Chinese short-video app TikTok has consistently generated several headlines a day for the past three weeks after the Indian government decided to ban 59 Chinese apps in late June. Faced with the prospect of losing its largest overseas market along with revenue to the tune of $6 billion, TikTok was the first app on the banned list to open up negotiations with the government.
Since then, the app has been taken down from the Google Play Store and App Store in India and existing versions have been blocked from users’ phones. Citing security as the foremost concern, the Indian government shows no signs of backing down.
Why then are analysts at eMarketer optimistic about TikTok’s future growth in the country that banned it?
124.9 million TikTok Users in India in 2020
In a report published on Tuesday, eMarketer revealed that TikTok’s growth in India will clock in at 58.1% YoY by the end of this year, granted that the ban gets lifted. The app which closed with 79 million users in 2019, and had gained an additional 40 million by the time of the ban, is expected to capture almost 125 million monthly active users in India when this year comes to a close.
The report also highlights that the number of Facebook users in India will reach 262.1 milion by the end of 2020 while Instagram and Twitter will have 79.1 million and 31.9 million active users, respectively.
In 2018, just after a year of operating in the country, the app surpassed Instagram as the most widely used social networking platform in India and that trend has remained unchanged ever since. At the time, it was at the bottom of the big tech pyramid, with its closest competitor being Snapchat. Even back then, TikTok succeeded in surpassing Snapchat by having double the users, and in 2020, this supremacy would’ve multiplied six-fold.
eMarketer clarifies that this projection was computed before the ban took place, but it stands by a hopeful future for TikTok in India. This tenacity is rooted in a large number of smartphone users in India, cheap data plans, TikTok’s localized and regional content, and its ability to attract influencers or monetize the content of its biggest contributors.
Lifting the Ban: Why or Why Not?
As stated above, TikTok was quick to approach the Indian government in order to resolve the situation it had landed in. In a formal notice on his official Twitter, TikTok’s Indian head explicitly stated being in compliance with data protection and privacy laws mandated by the government. The company further assured the public and authorities against sharing Indian users’ data with the Chinese government.
Since then, further developments related to the discussion with the India government has been unclear, but TikTok’s parent company ByteDance seems confident that this ban is not here to stay for long.
This leads us to another significant junction in this matter. ByteDance has been considering major reformations not only for TikTok but for all other apps they have developed for predominantly overseas markets, including the likes of Helo, another one of ByteDance’s apps that got banned in the country.
These reformations, however, are not just specific to India, but are larger in scope, as the pressure of possible bans in the US and Australia is becoming imminent.
In recent times, many reports have surfaced highlighting ByteDance’s determination to dissolve its image as a company based and headquartered in Beijing. Internal sources have revealed that Singapore, London, Los Angeles, and New York are some of the locations being considered for the new headquarters.
In all other related endeavours, the US seems to be the centre of attention. Earlier this year, Kevin Mayer, the former head of Disney’s streaming business, was appointed as TikTok’s new CEO.
More recently, TikTok’s job postings expanded to cities outside of China, such as Warsaw and Jakarta. Additionally, TikTok has reportedly hired 150 California-based engineers as part of its research and development wing.
All such developments indicate that TikTok management is quite adamant on not giving up on markets outside China. TikTok is leaving no stone unturned to get back to business as soon as possible.
Earlier this week, ByteDance’s CEO also expressed plans to sell TikTok’s shares to stakeholders outside of China at a valuation of $25 billion or more, in order to further disconnect its associations with China. It is expected that existing US shareholders will lead such a buyout when it happens. This would essentially make TikTok a US-based company and completely sever its links with China.
However, these reforms come with their own set of challenges. Many ByteDance employees are still reluctant about this structural change. More importantly, there are engineering-based conflicts to smooth out first, since TikTok shares its basic programming with its Chinese counterpart, Douyin.
Nonetheless, there is ample evidence to point to considerable changes in TikTok’s future operations, and in such an event, it won’t be all that surprising if the Indian government lifts its ban.