YouTube is shutting down its Simsim live social commerce app less than two years after acquiring the Indian startup, but insists it is committed to building “a seamless shopping experience for viewers and supporting creators’ businesses.”
Simsim helped small businesses in India transition to e-commerce by leveraging the growing popularity of video and creators. The startup’s namesake app acted as a platform to connect local businesses, influencers, and customers.
YouTube acquired Simsim in mid-2021 in a deal that valued the Indian company at more than $70 million, TechCrunch first reported. At the time, YouTube said the acquisition will allow the video streaming giant to help small businesses and retailers in India reach new customers in even more powerful ways.
With over 450 million users, the South Asian market is the largest for YouTube. The Google-owned video platform also sees India as a testing ground for experimentation (YouTube Go and Shorts are two examples). Its acquisition of Simsim came at a time when YouTube began exploring ways to turn the video platform into an e-commerce engine.
The thesis, according to Rohan Malhotra of Good Capital, is: “micro-influencers are more effective at building a target audience (growth), creating entertaining experiences (retention), building trust (greater value) and personalizing messages (conversion). Consumer social platforms (Facebook, YouTube, Instagram, etc.) are unable to monetize significantly through ad-supported models in India; this opens the opportunity for more deeply integrated transactional platforms. New Internet users in India need an interactive seller-led experience to replicate the offline e-commerce experience this market is used to.”
The time for the thesis may not have arrived yet. Another data point: Last year, Facebook shut down its live shopping feature when it shifted its focus to Reels. But companies are not giving up. Amazon, which acquired social commerce startup GlowRoad last year, launched a QVC-style live shopping stream in India.
The retail group’s service, called Amazon Live, brings an army of more than 150 creators to host live streams and connect products in videos. The idea is that influencers, who already have a large following, bring their followers to the shopping app and influence them to buy products. They get a cut every time they can make a sale.
YouTube does not lose hope in this new category either. A spokesperson said Thursday that the company “will work with creators to introduce more monetization opportunities for creators through an affiliate program and more shopping features in long, short, and live streaming videos on YouTube in 2023.”
