently announced its dating ambitions, “where users may carry a fear of being judged.” But Aisle will not consider a video feature in its app.
“We want to get a man and a woman to meet in a meaningful way. If we did give out all of these features, there is no guarantee that people won’t misbehave. And we don’t want that,” says Able Joseph, its founder.
However, while dating apps have credibly demonstrated an ability to earn money over time, the vagaries of the business are such that having a sustained future is not exactly a given. There is undoubted, an intent to move the needle.
“We have spent five years in the market and seen the ups and downs of business. But we believe we have a solid understanding of the market today, gained by building features in the app, which we feel will help us going forward,” Bhatia says. For his company and others, it’s a date.