By Jeeta Bandopadhyay

Launched in April 2007, SMS GupShup has grown rapidly achieving a turnover of Rs 7.3 crore in 2009-10. At present, around 34 million users across 3.5 million communities worldwide love to use the platform. Even brands such as Nokia, Cadbury, Dell, Kingfisher and Facebook, among others use GupShup to connect with their customers. With a growth rate of around 310% and projected turnover of Rs 23 crore for 2010-11, the company has been nominated for Nasscom Emerge Top 50 start-up firms.

In a tête-à-tête with Bizxchange, Vishal Nongbet, senior director and marketing head at SMS GupShup speaks about the company’s revenue model, AppShup and reveals his optimism in winning the award.

What was the idea behind setting up SMS GupShup?

In India, there are 12 mobile users for every individual who has Internet access. This points to the fact that while mobile penetration is witnessing an explosion in the country, data penetration remains significantly low. Besides voice, SMS is the only other feature that is ubiquitous across handsets but again limited as it enables only 1-1 messaging.

So, the idea was to set up a group messaging platform, which allows 1-N messaging, create own groups and communities and eventually help connect thousands of individuals who have nothing but a basic handset.

What were the initial challenges?

The challenges were more on the cost side, where infrastructure and bandwidth costs were high and we had no real monetisation model. Soon after the launch, the platform received appreciations from lots of people and the product grew virally. At present, we have economies of scale, huge and talented technical and sales teams, and around 150 brands and 15,000 SMEs that buy our services to reach out and engage with customers.

Has being a part of Webaroo helped the company in leapfrogging the business?

The business definitely has benefited from its Silicon Valley roots. The founding team of Rakesh Mathur and Beerud Sheth brings on board rich start-up experience from companies like Elance and huge corporate experience spanning the length and breadth of IT. This has attracted the best of investors and has helped us grow over a short span of time.

Elaborate with an example how SMSGupShup helps businesses acquire and engage customers.

Compared with mass media, mobile is a much more effective medium as it offers huge reach, together with direct and personal access to anyone anywhere, anytime. The SMS GupShup platform facilitates converting this access to meaningful engagement through the creation of mobile communities. Consequently, it enables businesses to connect with and engage interested users on an ongoing basis through exciting content, games, contests, polls etc, thereby driving repeats and referrals, which is critical to the success of any business or brand. Moreover, brands can get direct feedback from their customers as well as inform, interact and transact with them.

Recently, SMS GupShup helped Pepsi in creating a mobile community, in view of its customer acquisition programme across India. Soon, the community gained 60,000 members, emerging as one of the fastest customer engagement programmes on mobile in the country.

What are the key sources of revenue for the company?

At present, mobile customer relationship management solutions and mobile advertising are our key sources of revenue. We are also seeing traction on some of our carrier-integrated products like ‘Reply-All SMS’, which could be a huge source of revenue in the near future. We have already partnered with Loop Telecom to launch the service in Mumbai.

Rate the importance of product vis-à-vis marketing for a social mobile networking firm like SMS GupShup.

Like most successful social networking products, the product itself has to satisfy a hitherto unsatisfied need of consumers or else you run the risk of being tagged a “me-too” that “also-ran”. SMS GupShup is the first scalable social SMS service of its kind in the world and offers a unique product experience to millions of people who have no other way to connect using basic handsets. With bare minimum marketing, we have grown to become India’s biggest social network. Having said that, we understand the importance of marketing with a product like ours and it is sustained marketing efforts that will take the business to the next level.

What is the next big thing in mobile messaging service?

So far brands have been running SMS campaigns and creating mobile communities. However, a new opportunity in the form of SMS applications has emerged of late. These applications can be customised based on the brand’s needs and as the marketing fraternity recognises the power of SMS in India, the demand for such applications and solutions will keep growing.

Let me cite an example, Vodafone recently partnered with SMS GupShup to develop an application to conduct an auction via SMS using a toll free number. Exclusively designed for low-ARPU prepaid subscribers in the slums of Mumbai having a balance of over Rs 20, the application enables them to bid for essential items such as rice, wheat etc. The winning bids were announced on the spot. The results of this promotion were so encouraging that SMS GupShup and Vodafone plan to roll this activity across another 25 network circles in due course of time.

What is so special about AppShup?

AppShup is our open developer SMS application platform, enabling many-to-one and multi-user interactions. It facilitates rapid creation and deployment of SMS-based services such as contests, polls, surveys etc. Besides, it helps carriers to significantly expand the pool of content partners and reduce deployment cost. It allows easy development and access to relevant user-generated applications, groups and communities, making it a preferred social hub among target audiences. All content shows up on SMS as well as on WAP and Web.