The Indian government this week said it will ban TikTok and other well-known Chinese apps, including messaging platform WeChat and mobile browser UC Browser, saying they pose a “threat to sovereignty and integrity.”
The move follows a border clash between the two countries earlier this month that left at least 20 Indian soldiers dead.
TikTok has a lot to lose in the world’s second most populous country. India has been the biggest driver of new TikTok downloads, generating close to 660 million installs since its launch in 2017, according to analytics firm Sensor Tower.
Parent company ByteDance could “miss out on another 100 to 150 million first-time installs of TikTok in India” in the second half of this year because of the ban, said Randy Nelson, an analyst with Sensor Tower.
The ban also presents a major complication for ByteDance and other companies that are trying to take advantage of India’s internet boom, according to Akhil Bery, an analyst with the Eurasia Group.
“With only about 50% of Indian consumers online, India’s market represents a massive amount of growth potential,” Bery said in a research note on Monday. “Now, that has seemingly been cut off, and it is unlikely that the Indian government will walk back these restrictions.”
The ban means the potential loss of a lot of advertising revenue for ByteDance.
“It’s a tough slap in the face for ByteDance as they were growing 50% year-on-year in India,” said Greg Paull, an analyst with consulting firm R3.
ByteDance had forecast over $1 billion in advertising revenue from India this year, most of it generated by TikTok, according to estimates from R3. It reached $280 million in the last quarter of 2019 alone.
When it comes to in-app revenue — money users spend buying virtual items in TikTok — India also makes up about $1.5 million to date, or less than 1% of TikTok’s total, according to Nelson, of Sensor Tower. But growth there has been huge: Indian users spent about $520,000 in TikTok this quarter, up 277% compared to the same period a year earlier.
Spokespersons for TikTok and ByteDance did not respond to requests for comment for this story. A spokesperson said after the ban was announced that ByteDance “is committed to working with the [Indian] government to demonstrate our dedication to user security and our commitment to the country overall.”
“In the battle for world domination, the India ban won’t hurt them in terms of revenue as much as profile,” Paull said.
Many Indians have called for a boycott of Chinese goods and services, particularly from China’s dominant tech industry. Beijing said Tuesday that it was “strongly concerned” by the app ban.