Friday, 25 September 2020

Reliance could be TikTok’s much needed lifeline in India

by Harry Baldock, Total Telecom
Thursday 13 August 20

Reports from anonymous sources are suggesting that Reliance may be in talks to back the video-sharing platform

As a result of the ongoing geopolitical clash between India and China, much of which revolves around tensions over their shared border, India made the move to ban 59 Chinese apps at the end of June. One of these apps was ByteDance’s TikTok, the video-sharing app that has taken the world by …

As a result of the ongoing geopolitical clash between India and China, much of which revolves around tensions over their shared border, India made the move to ban 59 Chinese apps at the end of June. One of these apps was ByteDance’s TikTok, the video-sharing app that has taken the world by  storm in recent years.
 
The Indian ban was a major blow for the Chinese company, with India representing its largest market, with over 200 miller users.
 
However, there may yet be hope for the apps future in the company, with reports suggesting that ByteDance is in early discussions with Indian giant Reliance seeking investment. TikTok’s Indian business is being evaluated at around $3 billion, according to anonymous sources close to the matter. Sources suggest that discussions began around the time that the Indian app bans began.
 
If such a deal were to be struck, concerns over TikTok users’ privacy and security – the basis for the broad Chinese app ban – would likely be assuaged.
 
ByteDance faces a similar dilemma in the US. The Trump administrations latest blow in the tech battle with China has been to ban TikTok and WeChat based on their perceived security risk, with the ban to come into effect in mid-September. Microsoft are looking to purchase the app’s American business, with some reports even suggesting that the US tech company is looking to buy extend the agreement to encompass other markets, including Europe and India.
 
That Reliance would be filling a parallel role in the Indian market is hardly surprising. Since Reliance Jio’s arrival on the telecoms scene four years ago, it has rapidly grown to prominence, with mobile subscribers swelling to around 400 million. Since the start of the year, Jio has sought external investment in a move that has seen billions of dollars infused into the business from the likes of Facebook and Google, both of whom are keen to get their hands on the rapidly digitalising Indian market. For Reliance, an investment in TikTok would allow them yet another diverse avenue with which to engage their customers.

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