When a service used by 1.8 million people lost 90% of its customers
Haebom
Do you know India's native social media platform Koo? Koo, which emerged as an alternative to Twitter with rapid growth since its launch in 2020 when the coronavirus pandemic was in full swing, has since faced several challenges and is facing a crisis. Koo's number of monthly active users grew rapidly, reaching approximately 1.8 million by the end of 2022. But since then, the number of users has declined rapidly, falling below about 200,000 by early 2024.
Initial success factors: localization and government support
The secret to Koo's early success came from a deep understanding of the Indian market. By supporting major Indian languages such as Hindi and Tamil, we were able to reach out to local users in a friendly way. In addition, friction between the Indian government and Twitter worked as a boon for Koo. This was because many politicians and celebrities moved to Koo at the time, increasing the visibility of the platform. Based on this momentum, Koo accelerated its overseas expansion. Performance in Nigeria and Brazil is representative, and in particular, Koo emerged as an alternative while access to Twitter was blocked in Nigeria.
Growing Pains: Difficulty Raising Funding and Differentiation
However, Koo's smooth sail was short-lived, as investment sentiment for startups declined in the aftermath of the global economic downturn, and he began having difficulties in raising funds. This put a brake on marketing and user acquisition activities and ultimately led to large-scale staff reductions. In 2023, we had to go through the pain of restructuring, including laying off 30% of all employees. Here, the platform's own differentiation strategy also revealed its limitations. Multilingual support alone was not enough to retain users. In the face of the overwhelming features and user base of global competitors such as Twitter, Koo's position was inevitably narrowed. Furthermore, influential social figures who were early users created an image of the platform as a conservative platform through political comments, which acted as an obstacle to Koo's growth.
Even during the crisis, Koo did not stop investing in the future. A representative example is the encouragement of user participation through a compensation system called ‘Koo Coins’. It is evaluated that it has had the effect of increasing the frequency of users' access by paying coins according to app login and content consumption and allowing them to be cashed.
Recently, we also introduced creator-friendly policies. Through premium features, we have laid the foundation for creators to generate revenue through a subscription model. This is expected to have a positive effect on encouraging creators to settle into the platform while also creating a differentiated content ecosystem.
Looking at Koo's situation, we can see that both opportunities and risks coexist. First, in terms of opportunity, Koo's localization strategy and creator-friendly policies are expected to play a major role in securing competitiveness. Above all, Koo's preemptive entry into emerging markets, including India, is encouraging, given that they still have great growth potential.
On the other hand, uncertainty in financing and monetization models can act as a risk factor. This is because if the global economic downturn is prolonged, it may be difficult to attract investment. In addition, competition with existing platforms such as Twitter is a formidable task. Given their overwhelming market share, it is expected to take considerable time for Koo to close the service gap.
Koo's case is a good example to talk about the content and platform industry. Although it received a huge investment and secured many users, the use of influential people, which was initially a strength, turned out to be a risk. Since then, various attempts have been made, such as introducing Koo Coins to support users' economic activities and introducing a premium content model.
Moreover, with Prime Minister Modi coming back to power in this general election, the people who were active in Koo have gained power again, so I wonder how things will change. Business is not just about market logic.
