The Government of India has banned 59 Chinese Apps. One of them is TikTok which had become a national pastime. It had around 1.2 crore content creators and 12 crore monthly users.Indian users on an average spent 34 minutes everyday on it. Almost one third of smartphones in India had the app.It ruled the short video space. A perfect addiction.
With the ban, the race has started to replace TikTok. What’s important is that it is a ‘winner-take-all-market’ (Two Sided Network effect – have written about it in the past – one can read it here –writeup). Many new apps like Trell, Roposo, Mitron, Chingari, Bolo Indya etc are in the race.
Content creators go on the app which has maximum users and users go to the app which has maximum and interesting content (i.e. maximum content creators) creating a flywheel effect.It is difficult to remove a dominant player. In such markets, gaining users is considered more important than immediate profitability.
The space has low barriers to entry but is difficult to sustain. Requires a very large resource pool of money and tech capability.While it may not be that difficult to build a TikTok look alike app,it is difficult to develop similar expertise in machine learning – create psychological triggers etc, build an addictive product.
Bytedance (parent of TikTok) had deep pockets to keep investing in India (Last year had revenue of around 17 bn $ made 3 bn $ of profit).It makes a lot of money in its home market i.e. China. It had plans to invest around 1$ billion in India. Any alternative to TikTok would require very deep pockets, tech capabilities and a lot of patience when it comes to profitability.
There is a possibility of the ban being revoked. In that case the competitors have a window to gain critical mass. It’s an uphill battle but would surely be worth it.
Given the nature of the market – ‘Winner takes all’ it’s a land grab. It will be interesting to see how this plays out.
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