Strategic management
Case Study on: HIKE-rise & fall
Introduction: Hike Messaging app was a cross platform instant messaging app for communication on
the internet. Hike was launched on 12th December, 2012. It was a joint venture of Bharti Enterprises
and Softbank. It was a free software available on various mobile platforms founded by Kavin Bharti
Mittal and was one of the first instant messaging apps made in India. Hike, within a few months of its
launch, caught user’s fancy (users who were youth below age 30) almost within a very short period. On
the other hand, its top competitor Whatsapp was picking up slowly but surely in India at the time. India
being a huge market, there was undoubtedly enough space & scope for another company to succeed.
Hike did just that. It kept adding millions of users month over month with addition of smart features
such as free unlimited SMS called Hike Offline, in-app news, cricket scores, personalized stickers store
unlike any other app; and added many hi-tech features over time such as Hike ID, Hike Wallet, Hike
Direct, Hike Web (some of these outperformed WhatsApp) to enhance user experience while keeping
user privacy & security intact. Hike was hailed as the youngest startup in India to get a unicorn title, with
a valuation of over 1 Billion within just 4 yrs of launch i.e. around Aug 2016. Hike was most certainly the
best & biggest competitor of other widely popular Instant Messaging apps.
WHAT HIKE OFFERED-
Hike Stickers: Hike Run measured the number of steps you took every day and you could share the
score with your friends. The counter used to reset each day and you could also compare your previous
performances and see how you’ve improved your numbers with time. To make things more exciting,
Hike Run maintained a daily leaderboard, seen only by the user's personal network, to provide
motivation to be at the top. Hike had a library of almost 20,000 stickers in 40+ local languages. These
stickers were exchanged over 300 million times a day. To further localize the experience, Hike
introduced stickers that had both national and regional festivals like Holi, Diwali, etc. Going a step
further to localize, Hike even had a library of customized stickers for over 500 colleges across India.
Hidden Mode: Focused on the 15 - 24 years segment, one of the very popular features that Hike
introduced was the Hidden Mode. It allowed users to hide their chats quickly and elegantly.
Hike Run: Hike Run measured the number of steps you took every day and you could share the score
with your friends. The counter used to reset each day and you could also compare your previous
performances and see how you’ve improved your numbers with time. To make things more exciting,
Hike Run maintained a daily leaderboard, seen only by the user's personal network, to provide
motivation to be at the top.
Blue Packets: Blue Packets were nicely designed envelopes where users could insert money and
send it to their friends and surprise them with personal messages along with filters on them. By
introducing Blue Packets, Hike changed the way people send and receive money. It became more fun
and interesting.
Text to Stickers: Hike was the first messaging application to introduce Text to Stickers. This was
an amazing feature that allowed any text typed by the user to be converted into a cool sticker to make
chats more vibrant.
Competition of Hike Messenger
Hike Messenger’s major competitors were messaging platforms like WhatsApp, WeChat, Signal, Viber,
and Telegram. WhatsApp was one of the top rivals of Hike. All these platforms have an appreciable
market standing and each has its own set of user bases. Though Hike provided a unique kind of
interface, it still faced cut-throat competition from these platforms.
Rise of Hike
Hike was the youngest startup in India to get a unicorn title within 4 years. With Kavin Bharti Mittal
coming from a rich background and having good connections, Hike was flush with cash from marquee
investors like Bharti Softbank and Tencent etc. Hike acquired companies such as CREO for advancement
in technology. Hike gained a base of 15 million followers within a year and was rated #1 app on Android
Playstore, iOS App store, and Windows store. In the span of 5 years it gained more than 100 M users.
Hike was a great start-up giving an amazing overview and it was valued at $1.4 Billion. It had, in a very
short period, captured a sizable portion of the Indian market. Hike reached 35 million user base in 7
years; 60% being in India and the rest in Germany, the Middle East and other countries. It had some
remarkable marketing strategies and tie ups to reach up the ladder
Hike Customer Acquisition Strategy
1. Hike had affiliations with big brands such as MCD, dominos, CCD to provide vouchers/discount
coupons to the customers. Users appreciated the app for rolling out such benefits which eventually led
them to get new consumers.
2. Hike targeted customers via the incorporation of local languages and regional stickers in the app to
draw a personal connection. This helped the company gain the attention of local people who could now
communicate in their own language comfortably.
3. Hike launched a reward program to attract customers. The company gave monetary benefits or
coupons to people who recommended the app to their friends, family or other people.
4. In August 2013, Hike ran a full-fledged digital marketing and brand campaign across TV, radio, and
Cinemas, titled “Keep your friends close”, which became a big hit. The company then started taking in
real-time feedback from the customers to improve and develop their product.
5. Hike tied up with Airtel and ran a scheme to offer free data for three months incentive to users with
Airtel postpaid connection, which helped Hike to get a good no. of consumers, thus increasing its
customer base and at the same time targeting potential customers.
6. Hike gradually moved to other markets and tried its hand on making Hike a one stop solution for
everything, where a person could find news, games, and messages at one place. Thus they wanted to
increase the app interface time of the customer.
Hike Acquisition
Hike acquired four organizations - CREO, InstaLively, Thought Mechanics and Zip Phones. All these
acquisitions took place in the first five years of Hike’s launch. CREO, a company dealing with designing
and developing an Android-based operating system for smartphones, personal computers and tablets,
was Hike’s latest acquisition. Other companies acquired were a web development company called
Thought Mechanics, a live event broadcasting organization called InstaLively and Zip Phones, a startup
which provided free voice calling facility.
Fall of Hike
The made-in India technology, Hike, rose to great heights but finally succumbed to global competition.
The app has been officially removed from Google play store and App store. The reason behind this move
wasn’t clearly mentioned but there are a number of reasons identified that could have potentially led to
this decision.
Reasons of Downfall
Selective Marketing: Hike focused on the age group 18-30. Its negligence to the older
population could have been a negative factor.
Competition & Controversy: The global dominance of tech giants was one of the major
factors of Hike falling out. Hike couldn’t beat its competitors WhatsApp, Telegram, WeChat and a few
more to become the top of its game. Kavin Mittal mentioned in his tweet on January 10, 2021 “Global
network effects are too strong (unless India bans Western companies)” Whatsapp was growing fast
because of its user-friendly interface and easy to use features. Facebook blocked an option in its
advertisements which allowed people to visit the Hike official website. People assumed it to be an initial
technical glitch, but later Facebook confirmed that certain products and services can’t be advertised on
its platform.
No USP: Initially, their USP was providing sticker stores. But consequently, WhatsApp too added the
sticker features, making Hike just like any other messenger.
Bad Marketing: Hike’s marketing team does share the blame for the app’s failure. There wasn’t
really any buzz around Hike as compared to its competitors WhatsApp, Telegram and Signal. Hike wasn’t
as much talked about as its rivals.
No Proper Revenue Model: Hike’s marketing team does share the blame for the app’s failure.
There wasn’t really any buzz around Hike as compared to its competitors WhatsApp, Telegram and
Signal. Hike wasn’t as much talked about as its rivals.
Timing:
Timing of its launch: Hike was launched two years after WhatsApp was introduced in 2010. The
latter came at a time when people were using Facebook and other social networking websites.
WhatsApp came as a completely new messaging app and therefore acquired a huge user base. It
was made for mobile use and not computers. WhatsApp was relatively easier to operate and
without any complex features which made it extremely difficult for Hike to gain an upper hand
in the market.
Timing of launching its apps features - Hike was bringing up its features one by one in a span of
just a few months. Hence, users were finding it difficult to adapt with them and when they got
familiar with it, Hike launched another one. The cycle kept going on and Hike failed to sustain its
consumers.
Wrong timing of exiting - Hike exited at that time when they could have utilized the opportunity
to expand their user base. India had a “Local for Vocal” movement going on where people were
supporting Indian products and boycotting the foreign ones. Moreover, a tussle was happening
between WhatsApp and the Indian government.
Shutdown
Hike took to twitter and announced the closure of its messenger app on January 6, 2021. “Today, we are
announcing that we will be sunsetting StickerChat in Jan’21.” They gave their users a deadline till
January 14, 2021 to migrate their data. Founder Kavin Mittal didn’t give any particular reason for
shutting down the service but mentioned in their tweet that global forces were too strong for India to
have its own messenger. The company now focuses on its other two apps- Vibe and Rush.
Vibe was first started within the Hike app as HikeLand and later emerged into a social media platform
and renamed Vibe. This is supposedly an approval-based community app. Rush, on the other hand, is an
online competitive gaming platform where users can play against each other in skill-games and win real
money. The platform is a community of real players only without bots. These comprise of arcade games,
skill games and quizzes, among others.
What Could Have Been Done Instead
1. Hike had a golden opportunity when Whatsapp’s new data-sharing policies emerged. It could have
used it for acquiring users. However Signal picked up the pace. It was very intriguing why no one paid
attention to Hike till Kavin’s tweet showed up in Jan 2021 concerning motioning the electronic
communication app down. If Hike would have used a method to upsell itself within the name of
Encryption of data and better privacy measures, the users who gave up Hike earlier might have
returned. This was a major opportunity which hike didn't seize while on the other hand SIGNAL acquired
a lot of new users by taking advantage and strategizing on this opportunity.
2. During lockdown there had been a surge in the number of users and time spent on social media. Hike
could have very well captured more audience here, and laid out better policy and user acquisition
strategy to retain the user at the same time expand them. Moreover, Hike also found a surge in its
active users during the country’s lockdown in 2020. The incident confirms that there was a scope for
Hike to come back.
3. Hike could alternatively have incentivized on the ‘Vocal for local’ movement, and projected itself as an
MADE IN INDIA app when Whatsapp (its top competitor) had played out its new privacy policy fiasco. It
was a great opportunity for hike to leverage the campaign to retain as well as acquire more users and
stay in business and even expand exponentially. Hike also made a mistake by laying out new apps thus
forcing its user base to divide into two which broke the user flow and disrupted the smoothness of their
services.
Submitted by
Puspendra Kumar Rana
Rupali Anjankar
Sonali Kuril
Ritika Wasnik
(MBA 1st year)
