YouTube has announced the shutdown of Simsim, a live social commerce app aimed at helping small businesses in India transition to e-commerce. The app was acquired by YouTube in 2021 for $70 million. YouTube has emphasized its commitment to building a seamless shopping experience for viewers and supporting creators’ businesses. While Simsim was seen as a promising initiative, YouTube’s decision to discontinue the service less than two years after its acquisition indicates that the time may not have arrived yet for the micro-influencer-based model to help small businesses in India reach new customers in even more powerful ways. Nonetheless, YouTube is not moving away from the category altogether and plans to introduce more monetization opportunities for creators through an affiliate program and more shopping features across long-form videos, Shorts, and live-streams on YouTube in 2023. The competition in the e-commerce space is fierce, and it remains to be seen how YouTube will differentiate itself and maintain its position as the dominant video platform in India, especially with the increasing expansion of other social media platforms such as TikTok and Instagram into e-commerce.
YouTube Shuts Down Simsim
YouTube has announced that it will be shutting down its live social commerce app, Simsim. The Indian start-up, which was acquired by YouTube in 2021 for a reported $70 million, aimed to help small businesses in India transition to e-commerce by connecting local businesses, influencers, and customers through its platform. While Simsim was a promising initiative, YouTube has decided to discontinue the service less than two years after its acquisition. However, the company has emphasized its commitment to building “a seamless shopping experience for viewers and supporting creators’ businesses.”
With over 450 million users, the South Asian market is the largest for YouTube. The company has long viewed India as a testbed for experimentation, with initiatives such as YouTube Go and Shorts being two prominent examples. The acquisition of Simsim came at a time when YouTube was exploring ways to expand the platform into an e-commerce engine. The thesis in India, according to Rohan Malhotra of Good Capital, which has backed Meesho as well as Simsim, was that “micro-influencers are more effective at building a targeted audience, creating entertaining experiences, building trust, and personalizing messaging.” The acquisition of Simsim was seen as a way to leverage the rising popularity of video and creators to help small businesses and retailers in India reach new customers in even more powerful ways.
However, the time may not have arrived for this thesis yet. Facebook shut down its live shopping feature last year as it shifted its focus to Reels. But not everyone is giving up. Amazon, which acquired the Indian social commerce startup GlowRoad last year, has introduced a QVC-style live-stream shopping service in the country. Amazon Live brings an army of more than 150 creators to host live-streams and plug products in the videos. The idea is that influencers with already a large following will drive their fans to the shopping app and influence them into buying products. They get a cut each time they are able to make a sale.
YouTube is not moving away from the category altogether, however. A spokesperson for the company has said that YouTube will be “working with creators to introduce more monetization opportunities for creators through an affiliate program and more shopping features across long-form videos, Shorts, and live-streams on YouTube in 2023.” The move comes as YouTube faces increased competition from other social media platforms such as TikTok and Instagram, both of which have been actively expanding into e-commerce. The competition in the space is fierce, and it remains to be seen how YouTube will differentiate itself and maintain its position as the dominant video platform in India.
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