Shiv Putcha
Feb 9, 2018 · 6 min read

On January 16th, Hike, an Indian messaging and payments platform, announced a new product called “Total, built by Hike” (Total). Total is targeted at the Next Billion segment of users in India and aims to provide an on-ramp for these users to sign up for and “consume” services and content on the Internet. The elevator pitch for Total is that it is a customized version of Android effectively being offered as a new “OS” in partnership with device manufacturers and offers users a curated set of applications that can be used offline and an application-specific data bundles.

Total has a few key elements to the proposition:

1. Simplified sign on — the key proposition of Total is the simplified sign on process when powering on the smartphone. The user is taken directly to the elegant home screen, which boasts a collection of curated apps for users.

2. Curated apps — these include popular Indian app categories like messaging, news, horoscopes, railway reservations, cricket scores and payments. Activation of all apps is greatly simplified through a single sign in process linked to the mobile phone number. That is, there is nothing extra for the user to do.

3. Light memory footprint — all apps and services on Total have a memory footprint of between 100 kb to 1 MB to keep the drain on memory resources low.

4. Offline access — the unique aspect of Total’s value proposition is that users can access the curated apps even without a data pack. This is made possible by Hike’s proprietary technology, introducing enhancements through a “secret sauce” that builds on a foundation of unstructured supplementary service data (USSD), a legacy GSM communication protocol that was an enhancement on SMS and allowed a real-time session connection to the operator’s servers.

5. Devices — To access Total, users will need to acquire a smartphone at launch from OEMs like Karbonn and Intex at a cost of INR 3000 (US$47). Four models are available at launch and the expectation is that more OEMs will be added to the partner ecosystem.

6. Mobile data sachets — beyond the offline access to apps and services, Total also introduces data packs in a “sachet” model by organizing the packs in intuitive ways for the user. Instead of focusing on MBs, the sachets packs are designed around the number of downloads for video, music, photos and so on. These mobile data packs are offered in partnership with mobile operators.

More details on the “Total, built by Hike” launch can be found here and here.

Overall, the user interface of Total was elegant and the demos worked seamlessly bar one. But the key question remains as to the addressable market that Total is built for. Put another way, what was the problem that Total is looking to solve? By way of explanation, Hike founder Kavin Mittal claimed at the launch event that there were about 200 million unique mobile Internet users in India, amounting to a sixth of India’s population. Given that the installed base of 400 million smartphone users, this would imply that barely half of smartphone device users were using mobile data. So why are the rest not signing up for data? What could be done to change this dynamic?

The bits about Total that resonate

It’s not enough to have a cheap smartphone, it’s what you do with it!!! To this extent, Hike has gone beyond most when it comes to breaking down the problem of the Next Billion into its component parts and finding solutions for each one of them. Hike is framing the problem of the Next Billion not only in terms of affordability but also in terms of discovery and consumption of content and services; the memory constraints on the device; the coverage gaps in mobile data as well as a visual method for purchasing data and top ups.

While the jury is still out on the actual user experience, Hike’s focus on offline data will really resonate with the vast majority of value-conscious mobile subscribers in India. These are the same users who flocked to Reliance Jio’s disruptive free tariff packages with huge dollops of free data and voice minutes. Hike has also done well to partner with the mobile operator community in India and build an ecosystem around the Total offering. The sachet packages are designed in a clean and intuitive way that would appeal to potential users who have had to deal with the somewhat bewildering world of short codes sent over USSD for activations.

The bits about Total that don’t resonate

For all the things that make sense about Total, there are a few questions that we haven’t been able to get our heads around. The first question revolves around the device and the fact that to access Total, a user would have to purchase a new device. It is difficult to see the average user, who already has access to the JioPhone as well as similar “affordable” smartphones from Airtel and other mobile operators that target the same segment, go out of their way for Total.

Even if one concedes that Total offers a truly differentiated experience, what would tempt a Next Billion user to pick up this phone with this UI over a generic, low-end Android device with Google Play? With memory cards dropping to pretty affordable prices in India as well as rock bottom mobile data pricing, many of the constraints that Total claims to solve can be argued to have been “solved” already.

Finally, there are other ways to deal with the constraints hampering the Next Billion. For example, the Venus Browser takes a completely different approach, one that leverages a browser with small memory footprint on Google Play. Venus offers a significantly higher number of apps and regional content services relative to Total, and doesn’t require the user to purchase a new device.

Final Thoughts

Hike claims to have over 100 million registered users in India, which is not a small amount. However, they have not published data on active users for over a year. Hike’s contention is that their user base is highly engaged, which may be perfectly true but also implies that the number of active users is much lower than the registered user base. To fix this, Hike needs to establish a new channel for potential activations and the Next Billion segment in India is the correct one to target if they can be provided with an on-ramp to the Internet. If the experience is seamless and cost-effective, all the better!

That said, after positive first impressions, we are sceptical that Total will be a major success. The devices will need heavy marketing as it will be difficult to convince users to purchase new devices. Hike will not only need to grow the ecosystem for Total but also clarify the channel strategy. If these devices are primarily offered through the open market, there need to be significant incentives in place for distributors and retail sales. Beyond this, the window of opportunity for a product like Total will close rapidly as many of its most compelling features already are or will very soon be offered by larger competitors. Offline access is already being pushed heavily by the likes of Google with their major apps and services. WhatsApp will soon be launching UPI-based payments to a much larger and far more engaged user base in India. Curated apps are already on offer from the likes of Reliance Jio, Airtel and several major operators. All in all, we believe that Hike will have its work cut out to push Total into the mainstream as well as provide a pipeline for new users of the core Hike app.

Beyond the Next Billion

Insights, opinions and research on the network and emerging technologies that will drive the next billion digital opportunities in Asia.

Shiv Putcha

Written by

Founder and Principal Analyst at Mandala Insights, an independent analyst firm focused on the Next Billion digital opportunities in Asia.

Beyond the Next Billion

Insights, opinions and research on the network and emerging technologies that will drive the next billion digital opportunities in Asia.

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