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India's app ban could cost TikTok's parent company $6 billion
Last updated on Jul 06, 2020, 09:04 pm
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Following the deadly Indo-China clash along the LAC, the Indian government announced the decision to ban 59 'unsafe' Chinese applications.
The move affected several services from the neighboring nation, but the biggest impact appears to have been on ByteDance, the world's most valuable start-up and the owner of popular video-sharing service TikTok.
Here's more about the crisis looming over the company.
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Impact
Three ByteDance-owned apps hit by India's ban
![Three ByteDance-owned apps hit by India's ban]( "Three ByteDance-owned apps hit by India's ban")
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When India announced the ban, three services from ByteDance fell on the chopping block — TikTok, Vigo Video and social networking app Helo.
They all were highly popular in India; the hugest blow came for TikTok though, which had created its own space in the short video category, raking in 2 billion+ downloads globally and more than 200 million active users in India alone.
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Market
India was TikTok's biggest market after China
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Following its merger with Musical.ly in late 2018, TikTok grew into a sensation worldwide, especially in India, which became the app's biggest overseas market.
In the first quarter of 2020, TikTok was downloaded 611 million times in the country, making up over 30% of the app's global downloads for the quarter, Sensor Tower reported. This was the double of India downloads recorded last year.
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Investment
ByteDance invested over $1 billion in India
![ByteDance invested over $1 billion in India]( "ByteDance invested over $1 billion in India")
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Bullish on the potential of its content apps, including TikTok, in India, ByteDance invested over $1 billion in its products in the country as well as in an Indian company Dailyhunt.
The company had also set up an office in Gurugram, where a team of over 2,000 people managed its portfolio of apps, and planned to set up a data center in the country.
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Impact
Now, it stands to lose over $6 billion
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Now, in light of the unexpected ban, all three ByteDance apps - TikTok, Vigo Video, and Helo - have become unavailable, completely blocked out of the Indian market.
All of this is expected to affect ByteDance's business significantly, causing the company a loss of about $6 billion, a person familiar with the developments at the company told state-controlled media outlet The Global Times.
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Domination
Will this affect ByteDance's growth?
![Will this affect ByteDance's growth?]( "Will this affect ByteDance's growth?")
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If confirmed, the loss of $6 billion would be significant and much more than the combined anticipated loss of all other banned applications.
Financially, ByteDance, which is valued at over $100 billion, might bear the impact, but it would still lose a very important market and all the possible gains from it.
Additionally, its future product plans may also be affected.
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Developments
Replacements already gaining traction
![Replacements already gaining traction]( "Replacements already gaining traction")
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From what it appears, TikTok, Vigo Video, and Helo have already started losing their market to India's home-grown apps like Mitron, Chingari, Roposo, and ShareChat.
Even Facebook's Instagram is looking at this shift in the tide as an opportunity to expand its footprint in India with its own short video product for Instagram called Reels. It just went into testing in the country.
