Amidst the recent escalating tensions between Indo-China borders and on grounds of national security and sovereignty, the Central government announced a nationwide ‘Digital Strike’ under Section 59A of the IT Act, in which 59 popular Chinese Apps were banned. While China has had a lot of experience in shutting countries out and less with putting a stop to itself, India is turning the table and opening a new front in the Internet wars where access to information is the modern day ‘Brahmastra’.
While few are terming the move as yet another sixer by the Modi Government, fingers are also being pointed on the domino effect on the Indian economy. Let’s have a closer look at the major Chinese apps banned, their reach in the Indian territory, impact of the ban on India. We would also focus our understanding on what it has in store for the artists, content creators, advertisers, marketers, influencers along with digital entrepreneurs.
Amongst some of the major apps that have been banned from the Indian territory are leading social media apps such as TikTok, Helo, Likee, Bigo Live. Popular with brands and influencers, the social media app, TikTok, operated by Bytedance (India) Technology Pvt Ltd had a base of more than 200 million users across the country, which accounts for 40% of its 500 million users worldwide and comprises 611 million downloads. TikTok Chief Executive Kevin Mayer mentioned highlighting that more than 3500 direct and indirect employees were associated with the app in India which might get affected. As per SensorTower, user spending alone generated a revenue of $924,000 between June 2019 to June 2020. Helo, TikTok’s sister app, which has a presence across various regional languages, has over 50 million users in India. ByteDance, which owns TikTok and Helo, as mentioned in year 2019, had plans to invest $1 billion in India in three years which would potentially impact job creation. The other popular apps are Bigo Live, a live streaming app and Likee, a video streaming app. Likee had 6.1 million new installs, while Bigo Live had 2.1 million users in June, as per SensorTower. Likee made a revenue of $776,000 in India through user spending in the app. In 2019, the company partnered with Salman Khan Films to promote Dabangg 3. Likewise, it has also partnered with several other platforms in association with leading Indian brands.
India is not amongst the top most revenue generating geographies for the app. In 2018-19, Bytedance India generated revenues of Rs 43.6 crore, and the company targeted revenues of Rs 100 crore for the following year. In the US, the app has been downloaded only 165 million times, with revenues clocking to $86.5 million (over Rs 650 crore) in 2019. Similarly, China, with nearly 197 million users, generated $331 million (around Rs. 2500 crore) during the year, according to Sensor Tower. But what makes India an important target geography for the app is the fact that a decline in the user base would severely affect the valuation of these apps.
The impact of the ban has been seen far and wide. Indian exporters depend on these apps to strike their deal across the two nations, students and job hunters looking for opportunities in China or vice-versa use these app as a platform to communicate with their prospective employers, and Chinese investors see a “negative sentiment” and reduced confidence in Indian companies such as Pay Tm, Big Basket, Dream11, MakeMyTrip and Swiggy. These Indian startup unicorns approaching Chinese investors for their companies would face a major blow. However, let’s gather our focus towards the impact on artists, content creators, advertisers, marketers, influencers and entrepreneurs.
The App had democratised the online market, making its presence felt across millions of people in varied genres such as artists, influencers, story-tellers, educators, and performers in 14 different languages including tier 2/3/4/5 cities of India to experience social feedback and fame (however small/big) for the first time in their lives, much like how Tier-1 city folks like us experienced it more than a decade ago on Orkut, Facebook and then on Twitter.
I recently read a Twitter entry which stated:
‘TikTok was the Doordarshan of social media in India’
Some of the top stars on the platform had a follower base of a whopping 40 million and earned between Rs 2 lakh and Rs 5 lakh per post, with at least 4 deals per month. The app grew in popularity after the announcement of lockdown when many bollywood celebrities reached out to their fans through the app.
The platform had caught the eye of advertisers and ad spends as well as the influencer community. It is the space to target Gen Zers as 41% of its users fall in this age bracket. This is one of the reasons why brand custodians rank it as the top 3 platforms for influence rs. It also had a higher engagement rate and average time spent per day than Instagram. Though brands do feel the pinch with the void created by the ban of these apps, they are quickly changing their strategies and bases to other platforms. For the PR agencies, it would be a testing time. The companies will have to manage the corporate reputation of the brands. Also, agencies will have to show the next steps to companies armed with questions about the future of their pages on these apps, the next hashtag challenge and the influencer campaigns in the pipeline.
This ban has given a host of opportunities to the technology/digital entrepreneurs to build some of their most highly used internet products which use creativity, innovation, trust and security to create an ecosystem which generates jobs. The recent Atma Nirbhar App Innovation Challenge launched by the Ministry of Information and Technology in partnership with Atal Innovation Mission is another major boost for the Indian tech entrepreneurs and start-ups. It would support the promotion of existing and new apps alike. A host of venture capitalists and investors, including Balaji S. Srinivasan and Prayank Swaroop are coming forward to back the right app ideas.
Established international social networking organisations such as Instagram and YouTube have launched their own versions of short-video platforms such as Reels for Instagram and Shorts for YouTube. Not only this, a host of Indian alternatives to these apps are fast filling up the gap. The Indian alternatives are Chingaari, Roposo, Mitron. Roposo has a user base of 100 million and 25 Mn monthly active users. The founder of the esteemed organisation, Mayank Bhangadia said in an interview to Hindu Business Line that in approximately 24 to 36 hours of the app ban, they saw a growth of 10 million users. There has been a similar spike in revenues generated through advertisement. Plans for expansion include advertisement for artists and creators themselves and addition of new filters and editing tools. Additionally, content creators also receive a coin every time a user views their content. This can be later exchanged for money. They have also signed brand partnerships with e-commerce, healthcare and fitness site.
There is no denying the fact that the market is in the phase of disruption. However, that’s what any new change calls for which essentially marks a path towards the era of renaissance. The government is giving us immense opportunities. I would like to urge all the risk takers – the sons and daughters of the hinterland of technology – get the eye of the tiger, a fighter to shape the road ahead to Digital India – a counter to the Chinese Digital Silk Route. Let’s dance together through the fire and get back our lost glories of ‘Sonchiriya’. Let the world hear us roar, a ROAR LOUDER THAN A LION!