Ever since TikTok was banned in India, its future in the country has been in a state of limbo. With reports of multiple buyers lined up to buy its India operations, uncertainty remains over what will happen to the data of its erstwhile 200 million users, and whether a change in ownership will alleviate concerns over its Chinese origin.
TikTok, owned by the Chinese firm ByteDance, has thousands of employees in India and is said to be in talks with multiple buyers such as Microsoft, Walmart and also Reliance. Any new buyer is likely to face multiple challenges if it acquires TikTok India.
The data of over 200 million Indian users still lies with ByteDance, as per some experts, and it will need to be seen whether ByteDance will part with that. The new buyer will also face a lower valuation in India as the brand has suffered a beating ever since its ban by the Indian government. Even if it is revived, it may still be considered of Chinese origin.
“TikTok app has emerged as an important destination for global digital consumers. TikTok’s appeal cuts across a wide swathe of demographic profile and across spectrum of low income to rich economies. For the sheer volume of behavioural data aligned to specific content categories that TikTok is in possession of, it adds a treasure trove of dimensions for completing existing datasets. Two suitors have emerged for TikTok's acquisition, namely Microsoft and Walmart, and that brings good depth for the discovery of true acquisition price. In this context, TikTok might not entertain local level interests, as it is speculated, to have emerged in markets for India. For the simple reason that if Indian assets get sold separately, that might lead to a fall in the value of the global acquisition,” observed Alok Shende of Ascentius Consulting.
Interestingly, TikTok has made deep inroads into the Indian market especially the rural markets as they realised how to capture the huge user base there. It was also the second-largest market for the app after China.
“TikTok has very intelligently captured the India rural subscribers. Even if a new buyer acquires it, how will the stigma attached to it being a Chinese application go? It may lose valuation in India. The biggest challenge is to get and acquire a huge amount of data of more than 20 crore Indian users that ByteDance owns. It is still with the Chinese company. Whether it will part with that data easily or will it form part of the deal needs to be seen” points out B.S Murthy, CEO of LeadershipCapital Consulting.
There are media reports that ByteDance is actively scouting for buyers to sell its international operations, including India, given the huge user base and traction that TikTok had in the country. Reports say that it is talking to Microsoft and also Reliance in this regard. A possible deal with Reliance could help the company in removing the stigma attached to the Chinese origin app in India,l especially given the Indian government’s concerns.
For TikTok’s employees in India, their future remains in limbo due to its sudden ban in India. Only a new buyer can bring clarity.
Brand expert Harish Bijoor says that the stigma attached with TikTok being a Chinese app will gradually fade away as the new owner takes over.
“Under a new owner that will not be an issue. Tiktok is a big brand in India that has made inroads into markets in both urban and rural areas. In the hands of a new owner, it still has the potential to get back right on top and give every other app a run for its money. If all this is closed within the next 60 days, it’s going to be business as usual for Tiktok,” Bijoor told THE WEEK.
