Entrepreneurs always want to be in the media glare — some don’t mind even bad press as long as their name appears somewhere in the news. A handful stay away from media because they believe that their work will speak for themselves, that publicity is the result of hard work and it will happen automatically.
Indian entrepreneur Arun Gupta belongs to the second category. He has never hogged the limelight, although his startup has grown to become one of the successful profitable businesses in just four years since launch.
More importantly, his MoMagic Technologies reaches more than 90 million users in India — far more than WhatsApp’s user base of around 70 million and close to Facebook’s 130 million users — although it has an entirely different business model.
Based out of Noida (North India), MoMagic is a customer acquisition platform for companies developing content and apps. In technical terms, the startup generates the desired reach and acquisition of the end customer for companies tapping mobile for reach and marketing.
For startups with their own apps and looking for varied ways of cost-effective customer reach and acquisition, MoMagic can be a vital part of their marketing plan.
It also facilitates a complete analysis of the usage trends, demographics and other data. In addition, the startup consistently provides clients an insight and understanding of its consumers’ mind and preferences from time to time to help work on penetration strategy.
How does the magic work?
“Applications/content need some kind of technical mechanism to reach out to a consumer. We are doing just that. There are potentially three ways to do it — OEM- or factory-level, retailer level and over-the-air programming (OTA) level. We, as a company, are focussing on all three of them,” says Gupta, a technology veteran who brings more than 22 years of experience into being a serial entrepreneur.
OEM level: Refers to embedding of games/apps in the handset at the time of manufacturing. Certain utility apps and games, which the consumer receives while purchasing the handset at no additional costs, are embedded at the assembling stage. MoMagic works with its OEM partners to get it preloaded in the handset.
Retail/offline: Refers to side loading/installing the app into the handset at the purchase point with due information to the consumer.
OTA/online: Refers to delivering the app to the end consumer through notifications on the handsets.
Across all these levels, MoMagic reaches 90 million users in India — Seventy-five million through OEM-level, 12 million at he retail level, and three million retail-level).
“Our aggressive expansion and retail penetration is today showing the maximum potential, especially, in the Tier II and III cities. The awareness about the app and its usage, plus hassle-free installation (side load) without additional Internet/data costs, has helped us grow close to 30-35 per cent,” Gupta adds.
As of now, the company claims to register 300 per cent year-on-year growth in revenue for FY 2014-2015.
“And if we talk about the overall market and our growth expectation, with the handset market accelerating at the rate of 25-30 per cent for India, we are looking at 50 per cent growth in revenue in FY15-16,” Gupta says.
The firm earns money through two different revenue streams — B2B, where app companies spend on quality user acquisition through mobile Internet and education; ‘Try n Buy’ or ‘in-app purchase’ mode, where end user pays the money if they like the application/content.
Currently, MoMagic operates across five markets in Southeast Asia — Bangladesh, China, Indonesia, Sri Lanka and India. It has plans to expand to the African market in the recent future.
According to Gupta, Tier II cities and low-end smartphones ranging less than INR 2,000-3,000 are showing the maximum growth. The firm currently works with 16 OEMs (handset makers) in the Indian market.
He is also of the view that the mobile app-only strategy adopted by certain companies is a positive trend, but the success depends on many factors such as: the company, offerings and the country demographics.
The companies that have registered 70-75 per cent of their sales through mobile apps will ultimately get 80-90 per cent sales from mobile apps alone on the Indian context — the reason being that the PC penetration in the country was not more than 30-35 per cent earlier. With the advent of mobile — and now, mobile Internet — that is where the user base is expanding most. So, a mobile app alone approach may reap success here, he explains.
“However, if we take China where it is 50 per cent PC base and 50 per cent mobile base, it has to be both mediums of penetration. The country, its Internet, mobile and PC penetration play a role in defining the strategy other than the respective company’s business and marketing strategy.
“There are however also examples of some very popular and leading players in the business that have continued with both the mediums to ensure that the reach and accessibility is wide across and they do have the necessary bandwidth and financials too to manage the same,” he concludes.