As TikTok faces an impending deadline to divest from its Chinese parent company, ByteDance, its future can be compared to India’s 2020 ban on the app.
Sanchit Vir Gogia, chief analyst & CEO of Greyhound Research, explained that banning TikTok centres on data ownership and privacy, driven by concerns over user data flowing to China. “If you look at the case in the US, Project Liberty, the consortium that wants to own the US assets of TikTok, will not get access to the algorithm, which continues to reside in China. So, despite the change in ownership, it will only be a half-win without proprietary access to the algorithm.”
“When it comes to comparing the Indian platforms not doing as well, the fact is both Google and Meta have an existing install base via ecosystem applications, and that is where they have an edge,” Gogia added.
He explained this trend with the example of WhatsApp, which has gained global trust for its simplicity, security, and extensive reach. The preference for platforms that unify communication, news, and entertainment explains why Facebook and Instagram continue to dominate.
Regardless, it could be said that the creator economy will only grow. “The Indian creator ecosystem has grown multifold in the last few years, primarily due to the efforts of global and Indian platforms and the money being spent to build it. There will be winners and losers in this battle. Ultimately, content creation as a category of professionals is now becoming a serious alternative that many are turning to,” Gogia added.
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Additional comments by Greyhound Research analyst:
Banning TikTok is ultimately a fight for data ownership, privacy, and intellectual property. Whether in the US or India, the premise of banning TikTok was data privacy concerns since user data was heading to China.
Project Liberty, the consortium that wants to own the US assets of TikTok, will not get access to the algorithm, which continues to reside in China. So, despite the change in ownership, it will only be a half-win without proprietary access to the algorithm.
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The debate about the decision of TikTok to be banned and whether it is a decision based on nationalism or concrete evidence does not require much digging. The fact is that the algorithm sits in China, and for it to work, it does need a lot of data to work effectively. Protecting consumer data and ensuring that competing countries or those who do not have a well-defined legislative structure around data privacy is critical for any government to have on its charter.
Whether in India, the US, or any other country, the government plays a critical role in safeguarding its citizens’ data. Of course, politics plays a key role, as it does for everything else in all other industries. Business and politics can never be done in isolation, and that reality needs to be widely understood and appreciated.
However, it must be noted that the Trump administration will most likely have a different point of view on the ban on TikTok in the United States. Even Donald Trump’s closest advisors, including Elon Musk, think TikTok should continue operating in the US. Of course, the ownership of assets is a topic that may come up, and they will definitely exchange hands. However, a complete ban may well be out of question.
It is critical to note that there is definitely a clear intent on behalf of Trump administration to improve geopolitical relationships with China and the ban of TikTok will play a key role since it’s the first big decision of the second innings of Donald Trump as the President.
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When it comes to talking about and comparing the Indian platforms not doing as well, the fact is both Google and Meta have an existing install base via ecosystem applications, and that is where they have an edge. Another reason why both Google and Meta have done better is because they have a global user base, allowing them to learn from multiple environments and implement new features across the board. That does increase the pace of innovation.
A classic example is WhatsApp, which is seen as a viable and credible messaging platform compared to anyone else simply because it has attracted a global user base. Fundamentally, here, consumers and their mindsets are to be understood. Consumers prefer to use a single platform to access domestic and international news information, entertainment, and everything else rather than go to a country-specific application. This is also reflected in how today’s news is read more on platforms like Facebook and Instagram publishers, website websites, and application applications.
Well, the Indian creator ecosystem has grown multifold in the last few years, primarily due to the efforts of global and Indian platforms and the money being spent to build it. Of course, there will be winners and losers in this battle. Still, ultimately, content creation as a category of professionals is now becoming a serious alternative that many are turning to.
The American content creators have an age, given the relative earlier exposure to content creation and the ecosystem of platforms and devices being more mature. However, the Indian ecosystem is developing blazingly fast and will soon surpass the US in size and volume. A great way to judge this is the proliferation of content creators in small towns who are buying devices, software and more to enable the publishing of content. A great example of this is a gentleman called Rajesh Rawani, a truck driver turned YouTuber with 1 million subscribers and earns up to 10,00,000 ₹ a month from Food vlogging. Now, who would have thought of that a few years ago!
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