What will be the impact of the ban on TikTok and other Chinese apps? An expert analysis

Amid Indo-China border tensions, the Indian government banned 59 Chinese apps in the country last evening. The key apps mentioned in the list include TikTok, Helo, UC Browser, UC News, WeChat, Bigo Live, CamScanner and Clean Master. Although Bigo Live's parent company is registered in Singapore, it is owned by YY Inc., a Chinese company.

The official press release stated, “The Ministry of Information Technology, invoking its power under Section 69A of the Information Technology Act read with the relevant provisions of the Information Technology (Procedure and Safeguards for Blocking of Access of Information by Public) Rules 2009 and in view of the emergent nature of threats, has decided to block 59 apps. (This is) in view of information available (that) they are engaged in activities prejudicial to sovereignty and integrity of India, defence of India, security of state, and public order."

This isn't the first case of Chinese apps being banned in a country. In 2018, Australia suggested its armed forces personnel not to use WeChat due to security concerns. Few days back, The Guardian reported how UC Browser, with 50 million users in India, is not running any Indo-China border dispute stories. There were media reports, many years back, that Xiaomi phones are sending data to China.

IT and Communications Minister Ravi Shankar Prasad tweeted that the apps have been banned keeping in mind the safety and security of the country, and to protect privacy of Indian citizens. Prime Minister Narendra Modi is going to address the nation today (June 30) at 4 p.m. It is being speculated that the address may include assertions on the Indo-China border conflict.

All the banned apps together add up to over 95 per cent of India's smartphone audience. Three apps, TikTok, CamScanner and Helo, reach 60-70 per cent of the Indian Internet population, as per Comscore India data (May 2020).

The next questions are, what will happen to the apps which have already been downloaded, and will these be removed from the Google Play Store and (Apple) App Store? The answer to the first question is yes, the apps will be banned at the ISP (Internet service provider) and TSP (telecom service provider) levels. They will not work, even if they have already been downloaded. People may use VPN to circumvent the ISP bans, but that would be deemed illegal, and can lead to a potential legal case against the individual.

The answer to the second question will also be yes, Play Store and App Store will have to comply with the laws and rules of the country. Since it's a government order, we will soon see all these apps being removed from respective India app stores of iOS (Apple) and Android (Google).

There will be other ways of downloading and installing the apps, say, with direct links, without the App Store. Still, it's not a very practical option, as installing apps in this manner can potentially open the mobile phone to privacy and hacking risks. Not everyone in India will be comfortable doing the same. Even businesses like TikTok, which is a 'legit' company across the world, would not recommend such practices.

In terms of media space, TikTok had set up a large sales force in India in the last 6-8 months, led by Nikhil Gandhi, who was (earlier) leading the revenue (team) at Times Now. The cost-per-day campaigns on TikTok has a rack rate of Rs 42 lakh and 30 lakh, respectively. The media sales had started to grow momentum, when COVID-19 hit the entire advertising market.

This ban will obviously hurt BAU (business as usual) for all 59 apps (banned) in India. These include some e-commerce apps like Club Factory, which are going to suffer inventory management, as business has to shut overnight.

For TikTok, a huge amount of effort was towards direct low-cost 'cost per action' (engagement, clicks, etc.) advertising, which allowed SMEs and individuals to run ads on the platform. TikTok was aggressively pushing that. And now, that too will be halted.

In terms of audience shifting, the TikTok users may move to new apps like Chingari, whose founders claimed 100,000 downloads on App Store within an hour of the TikTok ban. CamScanner users may move to apps like Adobe Scan, Microsoft Lens and Scanbot. ShareChat is obviously going to gain massively after the ban on Helo. UC Browser is the go-to app for many users for Internet browsing and suggested content. These users may move to Chrome, or even Dailyhunt, as a lot of the UC browser users are regional language users.

The impact on advertising revenue is going to be limited, as direct and indirect ad monies were not significant on most of these platforms. Still, all these budgets are going to move to other platforms like Google Search and Display, Facebook, YouTube, Instagram, Facebook, Dailyhunt, ShareChat, and large publishers like Times Internet.

All in all, it's a developing story, and it will be very interesting to see the impact of the ban on audiences, advertising, politics, and media.

(The author is the founder - Inaaj and Publishers Digital Lab, a technology company helping publishers globally.)