Mobile is a massive opportunity only heightened during the pandemic as audiences turned to their smartphones for the comfort food of apps and entertainment. Significantly, though, throughout this period consumer tastes and appetites changed. Users had both the time and the desire to discover new apps and content, a dynamic that allowed many niche apps and content creators to gain mainstream appeal and profits. In some markets, it created a perfect storm of opportunity for hyperlocal news and entertainment that meets consumers where they are.
Continuing with our series of industry interviews [video below], I talk to Jani Pasha, Founder and CEO of Lokal, who is harnessing hyperlocal content in a play that has the potential to make it the NextDoor of India. With a model built on monetizing connections and transactions at the intersection of community, content, and commerce, Lokal is making the most of a booming opportunity.
The model is smart and replicable in other markets. However, Lokal also benefits from a seismic shift in the fabric of its addressable audience. For the first time, India now counts more Internet users in rural areas than cities. And rural users typically aren’t as interested in national and international news developments. Instead, they crave information about civic, political and social issues that impact their towns and villages.
But India isn’t the only country experiencing these shifts. The explosion in the number of Internet users, accelerated by the pandemic, reveals opportunities in regions such as Central and South America. While we might think that growth has slowed, in the last 12 months alone, the total number of Internet users globally has grown nearly 8% to reach 4.72 billion. That’s more than 60% of the world’s total population.
From silver surfers to app initiates, new users in these regions rely on mobile and apps as their personal lifeline for news and information (even education). They turn to them to make daily decisions about how they live and what they buy. Tapping that potential requires companies to micro-segment audiences and tailor content to the needs of towns and communities, not cities. It also helps to focus on fundamentals.
Understanding that new users are likely to be low on the learning curve, Pasha made a bet on voice that paid off. Bypassing bell-and-whistle tech features for a dead-simple interface like voice fast-tracked new users to frequent app use and interaction. Ease of use also increased trust in the app. And that trust allowed Lokal to acquire new users easily through the most effective advertising on the planet: word-of-mouth.
Voice also empowers every user to make a contribution. This enabled Lokal to grow its ecosystem at minimal cost. Users call in stories about developments in their local towns, creating the content that keeps other users engaged and loyal. They rely on the app to learn about offers and events nearby, sparking conversations that end in commerce conversions.
And this is where Lokal’s strategy to be a local content platform, not a content provider, makes business sense. By positioning itself as a super app — one that allows a user to access several services in one place — Lokal establishes itself as the trusted middleman in interactions and transactions. What’s more, Lokal drives in-app activities it can monetize. And let’s not forget that first-party data is gold.
In our interview, Pasha shares how Lokal is training creators to ensure its content is fresh, relevant and relatable for audiences who crave hyperlocal content on their terms. He also weighs in on the future technologies and opportunities local news apps and outlets everywhere should embrace to grow their revenue streams.
WATCH OR LISTEN TO THE FULL INTERVIEW
Peggy Anne Salz, Founder and Lead Analyst of Mobile Groove interviews Jani Pasha, Founder and CEO of Lokal:
Peggy Anne Salz: The pandemic had a massive impact on local media. In the U.S. alone, more than 300 national newspapers closed their doors. Local newsrooms also shut down contributing to the growth in news deserts, that is, cities where people depend on one local news source, if any at all.
But one company is bucking the trend big time, Lokal, a hyperlocal news app in India is not just growing its user base, it’s also making money. It’s a new twist on monetization. And we get the inside track here on Digital Content Next. I’m your host, as always, Peggy Anne Salz, mobile analyst, content marketing consultant, and frequent contributor to DCN, which is a trade association serving the diverse needs of high-quality digital content companies globally. And in this series, we shine a light on the people pushing the envelope. That’s why I’m so excited to have Jani Pasha, Founder and CEO of Lokal. Welcome, first of all, to Digital Content Next, Jani.
Jani Pasha: Hi, Peggy. Nice to be here.
Salz: Absolutely. And coming to us from a very hot Bangalore today, I understand.
Pasha: Yeah, right. It’s very hot, actually.
Salz: So let’s start with Lokal. You have described it as a hyperlocal Tinder because it cuts out the middleman in finding a date or partner. But it’s also a news service. It’s much more than that. So tell me about Lokal and, above all, the user experience.
Pasha: Yeah, Peggy. So we are not just only the Tinder of that place. We do quite a lot. But I’ll tell you the backstory of how we started. So essentially, if you take India, it’s a very diverse country with 90% of its population living in tier-2, tier-3 cities, and towns of India. And these people, most of them, have not traveled further than their adjacent district, because it’s so diverse that with every 50 to 100-kilometre radius, your food habits change, cultures change, language change quite frequently.
So they are staying in those locations of their towns and cities generationally with their parents, grandparents, their homes, and businesses. So naturally, they’re so curious to know about what is happening around them. And there is one more factor that kicked in, in 2016, Jio, a mobile operator who has reduced the prices of internet drastically to make India the cheapest place for 1 GB data for you to use mobile internet.
So then we have this, all these 90% Indians who didn’t have access to internet previously suddenly had access to internet. But essentially, these users are new internet users who are not comfortable in English language. And so then what will they do with the internet, right? So Lokal is the platform which we started it as a platform to deliver hyperlocal content, which is extremely useful for them. And that is the gateway of how they’re adapting to the internet to use internet more usefully in their life. So today, if you take this 90% Indian audience who are new to internet, they are using internet prominently for entertainment, either to… You know, we used to have TikTok. We don’t have it anymore. It is banned by the government. So there are many TikTok parallels and YouTube and Facebook. And then they use WhatsApp for communication.
Apart from that, they can’t use internet meaningfully. And Lokal is actually being that platform giving them the content that they can use and that is of importance for them. Then naturally, making them use internet for multiple use cases. And as at a location, our density of usage increased. We evolved as a platform. So you rightly said we evolved as a Tinder, a place where people find other people to get married. It’s a place for businesses to advertise about their businesses to local community. It’s a place for businesses or people to actually sell their properties. And all this is happening in their native languages of Telugu, Tamil, and Kannada. We are expanding across the country. And we have seen because we have a lot of density in that location, users are adopting platform like crazy with more use cases coming up almost every day.
Salz: But, of course, internet penetration alone doesn’t spell the profits that you’re getting. Part of it is also the experience. You talked about ease of use. You talked about local languages. What are some of the innovations in the UX and UI design that contribute to your success? What does an app with local news need to look like and offer?
Pasha: Very interesting and relevant question, Peggy. So when you talk about these new users right, so all the smartphones have the keyboards in English language. So one challenge when we’re trying to build Lokal was how can you make the content creation easy on Lokal, especially that of text format.
Like, a lot of information about what are the vegetable prices in that location to what are the updates happening in that town, not everything can be captured on video. So they have to be typed. How can you make that easy? So, the first thing that we did, or we built was, making this creation easy, where the user will input the content by voice instead of typing. So they are using voice to actually create the content. And once we started doing that, we realized that creation with our voice is much more convenient than typing on a keyboard because you have to… It’s not natural, right?
Like humans, we speak to each other. So that’s a major shift, right? So if you go on a website today like on Amazon, you have multiple navigation. There are filters, there is sorting, there are multiple pages, multiple categories, but for an interaction, like the natural interaction for a shopkeeper in our location is to go and ask to a small retail shop owner that, “You know, what is the cost of this item? And how can I get it?” It’s natural voice-based input. In India, a lot of businesses are SMEs, sort of small and medium businesses unlike in U.S. where you have a Walmart. You go and then you select. It’s a voice-based communication. You ask, the shopkeeper goes and gets the information, and we’re replicating the same because the technology has caught up.
Salz: Interestingly enough, you were talking about how your audience is very focused on local content. I mean, hyperlocal is really hot in India right now. It’s fascinating that local newspapers, right, newspapers are growing at a double-digit rate. Now, you also have impressive growth results. Now, I’ve seen numbers growing 25% roughly month on month, that’s the last I’ve read, and that’s because of your monetization model. So one is the content, but it’s also a very smart approach to how you generate revenues. Tell me about that.
Pasha: We have built a playbook, via which we launch a location, and we get local content creators in that location to create content, which is very relevant to that community, very, very hyperlocal in nature. And then you get a density of users using the application. And once you have that critical mass of density at a location level, then it becomes a platform where everyone…like, everyone relevant started coming onto the platform, and then they start doing a lot of things, which are monetizable.
Even this is true for people in the West also. Newspapers used to be the place for everything, right, at a location level. You want to do real estate, you want to do jobs, classifieds. Everything used to happen on newspaper. Internet came in. All the small, small parts became large businesses, right? Craigslist, Airbnb, they’re all part of this local newspaper, right? Had these newspapers, you know, are technology-friendly or had they been…had they had that vision or foresight, they would have been the super applications that everything is happening on them.
It’s just that the news publishers migrated their digital publishing online, but they left the rest of the parts for others to pick. In India, we have that opportunity right now, where it’s a very new audience. Internet is being built for them in their native languages. And Lokal is trying to do that with our approach of delivering hyperlocal content. So we don’t consider ourselves as a local news platform. We consider ourselves as a local content platform. So that is the different approach that we are taking compared to newspapers, Peggy.
Salz: That is fascinating because you’re showing that there is a great deal of benefit to being a fast follower here. I mean, you have purposely… It sounds like you have thought this through, Jani. How to be a content platform, keep the social media, keep the connection for yourself and not give it over to the big tech giants or the big social media platforms. That’s the focus. That’s the essence of your strategy. How do you keep the momentum? Because, of course, you’re on a growth trajectory, all of India is on a growth trajectory. And high growth usually means high competition. And how are you keeping these large companies literally from eating your lunch?
Pasha: Our competitive advantage that comes in is based on how hyperlocal we are and how much our team understands the nuances of India, which is very difficult for a tech platform sitting in the U.S. or sitting in some other place to understand and build for it. And these are very new behaviors Peggy. So, as I told you, right, how does a business establish trust digitally? What happens on Amazon is that you go and list on Amazon their ratings, and those are the places how you do it. But how will it happen for a new internet use case, right?
For these very new people where the trust on internet is low, right? How will you do that? It’s a new challenge that we will solve probably for a small business to establish trust very quickly on our platform, and how they can do it. So it’s just that, the nuance, I would say. I would like to summarize that the nuance is very difficult for someone to understand. And hyperlocal in general, is a network effects business, right? You have large density using your platform for multiple use cases, someone coming and replacing it would be difficult.
Salz: It’s interesting that you started monetizing wishes. Tell me about that.
Pasha: It’s just crazy. We never expected all this to happen. We just thought we’re solving a problem of local content not available digitally. When we started creating content, people started coming. So that is the nuance. Like, in India, you have this behavior.
In the small town of India, especially in the southern part, this is very prominent, so that south Indian part, that if Peggy you were a friend of mine and I want to wish you a happy birthday, and I want to do this in a way that everyone in the community would know that I care for you, and we are actually close friends. And how will I do that? I used to either buy advertisement on newspaper with your photo, my photo coming and I’m wishing you happy birthday. Or I am sticking a big banner in the city or town center wishing you a happy birthday.
So the same behavior has been adopted on Lokal now, where the same people who used to do that are posting their wish, like I’m wishing Peggy happy birthday. So there is a standard template where your photo, my photo, will come and I’m broadcasting it to 10,000, 15,000 people in the town, the same purpose they wanted to accomplish previously, now, they’re accomplishing on Lokal. And they have that data to see also that how many people are actually looking at it. So this is being monetized on Lokal. And this is a very, very interesting, unique use case, Indian use case that we are monetizing. And we are seeing a lot more use cases coming like this, and we’re super excited for that.
Salz: You’re also speaking very much as the maker of a content platform. And, of course, a content platform needs creators, needs citizen journalists. It’s all local. So it’s probably very much just about empowering individuals at the local level to grow your business, how do you do that? How do you find them? Train them? How do you make it possible for them to contribute to your platform?
Pasha: The prominent content distribution platforms used to be newspapers like how it happened in the West also. And over the last three, four-, or five-decades time In India, large news publications, this content distribution platforms, have created a lot more content creators in these locations by training them, by informing them, by letting them know what is happening.
And most of these creators in this town used to work for this large distribution platforms like newspaper or television for free, most of them. Why? Because I told you, right, how important these small locations and communities are for these people.
So if I am a creator who can get the word out in a big distribution place like a largest newspaper, I get invites to events happening in the town. Anything big happening in the town, I get to know about it first. So I’m an influencer in that location. So then we have these influencers across India, hundreds of thousands of them. What we simply do is that we have this network of people. We have this digital crunch of hyperlocal content; we just connect them. And that is how we are getting this content.
Salz: You are more than a Nextdoor in India, you’re a content platform, news platform connecting, making business possible, helping merchants. And the reason I have you here today on Digital Content Next is because there are lessons here for publishers everywhere. What do they need to pay attention to if they want to succeed in hyperlocal news?
Pasha: My take is that technology is evolving very rapidly. Publishers should be open to work with new technology coming in. Like, Substack is a great platform where publishers are able to monetize their content. So there are a lot more innovation that is coming. So publishers should be thoughtful and be open to experimenting with these technology players because these new platforms are coming in. And with the creator economy coming in, I’m also very hopeful of how publishers becoming much more important than what they used to be before.
Salz: We started off by talking about the situation particularly in the U.S. where local news, local newsrooms, they are declining, there’s no question. What would be some advice to those that are there to say, “Here’s what you can do to up your game. Here’s what you can do to be sustainable and successful?”
Pasha: I think for small-level publishers, I think what is working for us is being hyperlocal and having a plan. And for us, it’s about figuring out that playbook of how you can get or make the things work at a location. So I think for publishers, especially individual publishers, I think hyperlocal play is going to work, with them also having…who are open to work with, new technology players, which essentially are tools and not platforms possibly.
So Substack is a tool for you to distribute your content. It’s a tool, right? And essentially, for payments, you can use a tool. So someone who is more open to work with these technology platforms and having hyperlocal focus would be able to build sustainable businesses. That is what our belief is. And I can’t compare clearly India to U.S., but in India, specifically, because of how the market is, the maturity of the user towards internet interest, it’s going to be very, very large play in India, especially the focus of hyperlocal.
Salz: So very, very much about being a platform, which is what you’re doing connecting people, connecting businesses, that’s what local content can do really well. The monetization model currently is about classifieds. What’s it going to be going forward as you try to be more and more a super app?
Pasha: So, yeah, Peggy, we are today connecting people, and monetizing on that for the sake of making money, for the sake of selling property, for the sake of improving…giving deals to people, small businesses advertising about their offerings. As the trust increases among these people, we would eventually go into a place where we will enable commerce as well. So that is what the plan is.
We will enable commerce. We will enable these local economies much more digitally. And we are a user-focused company, Peggy. So we have a creator who creates content, and we always think about how we can empower him or her, how can we make their lives easy. Similarly, we have businesses and how can we better help them to get more business. In that, the natural next step is to enable commerce on the platform to have additional revenue streams for them. So we will figure out how we will monetize. But we want to build that use case on our platform. It can be search, it can be something else, we’ll figure out. It’s too early right now. Probably in a year or two, I can tell you a lot more about it.
Salz: Great, Jani. And I think I’ll be back to hear it as well. Thanks so much for sharing your story at Lokal with me today.
Pasha: Thank you, Peggy. And nice talking to you too.
Salz: And thank you, of course, for tuning in and taking the time. More in this series about how media companies like Lokal are taking charge of change in their business. And in the meantime, be sure to check out digitalcontentnext.org for great content, including a companion post to this interview, and join the conversation on Twitter @DCNorg. Until next time for Digital Content Next, I’m Peggy Anne Salz.