Despite WhatsApp’s dominance in India, investors still bet on local chat apps like Hike

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Indian instant messaging app Hike just received $14 million in funding from Bharti Softbank, according to the Economic Times. The app reports 15 million registered users, 80 percent of them in its home country.

While we’re happy for the company, US$14 million is nothing in the war among messaging apps. Fighting against WhatsApp – not to mention the whole range of other messaging apps salivating over the world’s fastest growing smartphone market – seems hopeless. Could Hike be holding out for anything other than an exit?

Yes. By June, India will have 243 million internet users, and 185 million of them will be connected through their mobile phones. But India still has about one billion people without internet at all. Another 10 million people come online in India every month, mostly on mobile. Many of them likely haven’t given much thought as to what app they will use to message their friends and family.

If that doesn’t sound appetizing to every global internet company in the world, then I don’t know what does. Even if Hike were to get just one 0.1 percent of those web newcomers to download its app, that’s still an additional 10,000 users per month. Hardly a figure to snub your nose at.

And Hike has an ace up its sleeve – it can message those who aren’t on Hike for free via SMS. The app has already partnered with local carriers including Bharti Airtel, Vodafone, and Idea Cellular by combining data and SMS in special bundles. This gives Hike some first-mover advantage in areas still without GSM connectivity.

If you’re keeping score

WhatsApp currently leads the chat app race with 40 million active users in India, and is growing at a rate of over five million per month. Those are monthly active users, mind you, not just registered users as Hike (and others) prefers to count.

Everyone wants a piece of India. Japan-made messaging app Line offers INR 50 (US$0.83) of free talktime to users there. It was launched there in July last year and says it currently has close to 17 million registered users in the country.

Rakuten-owned Viber says it has four million active users in India and is investing heavily there to create localized content like stickers.

Nimbuzz says it has 25 million registered users in India. Nimbuzz made an early push on feature phones in India with its Java-based app.

South Africa’s Mxit also wants to gain traction among feature phone owners, working on Nokia and Java-based feature phones and smartphones alike. It just launched in India earlier this year.

Many of WeChat’s over 100 million registered users outside of China are likely from India. WeChat India’s Facebook page has more than 800,000 Likes. It also has localized stickers. Also, several Indian companies have subscription accounts on the app.

So with all these players in the market, will India go the way of most other countries and consolidate to a single dominant chat app? Or is there room on the court for a few more players? Either way, WhatsApp can’t chalk up India as a win, yet.

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