India Bans TikTok: Who Will Fill The 400 Million Gap?
Short-form Video Will Need A Quick Replacement
On June 29 the Government of India banned a large set of Chinese application programs that could be used on smartphones in India. The outcome of the ban is that people in India, connected to the Internet through Indian cell phone providers or Indian Internet Service providers, are unable to find the apps in the app stores online and will soon be unable to use the apps on their phones because the apps need to be able to connect to the Internet and that will be prohibited.
This somewhat predictable move comes on the wake of the existing narrative in India that COVID-19 emerged from China and the more recent death of several Indian soldiers in the border clashes in Ladakh. There is a growing anti-China sentiment in India as was even demonstrated in the content shared on one of the banned apps. Ironically, TikTok, which is now banned, had nearly 8 million views of items with the hashtag #boycottchineseproducts. People in India, especially a segment of the 400 million users of the short-form video format of TikTok, were actually using TikTok to promote the resistance to Chinese products and services.
The results of this ban will have certain financial effects on ByteDance the parent company that deployed TikTok and other platforms such as Helo in the Indian market. These platforms became particularly popular in the non-metropolitan areas and became attractive to a population that was not as Westernized as those in the Tier-1 cities of India such Delhi, Kolkata, and Mumbai. This population found the platforms easy to use that offered them a voice that they never had before. The videos became a form of expression that did not exist before and empowered the people. As shown on a NDTV interview on June 30 people became TikTok stars because of their down-to-earth posts and the large following they attracted. All those users are now gone, and TikTok is facing severe losses by losing nearly a fifth of its entire global base of users.
Additionally, in one fell sweep the voices on TikTok and subsidiary social media systems have been silenced. This has created a vacuum where millions in India are suddenly without one of the most popular form of social media that they accessed. As the statistics show, this form of expression was more popular than the more Western systems such as YouTube, Instagram, and Snapchat. To be sure, this gap will have to be filled by others who are certain to arrive with their products.
Perhaps the one that is best suited is Lasso — the short-form video format offered by Facebook. This has been downloaded about a million times in the USA but has not been launched in India yet. However, Facebook is in a truly advantageous position to fill the gap. Earlier this year, Facebook entered into a partnership with Jio in India buying about a 9% share. Jio offers a gold mine to Facebook since Jio has the largest market share of the cellular and mobile data services in India. They are deeply penetrated across the lower Tier urban areas and the rural areas offering affordable Internet connectivity. This collaboration will open up a vast market to Facebook and its Lasso, especially since WhatsApp (owned by Facebook) is already extremely popular in India.
The ban thus has a two-pronged outcome. First, it acts as an expression of national pride and defiance showing the World that India can retaliate in vital ways. Second, it creates a gap in popular culture that can now be filled by those who are friendly towards India, its businesses, and leaders. The consumer would hardly care as long as they can produce videos and share them, and gain fame in the World of amateur video, but this is a signal and a test for India to see how the World responds to India as it takes on China.