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Swipe right yet?

Dating apps are getting a lot of love, but they have a long way to go before making any profit

“Log kya kahenge!” Dramatic as it sounds, this is how a media professional Vaidehi Khanna’s parents reacted on hearing that she found a man she wanted to marry on a dating app. Quietly, the 26-year-old had created a profile on Hinge, an app owned by the $2-billion Match Group, and had been browsing profiles and going on dates for a few months.

Taru Kapoor, GM-India, Tinder and Match Group

“My parents’ checklist for my life partner was well-educated and high-salaried boy from our caste and religion. But I was looking for more nuanced personality traits such as honesty and broad-mindedness,” she says. After her parents’ initial shock, they were concerned about the app’s reliability. “They took a while to warm up to our relationship, and meeting my partner finally helped us seal the deal,” she gushes.

Khanna’s story isn’t unique. Dating apps are popular now. “In a matter of six years, dating as a concept has seen not arithmetic, but geometric progression in India. These apps are soon going to be the norm,” says N Chandramouli, CEO, TRA Research. While matrimony apps are bigger in terms of user base and revenue, Google’s year in search 2018 revealed that queries related to matrimony grew by only 13% while those for dating grew by 37%.

Sensing an opportunity in the Indian market, international players have pitched their tent here. They include Match Group’s Tinder, Hinge and OKCupid, and Priyanka Chopra Jonas-backed Bumble. Domestic players include Truly Madly, Aisle, Andwemet and Sirf Coffee. In all, there are close to 25 such cupids flying about (See: Hitting it off). According to Statista, online dating market is expected to grow at a CAGR of 5.2%, to $77 million by 2024 (See: Where is the love?). 

Dating is catching on in India because we live differently now, according to Chandramouli. There is the acceptance of live-in relationships, rise in the number of hotels allowing unmarried couples (StayUncle, Oyo’s Relationship Mode and couple-friendly filters on hotel aggregators) and scrapping of repressive laws such as Section 377, among other things. And according to Taru Kapoor, GM-India at Tinder and Match Group, the apps are liked for the options they offer. “People want a lot more choice in their life than their previous generation, be it in career, dating or marriage. On dating apps, they can express themselves freely without anyone judging them,” she says. A person could find anything from love, marriage and good friendships to casual flings and hook-ups. These platforms also accept various sexualities and gender identities. In fact, Tinder supports as many as 23 different genders.

Shruti Gupta, Brand manager, OkCupid IndiaKapoor’s view is echoed by Shruti Gupta, brand manager, OkCupid India, which was founded in 2004 by Harvard mathematicians Chris Coyne, Christian Rudder, Sam Yagan, and Max Krohn, and entered India in 2018. “What may have been a place of experimentation or curiosity just a few years ago have now become a socially acceptable avenue for finding relationships,” says Gupta. There are also the macro changes, reminds Navin Honagudi, MD of Kae Capital, such as growth in internet users, increase in smartphone penetration and the younger demographic. He invested in Truly Madly in 2014, the biggest Indian dating app with a user base of nearly eight million. It is now set to be launched in 13 new languages, starting with Hindi and Marathi this year.

New-Age MatchMaking

Tinder has caught on so well that ‘swipe right’ has come to mean a ‘yes’, and ‘swipe left’, a ‘no’. But international apps such as that and OkCupid have tried-and-tired methods. Instead, homegrown start-ups such as Andwemet, Sirf Coffee and Aisle put forward a more nuanced style of matchmaking.

Able Joseph, Founder and CEO, AisleFor instance, Aisle, which focuses on the urban working professional above the age of 26, describes itself as a high-intent app. On it, you can only send three invites in a day. “Dating apps are like gambling at a slot machine, where you hope something will click. But Aisle is for a more mature user who knows exactly what they want,” says Able Joseph, founder and CEO, Aisle.

Similarly, Andwemet, founded by Shalini Singh in 2019, caters to users in the age group of 25-60. “On the platform, users are asked upfront about minute details and life choices, including relationship expectation – live-in, marriage, undecided,” says Singh. A user also has to upload his KYC on the website, which is deleted after verification by the moderatoRs. Once the profile is created, users can contact people they like after answering three ‘priority’ questions, which could be as basic as ‘do you have a pet dog?’ or as bold as ‘are you willing to have no kids?’ Neha Doshi, an entrepreneur based in Mumbai, says that she had tried other dating apps before logging on to Andwemet. “Here, the profiles are verified and honest. I like knowing where they stand on my top three deal-breakeRs. It makes conversations more honest from the start,” she says. 

Shalini Singh, Founder, AndwemetGoing one step further, Mumbai-based Sirf Coffee offers personalised match-making service. Anyone and everyone are not welcome on it. Every applicant is interviewed through Skype or in-person, and after an internal review, he/she is onboarded, according to Naina Hiranandani, COO and co-founder, Sirf Coffee. Their membership fee ranges from $400 to $800 for six and 12 months, respectively. The date is set up by the Sirf Coffee team with both users receiving just a short description of the person they will meet. After that, it is upon the individuals to take it forward (or not). Though Sirf Coffee has a limited user base of close to 1,200 currently, their success can be gauged by the fact that 70% of their ‘blind-dates’ (they have set up 10,000 over the last six years) culminate into second dates. Twenty-five per cent of the clients renew their subscription annually.  

“I needed someone who could do the scouting for me, and Sirf Coffee spent time getting to know my preferences and criteria in detail,” says Dubai-based Navin Shah, who works in the hospitality and service industry and is soon going to get hitched to a girl he met through the service. Sixty per cent of the users on Hiranandani’s app are women. It is rare, because on most apps 70-80% of the users are men.

Snehil Khanor, Co-founder and CEO, Truly Madly

Wooing women

Apps are now going the extra mile to correct this imbalance. Truly Madly’s co-founder and CEO, Snehil Khanor, says that women are choosier. “Men tend to like 77% of the profiles they see, whereas women like just 7%,” says Kapoor whose app has five million useRs. Therefore, the answer lies in better curation of the feed for women, which the app now does. Truly Madly also allows women to hide their profile from other users, to protect their privacy. Their details will be visible to another user only if they ‘like’ the other profile. Similarly, in September 2018, Tinder launched a feature called ‘My Move’ exclusively for women. If a woman chooses this option, only she can make the first move or initiate the conversation.

But perhaps the biggest effort made in this direction is by Bumble, started by Tinder's former VP of Marketing, Whitney Wolfe in 2014. The app allows a conversation to start only if the woman initiates it. “Wolfe firmly believed it was important to flip gender norms on their head,” says Priti Joshi, vice president - strategy, Bumble. The platform also allows users to make connections through Bumble Bizz, Bumble BFF and Bumble Date for professional networking, friend-finding and dating, respectively. In India, where it has two million users, Bumble also allows women the option of displaying only the first initial of her name. “This ensures that she can’t be found on other platforms and harassed or cyberbullied by those she doesn’t want to connect with,” says Joshi.

Then there are security features that are common for all. For example, on Truly Madly, every profile first goes through a mix of artificial intelligence (AI) and manual moderation process. “We weed out married men and women. So we have trend algorithms that look for vermillion marks on the forehead, wedding rings and try to verify age. We reject 25% profiles in a day and 7% of those we reactivate after they re-appeal. We get a lot of bad reviews because of that, but we think it is an important trade-off to build a trustworthy community,” says Khanor.

Madhukar Sinha, Founding partner, India QuotientA user is also assigned a trust score, earned by connecting his/her profile to Facebook, LinkedIn, phone number, government ID and Passport. To eliminate the chances of people using ‘corrected, filtered’ images or pictures of celebrities on their profile, the start-up has also introduced ‘selfie verification’. In this, using facial verification, the platform ensures that the face is the same as the face on the photos uploaded. “As platforms solve the problems of safety, security and introduce dating etiquette in India, they will likely see higher growth as they have seen globally,” says Madhukar Sinha, founding partner, India Quotient.

It’s Complicated

Despite all the trouble the app-makers are taking, they are not really making much money. Sirf Coffee, which asks for an upfront membership fee, is one of the few which has turned cash-flow positive. Hiranandani says that they broke even within the first three months of launch in 2010. Most other companies operate through a freemium model, that is, the basic service (of surfing and fixing dates) is free and added features are chargeable, and they refused to share their revenue numbeRs. Added features of the various apps include higher visibility of profile, higher reach, ability to send more likes, access to viewing everyone who already have swiped right on one’s profile and re-matching with expired connections.

With the freemium model, Truly Madly managed to make a modest profit of Rs.230,000 in FY18 even as its revenue shrank to Rs.36.1 million from Rs.72.1 million in the preceding fiscal. Subscription contributed over 54.2% of total revenue — by charging between Rs.399 and Rs.3,599 for various subscription periods; the rest came from advertisement. Khanor admits that just about 3% of total users pay. Aisle’s Joseph, too, says that getting people to pay is one of the toughest challenges. With over 1.3 million users, Aisle’s revenue has risen from Rs.31.8 million in FY18 to Rs.71.1 million in FY19, significantly lesser compared to e-matrimony websites.

Ami Shah, who worked on a paper exploring engagement on dating and matrimony platforms, found that while engagements on dating apps are better; monetisation of matrimony apps are stronger. “Firstly, parents (who often have higher disposable income) tend to buy paid plans on matrimonial apps. Secondly, need frustration on dating apps (not being able to find a partner for long) results in monetisation of matrimony apps,” says Shah, who is also co-founder of a Mumbai-based digital marketing firm, IntelliAssist.

Murugavel Janakiraman, founder and CEO of Matrimony.comMatrimony.com, which holds 60% of the e-matrimony market, has seen a steady increase in its subscriber base even after the influx of dating apps — from 2.4 million in FY14 to 3.7 million in FY19. Within this, the number of paying subscribers (paid subscriptions starts at Rs.4,900 for three months and can go up-to Rs.23,000 for three months for assisted service) rose from 571,000 to 731,000 (approximately) in the same period. Its revenue from matchmaking services grew from Rs.2.80 billion in FY17 to Rs.3.35 billion in FY19. (The company also earns significant revenue through their marriage services vertical). Murugavel Janakiraman, founder and CEO of Matrimony.com, says, “Dating is just exploratory, not conclusive. On our platform, the intention is clearly spelt out.” He adds that this isn’t ‘arranged’ marriage, but a way for singles to arrange their own marriage as close to 70% profiles are handled by the singles themselves.

Founded in 1997, the company has 15 regional domain names including Hindi Matrimony, Bengali Matrimony and Telugu Matrimony. To keep the platform contemporary, Janakiraman has also introduced six-point verification called Trust Badges in 2019. These are earned by feeding details such as mobile number, selfie, location, salary slip, education certificate and government-issued ID. “This is fully encrypted and not visible to otheRs. It is only to facilitate back-end check from our end to validate the claims,” he says. They have also introduced Secure Connect, which enables women to hide their phone numbers and yet receive calls from interested matches.

With all the contemporising of the brand, one figure should be worrying Janakiraman. Matrimony.com’s revenue growth number has plunged from double digit high of 44% in 2012 to single digit 8.92% in 2014. After briefly picking up, it dipped again to 3.87% in FY19. Dating is not easily wished away then. “The awkwardness around the concept will subside gradually,” says Chandramouli.

He believes that the apps operating here will enjoy the success they have seen globally. Maybe he will be proved right. After all, anywhere in the world, all you need is love.

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