It is no secret that TikTok posed an existential threat to Facebook. So when the Indian government decided to ban 59 apps of Chinese origin earlier this week, Facebook would’ve breathed a sigh of relief. TikTok counts India as its biggest market with more than 120 million monthly active users and more than 650 million downloads in India — it is the only social platform that comes close to Facebook’s dominance in India.
This also comes the same week Facebook had to shut down its half baked TikTok competitor Lasso. But from a broader context, this Chinese app ban will benefit the Facebook alliance with Reliance Jio in which the social networking giant has a minority 9.99% stake.
The ban includes some big-ticket apps — Vigo Video which is another app by TikTok parent Bytedance, UC Web, and UC Browser which are big platforms by Alibaba and even WeChat which is China’s WhatsApp by Tencent. UC Browser, for instance, is the second most popular browser in India behind Google’s Chrome.
- TikTok’s growth had become exponential. It had become a huge threat to the social ambitions of Facebook considering it had been locked out of China. TikTok wasn’t just skyrocketing in India, but it was and is still getting a lot of traction in the US. Bytedance, its parent company, had also made some moves to make it more appealing to global markets and creators by hiring former Disney+ head Kevin Mayer. Had this Indian ban not come suddenly, Mayer, who hasn’t been at TikTok for even 60 days is right in the thick of it. He didn’t have time to make a pivot towards higher quality content and improving the perception of the service. The skirmish between the Indian and Chinese forces in the Galwan Valley couldn’t have come at a worse time. TikTok still doesn’t make a lot of money in India and it doesn’t have a huge workforce in India — so its ban in the country was an easy one for the government. Now, Facebook can swoop in and pick up the pieces. It has been reported that Facebook-owned Instagram is developing a TikTok rival called Reels which could take the reins. Instagram could also close more favorable deals with creators who were on the platform as they would be desperate.
- Beyond the blockade of TikTok, this represents a great opportunity for Facebook and Jio. For instance, UC Browser had around 17% market share of all web browsers in India behind Chrome. UC Browser was a healthy number 2 with the next best having a market share of around 3%. Considering Facebook is used as the gateway to the Internet much like a web browser and the fact Jio is the most popular network in India, this presents an opportunity to grab those users. UC Web has become a pretty decent creator cum advertising platform which will be now ripe to be taken over by Facebook and Jio homogeny. Jio isn’t just a network, it has a suite of services and applications including a news offering that could benefit from this blockade.
- While Zoom hasn’t been included in this ban because it is a US registered company, the anti-China sentiment has become quite palpable since the border skirmish. The ban of 59 Chinese apps will also have a domino effect on Zoom Already, there have been calls to ban it and many users have moved to services like Google Meet, Microsoft Teams, WebEx from Cisco amongst others. Facebook and Jio combined are sitting pretty to take advantage of this. WhatsApp has already increased the number of users you can have in group chats, while the Facebook messenger is also getting a revamped video call stack. Jio has come out with Jio Meet which is solely training its guns on Zoom. Importantly, it is free right now and doesn’t have the 40-minute free video call limitation that Zoom has. Considering the nationalistic outlook and concerns around data sovereignty of Zoom, Jio Meet could become very popular. Jio can also optimize the service better one a network level so that it works better on its infrastructure.
- While WeChat isn’t very popular in India — in China it serves the combined function of WhatsApp, Bookmyshow ( which is owned by Reliance), Paytm, and Facebook. WeChat is owned by Tencent which has deep pockets. Even though it wasn’t a threat, it could’ve become a nuisance if there was an attempt by its parent to compete with WhatsApp. Now that it is blocked — it opens the road for a Jio Mart/WhatsApp super app. We are in the early days of the Jio and Facebook alliance where Jio Mart is now bringing thousands of small scale retailers online by connecting to users over WhatsApp and also processing payments through its protocol. This is what many analysts have predicted and with WeChat out of the way, this will be a certainty.
- The main revenue generation tactic for Facebook is advertising — it monetizes the content on its platform via advertising to fuel its growth. For Reliance, it wants to become a tech company on the lines of an Amazon. It is already dominant in telecommunications and off-line retail but it needs to become an online behemoth. The more users the alliance locks in the better it is for them both. Facebook hasn’t managed to monetize WhatsApp and it hasn’t been able to respond to TikTok, so this ban gives it breathing space to do both. Reliance also wants Jio to be known for its tech services — that’s why it has a bunch of them including the latest one Meet, but it can do more now on Android especially if it wants to. Popular apps like Cam Scanner and Beauty Plus have also been evicted from India — both can step in to create a replacement towards which users will throng if marketed well.
As of now, there aren’t any guarantees if this ban will stand. There is a chance that this is a posturing tactic. In the case, the geopolitical situation between India and China calms down, all these bans may be revoked but for the longer, they are upheld – the better it is for the Jio and Facebook alliance. They are not the only ones who will benefit from this – Google has been developing a TikTok competitor via YouTube, that will also be at play. ByteDance owned music streaming app Resso will now be throttled which will be good for Jio owned Saavn and Apple Music, YouTube, and Amazon Prime music. But while there will be many winners from the ban on these Chinese apps, the real winners will be Facebook and Jio.