TikTok Has An India Problem
Last week, India’s Ministry of Electronics and IT blocked 59 apps developed by Chinese firms "which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order."
"The Ministry of Information Technology has received many complaints from various sources including several reports about misuse of some mobile apps available on Android and iOS platforms for stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India," the Indian government said.
The most notable app included in the ban is TikTok. The ban hits TikTok particularly hard, as India has accounted for more than 30% of the app's lifetime downloads to date, according to SensorTower data from April.
TikTok's recently appointed CEO Kevin Mayer was quick to distance the company from China and point to TikTok's commitments to India.
"I can confirm that the Chinese government has never made a request to us for the TikTok data of Indian users," Mayer wrote in a letter to the Indian government. "If we do ever receive such a request in the future, we would not comply. The privacy of our users, and the security and sovereignty of India, are of utmost importance to us."
Mayer emphasized that TikTok employs 2,000 people in India and has committed to spend $1 billion in the region, including plans to build a data center in India.
A report from China's Caixin Global cited sources close to TikTok's parent ByteDance as saying the company is anticipating losses in excess of $6 billion as a result of the ban.
The ban has created an opening for TikTok's competitors. India's Roposo said it added 22 million users in just two days following the ban, with the company's CEO Mayank Bhangadia saying "it has spiked so much because of all the love and support."
Another unlikely, yet not surprising, beneficiary of the ban is none other than Facebook's Instagram. Following the ban, Instagram announced it will test its Reels feature in India. The feature is essentially a clone of TikTok, enabling users to create 15-second videos that can be shared throughout the app.
"We’re planning to start testing an updated version of Reels in more countries," a Facebook spokesperson said. "We’re excited to bring this new version to more of our global community."
The implications of this ban cannot be understated for TikTok, which recently saw its private market valuation surpass $100 billion. With more than 30% of the app's downloads coming from India and the country having the second-largest number of internet users globally, TikTok needs to have access to the Indian market to continue its growth.
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