BREAKINGVIEWS-India is the ignored elephant in the TikTok room

ARCHIVE PHOTO: The TikTok logo designed on the Indian flag and a sign that says “Prohibited apps” in English in this illustrative image taken on July 2, 2020. REUTERS / Dado Ruvic

By Una Galani

MUMBAI, Aug. 10 (Reuters Breakingviews) – The TikTok ransom price appears to vary depending on where it is spoken. Microsoft is in talks to buy the assets of the Chinese short video app in the United States, Canada, Australia and New Zealand, while the social network Twitter is only interested in the division of the United States, Reuters reported on Sunday. India, the largest market for TikTok by users, is the forgotten elephant in the room.

Microsoft, valued at $ 1.6 trillion, has boasted of its commitment to this emerging market. Satya Nadella, a Hyderabad-born company CEO, attended the annual shareholder meeting for Reliance Industries, a Mumbai-based company with a market capitalization of $ 188 billion last year. The two companies announced a 10-year alliance that will allow Reliance’s new data centers to work with Microsoft’s Azure cloud, among other things. For Twitter, as well as for other foreign technology companies, India is one of the largest markets in number of users. The country recorded 611 million TikTok downloads, or 30% of the total, according to SensorTower.

Practical questions can be a matter of caution. Any buyer will have to convince skeptics in Washington that their deal will cut all ties with the People’s Republic of China and also serve New Delhi, which banned the application in June. In addition, Indian users are less valuable to advertisers than those in richer markets, and the need for a long list of local languages ​​presents operating costs and problems. There’s also the price: the entire TikTok can be worth more than $ 24 billion, according to Breakingviews estimates. These types of numbers can seriously damage Twitter’s balance sheet.

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But there are also political reasons for being reticent. Prime Minister Narendra Modi’s government is defending a confused concept of a “self-sufficient” India, much like that of its Chinese counterpart Xi Jinping. This strategy may imply future political support for applications such as Chingari, Mitron and Roposo, all indigenous alternatives similar to TikTok; ShareChat, which was funded by Twitter and has a video sharing application called Moj; or Reliance’s JioMeet videoconferencing application, which is very similar to Zoom and freely accessible.

India cannot fully duplicate China’s workforce, a move that has helped tech companies like Baidu and Tencent to become giants by blocking foreign competition. But foreign buyers have reason to be careful.

On Twitter https://twitter.com/ugalani

The author is a columnist for Reuters Breakingviews. The opinions expressed in this column are the sole responsibility of the author.

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(Edited by Pete Sweeney and Sharon Lam; translated by Tomás Cobos)

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