Home Business ByteDance In Talks With India's Reliance Industries For Investment In TikTok

ByteDance In Talks With India’s Reliance Industries For Investment In TikTok

ByteDance approached India's biggest oil-to-retail conglomerate RIL for discussing investment. The deal can not only save TikTok's fate in the Indian market but can also help RIL to build deeper and better connections with its target audience.

As a fallout of geo-political tensions with China, India decided to ban 59 Chinese apps over security and privacy concerns. The ban exhibits a significant complication for companies like ByteDance, who are trying to benefit from India’s internet boom. ByteDance owned TikTok, was rocking its way to success which unfortunately took a prominent hit with India’s ban. Now, countries around the world are targeting TikTok to set an example for the Chinese government. 

Currently, numerous technology companies are leveraging TikTok’s weak position to acquire its business. Microsoft and Twitter have shown interest in TikTok’s US operations, while in India, Reliance Industries Limited is eyeing the social media company.

TikTok is engaging in discussions with Reliance Industries to survive this existential crisis. TikTok’s CEO, Kevin Mayer reportedly approached senior RIL executives to assess if the oil-to-telecom conglomerate is interested in picking up a stake in the app’s Indian operations. 

The two companies began conversations late last month but have not reached any deal yet. Currently, TikTok’s business in India is being valued at more than $3 billion. RIL is likely to wait and let TikTok’s valuation drop further rather than rescuing TikTok at this particular stage. 

TikTok has garnered more than 200 million users in India and identifies the country as its biggest overseas market. Since its launch in 2017, the social media app generated about 2 billion installs globally, out of which 660 million installs were from India.

However, in the second half of the year, the company will miss out on another 100 to 150 million first-time installs in India because of the ban.

RIL’s Jio Platforms has also amassed around 400 million users and has a multitude of big investors, including Facebook and Google on board. The combined power of TikTok and RIL can do wonders for Mukesh Ambani’s plan to revive RIL into a technology-driven company. The combination will grant RIL with deeper and better connections with its target audience. 

When asked about the speculated acquisition, RIL declined to comment. “Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under Sebi rules and our agreements with the stock exchanges,” the RIL spokesperson told the publication.

The RIL-TikTok deal could also speak to the fears of the Indian government, relating to which the ban was implemented. Serious objections were raised over the app’s alleged links with the Communist government in China, though the company has fiercely denied it.

Nikhil Gandhi, who oversees TikTok’s operations in India said that the firm was in the process of complying with India’s order and was looking forward to engaging with lawmakers in the nation to assuage their concerns.

However, even before the ban was executed, download of the app had seen a slide amid the border tensions. Boycott calls grew since March when the Covid-19 virus outbreak reached India, which originated in China. The perception of Chinese apps propagating explicit, hateful, and anti-India content has grown over the past year despite attempts by ByteDance to change the narrative.

Nevertheless, after the ban, TikTok is still striving to retain some key employees, including a policy head and Rohan Mishra, who oversaw the ByteDance-owned Helo app’s operations in India. TikTok employs 2,000 people in the country whose fate depends on the company’s ability to either persuade the government to allow them to operate or sell off the operations. 

TikTok struggles to keep business in other countries as well. Recently, President Donald Trump declared that the app poses a threat to national security, foreign policy, and the American economy. On August 6, he issued an Executive Order, according to which the company has to either sell its US operations or withdraw from the market within 45 days.

TikTok’s US operations are worth $5 billion. Microsoft, the software giant on August 2, 2020, confirmed that it had held discussions with Chinese technology company ByteDance, to acquire its US-based operations. Microsoft is also reported to have expressed interest in TikTok’s global operation.

Also, Twitter Inc has approached ByteDance to express interest in acquiring US operations. However, Twitter and TikTok are suspected in preliminary conversations, and Microsoft is still seen as the front-runner in bidding for the app’s US operations.


Read Also: Reliance Jio collaborates with Google, plans to launch low-cost 5G smartphones

Shivani Mittalhttps://www.the-electronics.com/
Shivani Mittal pens down all the prominent business decisions and news. She is a passionate reader and on any other off day, she finds herself immersed in adventurous activities like Trekking and Rock climbing.

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