Home / World / The TikTok ban in India undercuts ByteDance

The TikTok ban in India undercuts ByteDance

The Indian government announced this week to ban TikTok and other well-known Chinese apps, including the WeChat messaging platform and the UC Browser mobile browser. They are a “threat to sovereignty and integrity”.

The move took place after a border conflict between the two countries earlier this month, in which at least 20 Indian soldiers died.

TikTok has a lot to lose in the second largest country in the world. According to the analysis company Sensor Tower, India was the largest driver for new TikTok downloads and has generated almost 660 million installations since its launch in 2017.

The parent company ByteDance could miss “another 100 to 150 million new TikTok installations in India in the second half of this year,”

; said Randy Nelson, an analyst at Sensor Tower.

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According to Akhil Bery, an analyst at Eurasia Group, the ban is also a major complication for ByteDance and other companies trying to take advantage of the Internet boom in India.

“With only about 50% of Indian online consumers, the Indian market offers enormous growth potential,” Bery said in a research report on Monday. “Well that seems to have been cut off, and the Indian government is unlikely to remove these restrictions.”

It remains unclear when the ban will come into force and how long it could take. Bery noted that the Indian government has not yet clarified how it intends to enforce the ban or whether it intends to seek the ban Google (TogetL) Play and Apple (AAPL) iOS saves to remove the apps. There is also no evidence that the government is planning a larger effort, such as asking telecommunications operators to block traffic related to the apps, which would be difficult to implement, he added.

The ban means the possible loss of many advertising revenues for ByteDance.

In addition to TikTok, Helo is also used, another app that the Beijing-based startup has launched in India. This means that, according to GroupM, the advertising media company, ByteDance will not receive part of the country’s booming digital advertising market, which is expected to grow by 26% this year to almost 280 billion rupees ($ 3.7 billion).

“For ByteDance, it’s a hard blow in the face since they grew 50% in India over the previous year,” said Greg Paull, an analyst with the consulting firm R3.

ByteDance had forecast over $ 1 billion in ad revenue from India this year, most of which Rik estimates were generated by TikTok. In the last quarter of 2019 alone, $ 280 million was reached.

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This is a small part of ByteDance’s total advertising transports, which R3 estimates were around 140 billion yuan ($ 19.8 billion) in 2019.

When it comes to in-app revenue – money that users spend buying virtual items in TikTok – India to date is about $ 1.5 million, which Nelson says is less than 1% of TikTok’s total Sensor tower corresponds. However, growth there was tremendous: Indian users spent around $ 520,000 on TikTok this quarter, up 277% year over year.

TikTok and ByteDance spokesmen did not respond to requests for comments on this story. A spokesman said after the ban was announced that ByteDance “is committed to working with the.” [Indian] Government to demonstrate our commitment to user safety and our commitment to the country as a whole. “

TikTok is enjoying growing popularity worldwide. According to Sensor Tower, the app was downloaded 315 million times between January and March – an amount that the analyst company says has surpassed every other app for a single quarter. TikTok now has a total of over 2 billion downloads, more than twice as many as a year ago.
However, the loss of India could impact the TikTok brand, which is already suffering from increasing control by US lawmakers.

“In the struggle for world domination, the India ban will do them less harm in terms of revenue and profile,” said Paull.

The Indian government’s ban listed TikTok and 58 other apps, including many prominent Chinese. While the Indian government’s statement did not mention China by name, military tensions between China and India continue to escalate after the fatal border collisions.

Many Indians have called for a boycott of Chinese goods and services, particularly China’s dominant technology industry. Beijing said on Tuesday that it was “deeply concerned” about the app ban.

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