30 days to seal the fate of TikTok – Will it be Jio, RPSG or Microsoft?

Videos grab viewers’ attention and that has been amply proven by a platform like TikTok. TikTok/Douyin the Chinese video-sharing social networking service launched by ByteDance in 2012 gained immense popularity. By 2019, TikTok was downloaded over 738 million times, making it one of the leading apps on Google Play and the App Store. The App is used to create short music, lip-sync, dance, comedy, and talent videos of 3 to 15 seconds, in 40 different languages. So, what exactly led to the downfall of this platform? Why does it need to sell to Jio, RPSG or Microsoft? What exactly has transpired this buyout? The countdown begins – 30 days to seal the fate of TikTok..

TikTok now pushed to a wall

As positive popularity grew, so did negative naysayers. TikTok was marred by accusations of devious algorithms, child predators, teen bullying, public distrust, and most importantly an allegation that it was sharing confidential user data with the Chinese government.

Recently with the world distrusting China on issues ranging from the corona virus outbreak to data security, the apps ownership has come under major threat.

Pushed to a wall, TikTok may decide to sell the app’s global operations as one entity for around USD 50 billion but whether that will happen or not is a question. For the platform to survive, it needs to either be sold to a non-Chinese entity or continues to live with the threat of being banned in other countries, just like it got banned from India.

The India story

TikTok has invested millions of dollars in the Indian market and is not ready to give up its biggest market so easily. The platform had attracted over 1.2 million content creators coming from big and small towns and even rural India.

When strains between India and China intensified following the Galwan Valley clashes, Prime Minister Narendra Modi decided to take a tough step against China. On June 29, 2020, the government of India banned the TikTok App in India along with 58 other Chinese apps citing threat to national security.

The move upset hundreds and thousands of Indian TikTok fans. TikTok was ready to counter the measure. It was prepared to provide clarifications to the Government of India, to allay any concerns over its privacy and data-sharing issues.

However, the ban was immediate.

For TikTok to resume its services in India it means the app will have to disassociate itself from any Chinese investment. There is talk of TikTok being acquired by an Indian company. The two industry stalwarts who have so far expressed interest in buying TikToks Indian arm are Mukesh Ambani and Sanjiv Goenka.

India was TikTok’s biggest market with more than 200 million active users and had been downloaded 600 million times. This popularity itself is a selling point for TikTok.

Though it is said, Mukesh Ambani’s Jio acquiring the Indian operations of TikTok might lead to a clash of interest with the recent partner Facebook who has just launched a Tik Tok-like feature on its Instagram app, it remains to be seen.

Conversely, Goenka’s acquisition of TikTok would blend easily into his media empire The RP-Sanjiv Goenka Group is an Indian conglomerate with USD 6 billion asset base and USD 4 billion revenue, with a significant global presence. They have recently acquired the Indian edition of Fortune and Editorji, an AI-powered news app founded by TV personality Vikram Chandra. TikTok would align with plans of long-term plans of the RPGS Group to target what it calls “India 2” as a mass market for Editorji.

The ongoing negotiations between TikTok, the Government of India, the Reliance Group, and the RPSG Group will hold key to the outcome.

In the meantime, whether video sharing apps like Roposo, Moj, Josh, and MX Takatak will continue to fill in TikTok shoes in India or will TikTok return with a bang is anyone’s guess.

The US Story

There is ambiguity about TikTok’s survival in the US. While there is rumour about President Donald Trump completely banning TikTok from operating in the United States by September 15, there is also concurrent talk about Microsoft buying a majority stake in the Chinese app from owners Byte Dance. America says this step is essential since the App poses a national security threat owing to its links to China.

Satya Nadella in a blog post said “Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury. Microsoft will move quickly to pursue discussions with TikTok’s parent company, ByteDance, in a matter of weeks, and in any event completing these discussions no later than September 15, 2020. During this process, Microsoft looks forward to continuing dialogue with the United States Government, including with the President,”

The blog further states “The two companies have provided notice of their intent to explore a preliminary proposal that would involve a purchase of the TikTok service in the United States, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets. Microsoft may be joined with American investors General Atlantic and Sequoia Capital to participate on a minority basis in this sale.

With the purchase of TikTok Microsoft wants to assure its American users that their private data would not be shared with any of the partner countries and would remain in the United States. It further stated that if erroneously any data got transferred outside the United States, Microsoft will guarantee the same data is deleted from servers outside the country.

Microsoft intends to bring complete transparency to users but you and I both know the app will only be as safe as Facebook or any other.

While tick-tock goes the clock, for the next 30 days TikTok’s fate continues to hang on a thin thread held by India and the US.