A Plot Twist in India-China Relations

On July 13th, 2020 the Indian government made a political move has changed the shape of India’s social media landscape.

Last Monday, the Indian government banned 59 apps developed by Chinese firms over concerns that they threatened national security – right after a border skirmish between Chinese and Indian soldiers in the Himalayas.

Among the 59 banned apps was Tiktok, the video sharing app that took the India, and the world, by storm. India was Tiktok’s largest user base outside of China, with 200 million users and 5.5 Billion hours spent on the app in 2019 (the equivalent of 627 thousand years). This included a strong community of young content creators, some with followings over 30 million, who are now out of a job and flocking to other platforms.

This is the first move like this that India has made to towards threatening China’s quest to become a digital superpower. It has created a barrier between the two largest internet markets in the world and opened the gates for India to create a few social media giants of its own.

While there are mixed reactions about the economic implications of India’s political move, this event provides a clear opportunity for India’s own regional social media companies like Sharechat, Chingari, and Roposo who have created a new genre of social media networks that are hyper-localized and set to take the world by storm.

How are young internet users in India different?

While the number of young internet users has increased dramatically in India – there is a stark difference between them and users in the United States. India has 22 different languages spoken in the country, and while Hindi and English are the national languages – their fluency greatly varies across the population. In fact, a 2017 study by KPMG and Google predicted that by 2021 there would be 536 million Indian-first language speakers in the country, with only 38% speaking Hindi and the rest speaking a variety of different dialects like Marathi, Bengali, and Tamil.

This has created a need for social media networks that are heavily dominated by image and video (like tiktok) or ones that cater to specific regions. What’s What has emerged over the last few years are hyper-localized social media networks that are able to do both.

One example that swept the country is Sharechat. Sharechat focuses on non-English languages and was launched in 2015, right as India’s internet usage was growing. In fact, the first page you see when you open the app are 14 tiles, each focused on a different language and sub-region. Within those tiles are millions of users who are creating content in their own languages and sharing it with others from around the region.

Sharechat has exploded over the last few years, climbing up to 60 Million monthlbase) and recently solicited a $100M dollar investment from Twitter who has been looking to deepen their footprint in the region.

Over the past few days since Tiktok was banned – Sharechat has seen exponential growth, clocking half a million new users every hour. This includes popular Indian Tiktok creators who are moving to them and competitor Roposo, which specializes in short-form video.

This move by the Indian government, while political in nature, creates an open runway for India to create social media giants of its own without competition from China. With companies like Facebook, Google, Netflix, and Amazon increasing their investments in the region, and starting to shore up their market position by investing in quickly growing technology startups - the race to capture the next billion users is on.

Whats happening in the rest of the world?

India’s actions have created a ripple effect at other countries looking at blocking China’s advance into the digital world and boosting the growth of their own tech companies. Most notably, the United States is considering also banning Tiktok – but the more interesting ripple effects will be seen on places like Africa, South America, and other parts of South East Asia that are experiencing similar rates of mobile internet growth as India. Once we start exploring, we’re bound to start seeing similar trends of geopolitical conflict, foreign tech investment, and changing social norms across these regions.