India's "Twitter" SMS GupShup Grows To 26 Million Users, Eyes Expansion To Southeast Asia

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India is a huge market for social networks, with Facebook, Orkut and even Twitter vying for a share of the growing number of web users who are increasingly flocking to social networks in their day-to-day routines. One Indian social network is seeing considerable success on a different platform: mobile. SMS GupShup, a Twitter-like service in India that is primarily accessed via SMS, has grown to 26 million users and now accounts for 5 percent of all text messages sent within India. We previously wrote about the network here.

Part of SMS GupShup’s success has been due to the immense popularity of mobile devices in India. Currently there are 550 million mobile phone users in the country and only 50 million web users, says SMS GupShup’s CEO and co-founder Beerud Sheth. With a 10 to 1 mobile-to-PC ratio and SMS serving as the most popular communications platform, the market is ripe for SMS GupShup to take off. SMS GupShup is currently processing over 480 million messages a month and accounts for an astounding 5 percent of all texts sent within India. Sheth told me that other countries are on the horizon for SMS GupShup, with a focus on entering Southeast Asian markets, including Indonesia, Thailand and the Philippines.

And the microblogging platform has evolved into a social network of sorts, with the ability for members to create and join groups. Sheth says that over 2 million groups exist on the community with the average SMS GupShup member belonging to 2.75 groups. SMS GupShup also has an advertising model in place, with high profile brands such as Microsoft, Cadbury, Nokia, Ford, Puma, Maybelline, Dell, and Sun Microsystems all participating in serving ads on the social network. Brands run SMS ads and can also create branded groups, similar to a Facebook fan page. There are also opportunities for branded content on the network; SMS GupShup recently partnered with an Indian car insurance provider and the Mumbai Traffic Police to deliver branded traffic alerts.

SMS GupShup’s variable costs are fees for text messages, and the service has had to implement caps to keep costs under control. Twitter also encountered this cost issue in it’s SMS ventures in India, with carriers were insisting Twitter pay them high fees to make up for all the tweets being received over SMS for free by users. But Twitter recently struck a deal with Indian carrier Bharti Airtel to expand its SMS service in India.

And its not just social platforms that see the opportunity in mobile communication in India. Nokia recently launched WeMeet, a social texting service. Google even ventured into the mobile space in India, with Google Labs India launching an SMS Channel, similar in theory to an RSS feed.

Backed by Charles River Ventures, Helion Venture Partners and others, SMS GupShup (spawned from Webaroo) has raised close to $23 million and has seen tremendous growth over the past year. It should be interesting to see how SMS GupShup will fare in other countries. It seems that in developing countries where mobile phone usage is much highers than web-usage the service is sure to take off. But its questionable if the site will be able to far against a popular web-based microblogging network like Twitter in the U.S.

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