As TikTok competitors swoop in amid global pushback, is the short video app losing its ‘first mover advantage’?

In the week after India banned TikTok, negative sentiment against the app on social media rose to 80 per cent on average from 55 per cent a week before
Meanwhile, Indian alternatives are gaining traction and Western apps are also launching short video features

Apps

Tracy Quin Shanghai

Published: 6:00am, 9 Jul 2020

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In the week or so after India banned 59 Chinese apps, several home-grown video-sharing platforms that had previously been dwarfed by wildly popular short video app TikTok have seen their user numbers jump.

Roposo, a TikTok-like app that has been around since 2014, drew in 22 million new users in two days after India banned Chinese apps including TikTok, the company’s founder Mayank Bhangadia told Reuters. The app now ranks first in the entertainment category of the Apple App Store in India, according to data provider Sensor Tower.

Chingari, another TikTok alternative launched in 2018, has seen two to three million downloads per day after the ban, according to English-language Indian newspaper Financial Express.

TikTok, owned by Beijing-based ByteDance, popularised the short video format and is widely seen as China’s first app to achieve widespread international success. India is its biggest international market, with at least 120 million monthly active users reported before the ban.

But a deadly border clash between China and India, resulting in the deaths of 20 Indian troops, in mid-June has led to a backlash against China technology. And TikTok – which has already been facing criticism worldwide, particularly in the US, over issues relating to data privacy and security – is bearing the brunt of the fire.

Deadly border clash prompts renewed calls in India to boycott Chinese tech

In a week after the India government ban, the average negative sentiment against the Chinese-owned app on social media rose to 80 per cent from 55 per cent a week before, according to data provided by global media intelligence company Meltwater, which has offices in Hong Kong.

It is not just domestic rivals that stand to benefit from the international pushback against TikTok.

Facebook-owned Instagram, for instance, said on Wednesday that it is testing its TikTok-like new feature Reels in India.

“People across the big and small cities of India come to Instagram to express themselves safely, and also to be entertained,” said Facebook India vice-president and managing director Ajit Mohan in a statement.

Google-owned video giant YouTube is also reportedly planning to launch a short form video-sharing feature, Shorts, inside its mobile app by the end of 2020, according to The Information, which cited people familiar with the matter.

“Looking at the current situation the ban is not expected to go any time soon,” Sanjeev Kumar, an analyst at the New Delhi office of US-based research firm Forrester, adding that “it is still to be seen if TikTok can provide a convincing answer to questions around data privacy”.

In Australia, concerns mount that China could use TikTok to spy on users

TikTok is losing its “first mover advantage” and while it is possible that the Indian government will eventually lift the ban, the precious months in between could be a “bonus for all these Western players and Indian apps”, he said.

Western apps owned by tech behemoths like Facebook and Google are “more than equipped” to latch onto the disruption, while local apps are mostly seeing a strong surge in users because of the ban against TikTok and the relative shortage of short form options from established Western players, but can “certainly catch up” in time, he added.

Given the importance of the India market to TikTok, the app ban is set to deal a major blow: to the tune of US$6 billion in losses for its parent company ByteDance, according to a report last week by Chinese media outlet Caixin, which cited anonymous sources.

And it is not just in India that the app is facing challenges. The Australian defence department, for example, has left TikTok out of its list of approved apps for devices used by its military personnel, taking a similar stance to the US Army and US Navy.

TikTok has repeatedly defended itself over concerns about data privacy and security, saying that the app stores user data outside China.

TikTok’s chief says he would turn down a personal request from Xi Jinping

When asked about concerns in Australia, TikTok said it “does not share information of our users in Australia with any foreign government, including the Chinese Government, and would not do so if asked”.

Earlier this week, Secretary of State Mike Pompeo also said the United States was looking at banning Chinese social media apps, including TikTok.

“TikTok is led by an American CEO, with hundreds of employees and key leaders across safety, security, product, and public policy here in the US,” said a TikTok spokeswoman in an emailed statement to the Post on Wednesday, when asked about Pompeo’s comments.

The company has “no higher priority than promoting a safe and secure app experience for its users” and has “never provided user data to the Chinese government, nor would we do so if asked”, she added, without replying to queries about the company’s future plans for international expansion.

In light of the new national security law in Hong Kong, TikTok this week also went a step further than other social media giants – which have said they would suspend user information requests from Hong Kong authorities – and announced that it would exit the Hong Kong market entirely within days.

But it continues to face regulatory scrutiny worldwide, especially in the US. On Tuesday, days after Pompeo’s comments, US Vice President Mike Pence said in an interview that the US would “continue to take a strong stand” regarding Chinese entities that pose national security threats.

US authorities are also reportedly looking into allegations that the popular app failed to live up to a 2019 agreement aimed at protecting children’s privacy, according to a Reuters report on Wednesday which cited anonymous sources.

US could sanction Chinese social media apps over data concerns, Pompeo says

To be sure, the criticism of TikTok since last year – when the US launched a national security probe against the app – does not seem to have hurt its popularity too much.

According to Sensor Tower, TikTok and its Chinese version Douyin have been downloaded more than 2 billion times globally by the end of April. In June, TikTok and its Chinese version Douyin earned more than US$90.7 million in user spending, 8.3 times its revenue in June 2019, Sensor Tower data showed, although most of that revenue comes from the China version.

But Alex Capri, a Singapore-based research fellow at the Hinrich Foundation, said that TikTok will find it hard to avoid being pulled into geopolitical tensions despite all of its efforts to distance itself from China.

“The Chinese market is closed to foreign competition. So there is this backlash,” he said, adding that when it comes to commercial tech companies being dragged into politics, “it is a reality today, it is only going to increase”.

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