Politics
India is the overlooked elephant in the TikToks room
TikToks salvage value seems to vary from location to location. Microsoft is in talks for the assets of Chinese-owned short video apps in the United States, Canada, Australia and New Zealand, while social network Twitter is only interested in the US division, reported Sunday Reuters. India, TikTok’s biggest market by users, is the overlooked elephant in the room.
Microsoft has shown its commitment to the emerging market. Satya Nadella, the boss of the $ 1.6 trillion company, born in Hyderabad, attended the annual meeting of Mumbai-based Reliance Industries, which is worth $ 188 billion, last year. The two companies announced a 10-year alliance that will see new Reliances data centers working with Microsoft Azure Cloud, among others. For Twitter, like other foreign tech companies, India is widely viewed as one of its biggest markets by users. The country accounted for 611 million downloads of TikTok, or 30% of the total, according to SensorTower.
Practical problems could be one reason to hold back. Either buyer will have to convince skeptics in Washington that their deal will sever any backdoor link with the People’s Republic, and will also have to do the same in New Delhi, which banned the app in June. Additionally, Indian users are less valuable to advertisers than those in richer markets, and the need to support a long list of local languages comes with challenges and operating costs. There’s the price, too: TikTok’s entire set could be worth over $ 24 billion, Breakingviews estimates. Such a sum would put a strain on Twitters’ record.
But there are also political reasons for being reluctant. Prime Minister Narendra Modis’ government defends a vague concept of an autonomous India, as does his Chinese counterpart Xi Jinping. This could imply future political support for applications such as Chingari, Mitron and Roposo, all local alternatives of the TikTok type; for ShareChat, which has raised funds on Twitter and has a video sharing app called Moj; or for the Reliances JioMeet video conferencing app, which is surprisingly similar to Zoom and free to start.
India may not completely duplicate China’s model, which has helped tech companies like Baidu and Tencent become giants by blocking competition from overseas. But foreign buyers have reason to be wary.
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