The Number Increases: Update on the list of banned Chinese apps.
Almost a month ago, the Indian Government issued a notice regarding a ban on 59 Chinese apps. The issue brought a lot of attention, both positive and negative, to the sheer number of Chinese apps or Chinese funded apps in the market. It is estimated that up to two-thirds of the Indian population has a Chinese app on their phone; almost 81% of the Indian market is made up of Chinese applications. Apps like Tik-Tok had large user bases in India, with nearly 30% of the users being Indian.
The ban came soon after border tensions rose between India and China. India threatened to ban Chinese apps due to alleged security and privacy issues. While it hasn’t yet been confirmed, there are notices of apps like SHEIN and WeChat collecting and sharing data outside of the country. This breach in security prompted the Indian Government to put out a list of 59 Chinese apps banned in India.
While some popular apps like TikTok and CamScanner were included in the list, one that made it out unscathed was PUBG. It was later revealed that PUBG was a South Korean app that was financially backed by Chinese giant Tencent. Chinese companies like Tencent are responsible for a lot of funding for Indian apps such as PayTM, Zomato, and OLA.
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What’s been happening since the first ban?
When the Chinese apps list was first revealed, everybody was shocked and then started to look for alternatives. The Indian alternatives to the banned apps seemed to take off, with users of short video sharing apps increasing almost overnight. They have quickly risen through the ranks as the Google Play Store, and the Apple App Store have removed the banned apps.
TikTok released several statements hoping for a revoking of the ban. They were open to opening offices in India (as previously planned) and adhering to any changes the Government might have in mind. The ban on TikTok had even provoked a response from the US head, asking for some leniency.
There is more that has been happening behind-the-scenes. A month after the first 59 apps were banned, another 47 Chinese apps were banned by the Indian Government. Like the first ban, the reason for the ban was cited as security reasons. The newly banned apps, which consisted mostly of clones of previously banned apps, were cited as a breach on the sovereignty of India. Soon after the news that more than 250 other Chinese apps were being investigated on similar grounds. On this new list were apps like PUBG, Resso, Zilla, and ULike.
Apps like PUBG were initially not banned due to their complicated heritage. While they are originally affiliated with a South Korean company, it is a bit more complicated now. To not confuse us more, it can be simplified to say that the offsprings of the original app seem to be Chinese. We also know for sure that Tencent still financially backs the game. It looks like even investment from a Chinese company is enough grounds for an investigation now.
The Chinese Reaction:
It is safe to say that China wasn’t happy with the ban. They have since publicly declared that they suspect India’s decision could go against the World Trade Organisation’s (WTO) laws. In a statement, they mention the action as being targeted and discriminatory. This statement has led to rumors about a possible complaint filed with the WTO.
The Implication, Predictions, and Future:
The decision to ban certain Chinese apps comes with certain consequences. It was a blessing for some Indian app producers. Apps like Mitron that served as an alternative to the banned apps saw a marked increase in users all over the country. A lot of these producers publicly declared their support for the ban and any future such actions. So who isn’t benefiting from the ban?
The Chinese App Producers:
The producers of the apps are the first to take a hit. India is a large market for Chinese products. This holds true for apps as well. Almost 30% of the user base for TikTok, was Indian. But how bad would the loss really be? When TikTok was initially banned in India due to the claim that it was promoting pornographic material, the company ByteDance reported a loss of up to $15 million a month. The ban was later revoked; however, this provides insight into the scale of losses companies will be facing.
Chinese Smartphone Companies:
There have been speculations that the ban could hurt smartphone companies like OnePlus, Realme, and Oppo. Chinese smartphone companies might be similarly affected in the long run due to the stigma surrounding Chinese products at the moment. Chinese smartphones make up a large part of the Indian market; every other person owns a Chinese smartphone because of their cost. The phones revolutionized the mid-low price segment of smartphones. OnePlus phones brought quality at an affordable cost, but might be affected in the long run. There is a certain hesitance that has formed towards buying Chinese products following the ban.
A lot of these smartphones come with pre-installed Chinese apps that have been banned. For example, the Xiaomi phones come with Mi video calling and the Mi app ecosystem, both of which have come under fire. While these apps will slowly be phased out and do not affect the functioning of the phone, there remains a certain apprehension before buying the phones now. Without their app ecosystems, these smartphones lose a significant advantage they had over other phones.
Effect on India?
While there’s a significant effect on Chinese apps and smartphones will the future bans have effects on India? There actually might be! A lot of the funding for our unicorns like PayTM, Zomato, and OLA came from Chinese conglomerates. It will be restricting the funding our own app producers receive overall.
There was also talk of ByteDance, the company that owns TikTok and more, investing upwards of $1 billion into India. This has since been suspended. This lack of investment comes with an effect on job creation and investment funds.
While there are one too many predictions for the future after the ban, nothing can definitive can be said. With the new list of upwards of 275 Chinese apps under investigation, it remains to be seen how many apps will be banned for the immediate future.