Business Plan ofHike messenger

Submitted by: Group13 Nishikant Singh(Pgfa1438) Prabhat Lohani(Pgfa1439) Prerna Verma(Pgfa1440)

Hike messengerDelhi-110003IndiaGet.hike.in

Partners: Bharti Enterprises, Softbank Corp.

Description of Business:Hike Messenger is across-platforminstant messaging service forsmartphonesthat uses theinternet for communication. In addition to text messaging, users can send each other graphical stickers, emoticons, images, videos, audios, files, voice messages, contacts and location.

Financing: Hike was launched on 12th September, 2012and raised its first round of funding of $7 million from BhartiSoftBank in April 2013.In August 2014 hike raised another big round of funding - $65 million - led by Tiger Global.

This report is confidential and is the property of the partners listed above. It is intended to use only by the persons to whom it is transmitted, and any reproduction or divulgence of any of its contents without the prior written consent of the company is prohibited.

Executive SummaryVision: To become Indias fastest growing mobile app and to bring India's one billion potential mobile Internet users online through their messaging platform.The application claims to have tailor made its features keeping in mind the local market and to cater to solving cultural and infrastructural problems such as lack of privacy, inconsistent data connectivity amongst many others. This exercise has contributed positively in taking the popularity of the app to a new level.Some of the key features of Hike app are as follows: Offer smartphone to feature phone messaging option Allows users to share any file format up to a 100MB each Only app to offer localized stickers and 2 way chat themes

Hike offers messaging in three different ways. Hike-to-Hike messaging with other phones is unlimited and free worldwide. Second, you can communicate with other smartphone users who don't have Hike via SMS, which is only restricted to India at the moment. Finally, you can message any other phone user via SMS.

Revenue Model: hike has three major sources of revenue: free-to-play video games that make money from in-game purchases of virtual items and other services; stickers featuring cartoon characters that users buy and send as messages; and official accounts for businesses and celebrities who pay fees to send a set number of promotional messages.

Technology: Hike uses a 128-bit SSL encrypted, firewalled server for all its media exchange and text communication via Wifi only. One of the most significant feature includes is data is not backed-up to Hikes server and is dynamically stored in the users device.

Target Market: The target market of hike messenger is segmented to those active internet users who lie in the range of age of 15 to 25 years.

Background and Purpose

BhartiSoftBank, of which Kavin Mittal is the head of strategy and new product development, is owned equally by Bharti Enterprises, the holding company of the Mittal family whose stake in BhartiAirtel is worth over $15 billion, and SoftBank Corp, the Japanese technology giant.Hikeis a subsidiary of this company in which Tiger Global, the New York-based investment firm, invested $65 million in August.

Launched in December 2012, Hike had reportedover 35 millionusersin August, 2014. It has raised $86 millionfrom Tiger Global and BSB, so far. Most of its user base is under the age of 15 and residing in India. Some of its popular features are Hike Offlinethat lets you message your friends even when theyre offline, Hidden Mode that hides your private chats with a password and also several regional stickers.The free Hike calling feature is currently in beta on Android,as the platformcontributes to over 90 percentof Hikes user base. The company plans to roll out iOS and Windows versions by the end of this quarter.

Target goals: To attrachindian customers aged between 15 to 25 To build an app that will give privacy to youngsters in the market. To cross 100 million users within 18 months

Objectives of Hike messengerHike objective is to bring India online by building through messaging. In a country where 1 billion people will come on to the internet mobile first on a low-end smart-phone and 2G/pre-paid data, Hike believe messaging can become a highway to the internet. Objective is to further localize Hike and not just in terms of content but go really deep in the market and solve more problems local to India.Hike wanted to build an automation platform that ca take care of rapid pace of building product. Hike decide on building framework at every level of department (client side , server side, scalability, load, database and overall matrix

Some of the points of automation objectives are:1. Hike want to build a framework that uses almost same test scripts and reusable components for both Android and iOS. The only prominent difference is of object repository, otherwise both platforms go hand-in-hand.2. Tests could be run on more than 1 device in parallel. Since Hike is a messaging app, this feature was the most important requirement. So two instances of android devices or two instances of iOS devices or combination of android and iOS devices interacting with each other in parallel.3. Supports multi programming languages like java, python, nodeJS, etc. Hike chose good ol JAVA!!4. Runs well with all Android API levels .5. Appium uses Selenium Webdriver APIs to interact with devices, so it is much easy to write scripts if you have any experience with selenium. It also supports various touch gestures to simulate user interaction with Android and iOS like swipe, double tap, long press, etc.6. Best part is, it is well integrated with Jenkins Which means with single button click (or with every dev checkin), we can know about apps health.

Market Analysis

The no#1 APP of IndiaHike now hit no#1 app on android and ios ap store. Hike have displaced tonnes of other popular apps including the world biggest messaging app whatsaap , social network facebook and games candy crush saga .Hike is now the fastest growing mobile app in India amongst the entire lot adding more than 300 hikers every dayHike is built with India in mind and its so glad to know that many of people moving onto Hike, Indias own messaging app and bringing your friends on board

Market strategy:1. Keeping the Indianness intact:While many India based small companies and start ups, deliberately underscore their LA Office, Hike did the opposite. It always stressed on the fact that it is completely Indian, which I guess, hit on the emotional chord of us Indians.2. Differentiation:One of the things that Hike very consciously did was to differentiate itself from WhatsApp. If it would have been another WhatsApp, nobody would have used it. Hike brought in the read indicator, hid the last seen, themes for chats and file transfer was expanded to more formats are the few on the top of my mind.The sms functionality specifically stands out in the Indian market. We Indians are frugal people. We turn off the data when we dont need it. In such a case the Hike sms came in quite handy and the cherry on the cake was the seamless integration and no cost!3. Localization:The stickers Hike introduced stuck resonance with the Indian way of thinking and emotions. The Indians and Bollowood tabs were in fact quite interesting. Things have been made even better and addictive by the recent update of State wise stickers. I have lived in 5 different states as of now and I love the local lingo these guys have picked up in these stickers.4. Conventional Media:The TV commercials (though I dont like Hikes TVC quite) but it enabled more traffic flow to the app. The market segment (which we call late adopters and laggards in marketing lingo), joined in after watching the TVC. Advertising mobile apps on TV had already failed for WeChat, Line and others,still Hike did it and still made marketing profit from it.

Market size: The market size of Hike messenger is around 35 million in a very short duration of 2.5 years that suggest that the growth rate is very high . It is because of the increase in the user of smart phones as well as the new trend the people are following. The company is continuously raising funds for its overall development like they have raised 14 million last year to improve their services and add on new features.

Target Segment: The hike company main target segment is the youth .people that are below age 25-30 are their real users In this category there come college students some office professionalsSuccess Factor: The success factor of Hike is first their research and development team which brings such a unique product with unique features like support for other Indian languages, shares files easily and hiding the last seen etc. Their research team do a lot of research before launching this. Other success factor is the marketing team which promote Hike so much that today Hike is giving a tough competition to Whatsapp and become a no.1 messaging app in India.

Development and ProductionIndia's Home-grownchatapplication firm "HikeMessenger" has just acquired US-based voice-calling company Zip Phone, a Y Combinator startup. Hike is planning to launch free voice calling soon, and this first acquisition by the Indian company is a step in that direction. The acquisition is aimed at expanding Hike's product range in the Internet-based communication space, the company said, declining to disclose the acquisition sum. "Zip Phone's technology will allow us to bring free voice calling to the market much faster.

Introducing hike direct cash transfersHike goal has always been to connect people across boundaries; close friends, families in a simple way without any complexities or restrictions. With technology we believe we can enable people to live their lives and connect with others far easier than before. As a result, weve always strived to push the envelope and have tried Hike Messenger Updates App With Language Support, Offline Messages, Voice Messaging The 2.2.0 version of Hike adds features like stickers, walkie talkie, offline messaging and support for four new languages.

Hike to Tie-up with Airtel, Vodafone & IdeaThe battle of free messaging apps overInternet has reached to mobile operators too. In recent time India becomes a focus point for the messaging apps and VoIP apps like WhatsApp, Skype, WeChat, Nimbuzz or Hike. In the latest development instant messaging app Hike, developed by Bharti SoftBank is in talks with incumbent players Bharti Airtel, Vodafone India and Idea Cellular to come up with special bundle packs for Hike app.Offline Feature, Push To Talk and Privacy on PreferenceWith Hike offline people will be able to communicate with their friends on hike even if they dont have Hike app installed. That is through SMSes. And more amusing is that the replies wont be sent to the friendsinbox but in the same message thread under the Hike app.Even if phone battery drains out, Hike will save messages and will display it again when phone is turn on.

PrivacyHike uses a 128-bitSSL Encrypted firewall server for the exchange of media and text messages only on wifi. Messages are stored locally in the user's device and the data is not backed-up to Hike's server.

Marketing PlanProduct1. Hike + CricBuzz bring World Cup 2015 Hike had launch real-time scores & updates for World Cup 2015 on hike in partnership with Cricbuzz. Hike designed a beautiful World Cup 2015 card that will bring you all the latestmatch updates and scores through the World Cup and you can share them with ease with your cricket-crazy friends and more

2. Introducing Free Hike Calls With the acquisition of Zip phone the hike user can make a free voice call over 200countries.It includes free calls over 2G,3G,WIFI3. Free stickers , multi language supporteHike introduces new stickers(regional) , walkie- talkie , point messaging application , free text messages to non Hike users and also supportable for the 4 languages

Pricing1. Cost effective strategy Hike introduces the hike messenger keeping in mind the people living standard here in India. In India people are more concern to save more and more money so Hike comes up with the cost effective strategy so that even the non Hike user can use the Hike with his/her hike user friend

2. Reward strategyHike paid 20rs per friendrecommendedby you to join Hike. These tactics, however, are feasible only in countries with developing economies, as the conversion rate here is quite less, as 130 INR is around 2.1 USD.

3. Penetration pricingHike comes up with the penetration pricing strategy. Hike sets the low amount for its services charged to customers

4. FreemiumIt is a type of pricing strategy in which other services are offered free with the main service likewise Hike charged money for its instant messaging and other services like free stickers , walkie talkie and free calling is there to attract and retain the customers

PlaceHike is the Indian organisation that provides instant messaging services in different countries. Hike has its headquarter in New Delhi, India a small organisation with 149 employees .No distribution channel for this organisation but there are many telecom partners like Airtel, Idea, Vodafone etc serving as a distribution partners for Hike messenger

PromotionHike involves unique and innovative style of promotion technique like:1.Celebrating birthday for Hike usersHike for its user celebrate its birthday by throwing a big party to its user and non user. A night full of comedy and dance by the AIB boys Daniel fernandes and Abis Mathews

2. Promotion on google playHike promote its app by sharing it with google play where user can see it reiew it and finally download it from there3.Television commercialFor promotion Hike uses the television commercial to attract the user. Hike use tv ads without any brand ambassador. 4.CharityHike raised 1 crore form more than 1 billion Indians adding 10 lakhs from their company fund to the prime minister relief fund for the natural disaster occur at Kashmir.

Financial Plan In the year 2012 Hike company freshly invest 7million rupees to run their business operation after that in the year 2014 they invest 14 million rupees to get advance with the technology. Tiger Global a New York based investment firm also made the 65$ investment. The company is continuously raising funds for its overall development like they have raised 14 million last year to improve their services and add on new features. In the year 2014 BSB Invest $14million to support the development plans of Hike messengerIn response Hike earn money by promoting other brands. Hike sells its data to other companies. Their per year income is in million more than $35million.

OwnershipHike is a messaging developed by Bharti Soft Bank. Hike is a brainchild of Kavin Bharti Mittal. Kavin is son of Sunil Bharti Mittal (owner of Airtel). It has raised $65 million from its parent company and a U.S.-based investor to help expand the user base of its free messaging app Hike Messenger.The investments are from New York-based investment firm Tiger Global Management and BhartiSoftBank, the Indian company said in a statement.Hike is a joint venture between Bharti Group and Japanese telecommunications giant SoftBank corp.They have partnered with companies like: Cafe Coffee Day, Pizza Hut, Dominos etc. The more you use Hike they will give you coupons as rewards. For an example: You got 20% off on a pizza at Dominos and the actual cost of pizza is 200 INR + taxes. You will get that pizza for 160 INR + taxes. Now this is a trick. Most people buy pizza because they had a 20% off coupon. And the same thing goes with other coupons.They have a featured Apps section inside their app which suggests you to install new games and apps. These apps and games are sponsored by their promoters and developers. Hike makes profit in between. It's just like advertising your app on Hike.But the money they earn from Coupons is very less. They spend money on Advertisements (TV, Newspapers, AdWords, Facebook), Dedicated Servers, Message Centers (which let you send free SMS), App Development, Giving free talk time if you invite someone, Giving free SMS if you invite someone and they joins Hike. All in all,they are putting all effort to beat WhatsApp in this messenger war. They have everything in house. Message Centers, Free Talk Time, Free SMS all are powered by Airtel. And for the rest of the things, Airtel is putting all the money.

SWOT Analysis Strengths

Loyal customers Market share leadership No need to log Group Chat Allow send videos, pictures, voice notes You can put profile picture No need to add friends No need PIN or user number Cost Advantage Available for all platforms For some platforms is free the first year in order to build customer loyalty.

Weakness

Not diversified, because other applications offers the same service and also function as social media Weak distribution network To access the account can only be paid by credit card only Only works with a data plan or wifi.

Opportunities

Continued development of technology platforms Advanced technology Recognized application Modernization of people Increased demand for smartphones Video calls to keep customer connected only on one app

Threats Competitors like Wechat, Viber, Tango, Skype, Line,Whatsapp Product substitution Similar applications and free

Time Line of hike messengerSeptember 2012Launched in INDIA

November 2012Hike becomes global messenger app

December 2012No.1 in Germany

February 2013No.1 free iphone app in India

February 2013No.1 android app in India

September 2013Hike + Airtel

December 2013Turns 1 globally

July 2014No.1 app

August 2014Crosses 35million users

January 2015Free Hike calls(acquire ZIP phone

Assessment of Risk Weakness of Business(Hike messenger) Not financially strong few promotion strategy No brand ambassador Weak distribution network

New Technologies Free calling Free usage of data pack Attractive stickers All android supportive software Blackberry as well as I-phone supportive software

Contingency plans Cost effective Invest on development More economical