China is at the receiving end of something it’s more used to handing out: a ban on popular software. The latest Indian salvo may not wreak much immediate financial havoc, but deals a blow to the overseas ambitions of Chinese internet companies.
India banned 49 Chinese mobile apps on Monday, including TikTok and WeChat, after a border clash that killed 20 Indian soldiers this month. These apps together have been downloaded a total of 4.9 billion times in India since 2014, according to data firm Sensor Tower.
There are no details on whether existing users will be able to access those apps in the future. There is also a legal question as to whether the ban is constitutional: an Indian court blocked TikTok from app stores last year for pornographic content and cyberbullying but later reversed the decision. This time, the government cited national-security concerns to justify the ban.
Bytedance, the company behind the short-video app TikTok, is the clear loser. India only accounts for about 0.2% of TikTok’s in-app revenue, according to Sensor Tower. But the country represents its biggest user base outside of China—the app has been installed 660 million times in India, nearly a third of the global total. TikTok, and its Chinese version Douyin, still make most of their revenue in China but India was the most promising opportunity for growth. That is especially true since the app is under intensifying scrutiny in the U.S., its second-largest market outside of China. Bytedance’s Helo, a social-media app with most of its users in India, is also banned.
After growing up at home mostly shielded from foreign competition, Chinese internet companies have been trying to venture abroad in recent years. India and Southeast Asia, due to their geographical and cultural proximity, are the clear target markets.
Replacing Chinese cellphones may be tough but apps are another matter. As anti-Chinese sentiment rises among the country’s neighbors, Chinese internet companies will find it even harder to expand abroad—something their foreign rivals, who have tried for years to penetrate the heavily protected Chinese market, are all too familiar with.
Write to Jacky Wong at [email protected]