“We certainly can build our own Tik Tok and other apps in India. But the challenge here is slightly more difficult. You have to understand the business models of these applications. Like Facebook and Google, TikTok’s main revenue comes from advertisements. And last year globally, ByteDance which owns TikTok, had $17 billion revenue with $3 billion in profit, essentially in China and the US,” said Nilekani.
The problem is that India is yet to be a big digital advertising market like China and the US. “India is not a very big advertisement market. Total ad spending in India across TV, print and digital is around $10-12 billion and in the digital space it is about $2-3 billion dollars,” said Nilekani. “So, most of these products essentially in India don’t make money. But they are here for strategic reasons because they want to build a large userbase.”
Essentially what Nilekani means is that for now apps like TikTok are in India because they want a slice of a country’s large userbase, something that they will be able to monetise in future. As far as their present India operations are concerned, they are sort of subsidised by their revenue from other markets, most notably the US and China.
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“We certainly can build our own Tik Tok and other apps in India. But the challenge here is slightly more difficult. You have to understand the business models of these applications. Like Facebook and Google, TikTok’s main revenue comes from advertisements. And last year globally, ByteDance which owns TikTok, had $17 billion revenue with $3 billion in profit, essentially in China and the US,” said Nilekani.
The problem is that India is yet to be a big digital advertising market like China and the US. “India is not a very big advertisement market. Total ad spending in India across TV, print and digital is around $10-12 billion and in the digital space it is about $2-3 billion dollars,” said Nilekani. “So, most of these products essentially in India don’t make money. But they are here for strategic reasons because they want to build a large userbase.”
Essentially what Nilekani means is that for now apps like TikTok are in India because they want a slice of a country’s large userbase, something that they will be able to monetise in future. As far as their present India operations are concerned, they are sort of subsidised by their revenue from other markets, most notably the US and China.
https://www.indiatoday.in/technology/news/story/india-can-make-tiktok-like-apps-building-business-model-more-difficult-nandan-nilekani-1697072-2020-07-04
India bans 59 Chinese apps including TikTok, Helo, WeChat
https://economictimes.indiatimes.com/tech/software/india-bans-59-chinese-apps-including-tiktok-helo-wechat/articleshow/76694814.cms