Interview: Country head Anubhav Nayyar talks about Viber's plans to double India users without ad spending

Social messaging apps are slowly but surely replacing traditional SMS. Facebook’s acquisition of WhatsApp for a mind-numbing $19 billion just goes to show the potential this space has. While WhatsApp is the go-to messaging app, there are many others in the market which you can try out. One of them is Viber, which has around 300 million registered users globally, 16 million of which are from India. The unique thing about this app is its virtual absence from the advertising and marketing space, specially when other Asian social messaging apps such as WeChat and Line are aggressively advertising. One of Viber’s USP is that it is ad-free (just like WhatsApp, might we add) and you can make free VOIP calls to another Viber user besides sending them text messages.  Just recently, Viber was acquired by Japan’s Rakuten for $900 million , a deal which is sure to put more focus on the app in Asia**.** We spoke to Anubhav Nayyar, Country Head, Viber India on the company’s future plans for the market, about how it plans to stay relevant without ad-spending, in the cut-throat social messaging market.

Q: When did the India operations start and what was the whole idea behind having an Indian presence?

A: We started our operations in India in December, but the app has been around for the last three to four years. The key idea behind setting up an Indian operations unit is to understand the consumer really well. Viber operates across 93 countries, so we have a lot of users. In India itself we have around 16 million users. The implication here is that, what users want varies from one country to another. One of our key imperatives is also to understand what the users like or dislike - not just about Viber, but about the social messaging space in general. It is such an evolving category that every it changes every two-three months. So although we have been able to maintain our position, one of the key things is to bring about localisation. So localising the brand to an extent, is one of the key reasons why we set up operations here.

Q: Could you elaborate on what you meant by varying needs across different countries.

A: Sure. If you look at India for example, the market here is very expressive. So communication is not just through simple text messaging. The trend we are seeing is people are expressing themselves using emotions, sentimentality or humour and people want that integrated in the product. The feedback we have got from our consumers is that they love our stickers. We create technologies and people give us fun ways of using it. For example, Creative Viber Doodles is a fun feature, where people can draw something and send it across to their friends. A lot of people do a lot of fun activities, such as playing guessing games and so on. So the key takeaway point is that people love expressing while communicating. It is no longer going to be just about texting. It’s a natural evolution. For instance, initially we had SMSes, then we moved on to instant messaging but what we are now seeing is that, whether its our stickers or our doodles, it’s more of content which is being shared. This is quite different from other countries. Also there are some stickers which may do well here and not in other countries. Most of our stickers are free, but some of them are paid. But we have seen some of our paid stickers do very well, for instance ones on the theme of love and so on. Emotions vary from country to country and so the usage pattern will vary from country to country. Another thing we have noticed is that we have been doing very well when it comes to calling as well.

Q: And what is your target by the end of 2014 or say in the next couple of years in terms of user base growth…

A: See, currently if you sit around 7 per cent, then we would like to grow significantly faster. If you see smartphone penetration is almost doubling every year. So we are also targetting to get around 30-32 million users by the end of December 2014.

Q: India already has a lot of instant messaging services such as WhatsApp, Line, WeChat and even BBM has recently added voice messaging functionality on its app on different platforms. In this crowded space, how will Viber differentiate itself?

A: One of the things you will see is that India has a pre-dominantly Android market and Viber is sitting in the top 15 apps across categories. We don’t necessarily look at competition as such. But we haven’t spent a single rupee on marketing and that’s a big validation for us that despite no marketing, we are still within the top 15 apps in the Android market. The basic formula for being on the top is that you need to be the most downloaded app, the most rated and reviewed, etc. We do know that consumer acceptance for our app is very high and it has stayed consistent. We have seen a lot of new players come in, spend a lot of money on marketing and while they do get the initial push, everything eventually dies down. I think virality has been our biggest strength. We have been able to identify what are the key consumer needs and deliver a product according to that.

A lot of people ask me how will you monetise Viber, which is also the most obvious question. Easiest thing to do would be to put advertisements on the app and even if a small percentage of users click on those ads, we will make enough money. But Viber will remain ad-free, something we believe in strongly that it will benefit us in the long run. So in anything and everything we do, whether it’s our R&D, whether it’s research, whether it’s product development, we keep the consumer at the heart of it. We are willing to let go of a few small things in the short run to win in the long run.

Also one thing we have noticed that even instant messaging for Viber has been growing than say the calling service. I think this has got a lot to do with the fact that we offer features that are appealing, some of them are unique to us. One of the major feedbacks we have been getting is that we are available across multiple platforms. So the fact that I can start a conversation on the phone and continue it on my desktop without having to drop the call is unique. It is on an auto-sync mechanism. At the end of the day this is just a feature, but consumers pick it up and they really like it. The free-flowing nature of our app across platforms is interesting.

Another example is our Push To Talk feature which is like instant voice messaging. So you hold on to this microphone and talk, and once I release it, the message is sent instantly without any input from you. So this is a small feature, but with heavy stress on user experience - instantaneous and clutter-free.

Q: You said that you will not go with an ad-supported model, but at the end of the day this is a business. And you have to have a monetisation plan, so how do you plan to achieve that? Viber stickers is one way, but what kind of traction is it getting. And what else do you do for monetisation, apart from the stickers?

A: One thing is a given - we won’t have ads. For monetisation, we go about it in two ways. One of the advantages of having such a huge user base is that even if a small percentage of those users decide to go for the paid services, we have a lot of money coming in. But we don’t want the monetary part to affect user experience. If someone wants to use it for free, they can and anyone who is willing to pay will get an additional benefit. But it’s a choice and there is no compulsion to pay for a good user experience. We have two areas which are getting us a lot of traction. One is Viber stickers - close to 90 per cent of the stickers are free, but for the rest you have to pay and they are renowned characters such as Garfield or Smurfs. So users have an option between these or the 1200 odd free stickers. One thing we noticed as soon as we opened the sticker market, is that within four of five hours the revenue we earned through this was staggering. That is the advantage of having a large user base, even if 1 per cent of that user base willing to pay for one sticker, it translates to a considerable earning. So this model is based on expression.The second part of monetising is based on functionality. We have Viber Out which allows you to make calls to anyone across the globe on their cellphones or landlines. So you pay for it, only if you want to be able to use this service, else you can use the app for free for life.

Q: What is the payment model like? A: A call to the US would work out to say Rs 1.6 per min, which is significantly affordable than traditional methods. There is a way of monetising without necessarily ruining user experience.

Q: But keeping in view the recent acquisition of Viber by Rakuten, there will be increased pressure to monetise, as you are now answerable to new investors, shareholders and so on. So keeping that in mind, will things remain the same?

A: I think the acquisition has happened very recently, so it is early days to comment on what Rakuten wants from us. This will be a question Rakuten will be in a better position to answer. We know Viber very clearly and there is a formula which has given us a lot of success and we plan to stick to it. So I don’t see a change in our philosophy as such.

Q: Talking about stickers which serve the same purpose as a smiley or emoticon, but obviously with more intricate and detailed visuals, why would the Indian consumer pay Rs 70 just to send across a sticker?

A: See there’s an evolution that happens. Initially, emoticons came along with various players and it was a free service. Now we have stickers, maybe two years down the line there may be something else. There is no fixed formula by which I can tell you that paid stickers are bought by such and such people. We have noticed new users downloading stickers and sharing them. It is similar to the concept of hoarding, where everyone wants everything. Viber is a social messaging app and it is all about how you are bonding with your friend. Everyone wants access to everything. It is a trade-off; are you willing to pay for something which you are very interested in? In case of paid stickers, you cannot forward it after you have received it from your friend. There are some characters we have built around stickers such as Rudy, who is a rude character who is quite loved in India, maybe because youngsters talk like him. The point is, stickers are personalities in themselves. Stickers are used in conversation. For instance, we did this sticker-only conversation of 650 messages using just stickers. And the conversation was a sensible one. So that is a possibility and just another way of communication.

Q: How does Viber Out work at the back end, specially when you are switching from a VOIP call to a traditional telephone call.

A: There are various services which we have across a number of countries. It is a hub and spoke model for routing calls. So when you make a call, it connects to the servers in those countries, which then convert it and forward it to your friend on his or her landline or mobile phone. The other unique feature is that your friend will get your caller ID, to avoid dropping unknown calls.

Q: Are there any plans to have a research center in India? A: As of now, no, because we have not felt the need. The important thing is whether we can take the feedback from the users and pass it onto a central server. I think that model is working for us so far, so we would like to continue with that.

Q: So Viber Media is planning to double the user base in India, but you also said that there are no plans on going through the advertising and marketing route. Instant messaging apps such as WeChat, Line and so on are heavily marketing themselves and the brand recall among the general population is high. Thanks to the smartphones being available at prices as low as Rs 5000, there are lots of people who own smartphones but may not really be that tech-savvy to follow trends on the Android or iOS app markets, or may not have heard about Viber. So how do you plan to tap that majority without marketing?

A: We look at it in two ways. One, we need to give a great user experience to the existing users. We need to improve their user experience. Like you mentioned, the entry point to a smartphone has considerably dropped. So one of the main objective is to ensure a great user experience. The second thing is that we want to get our product right and ensure that it is simplified. If the product is simple to use, has a good user experience, provides some relevant benefits to the consumer, advertising can be kept on hold. But if we realise that we are not getting that push and downloads are dropping, then we might look at marketing. Right now our main priority is improving the product and understanding users. Because of the fact that we are available across multiple platforms, the traction we gain is on the higher side. One of the other reason can be the fact that smartphone penetration is not yet at its peak and we are available on the desktop as well, that we have many users. So our philosophy is the concentrate on adding and improving features and improving number of users and only if this isn’t working, get into the marketing and advertising.