In the wake of relentless public pressure over privacy issues, TikTok’s parent company Bytedance has finally agreed to build a local data center in India. Bytedance, which is the world’s most valuable startup, will invest nearly $100 Mn and take anywhere between 6-18 months to achieve this goal.
“Since the launch of our platforms in India, we have stored the data of our Indian users at industry-leading third party data centres in the US and Singapore… We are now in the process of examining options for safe, secure and reliable services for our Indian users within India’s borders,” Bytedance said in a statement.
Last week several prominent Indian parliamentarians accused short video app TikTok of illegally sharing data of Indian consumers with the Chinese government and thereby creating concerns for India’s national security. RSS, the powerful parent organization of India’s ruling party BJP, also leveled allegations of spying to exert more pressure on the Chinese video app.
The recent allegations of privacy violations and spying is the latest crisis plaguing TikTok’s Indian operation. Earlier this year, the popular video app was temporarily banned for allegedly promoting erotic contents among Indian teenagers and youth population.
However, with nearly 120 Mn monthly active users, India has emerged as highly lucrative market for the TikTok video app. Hence the Chinese tech giant is in no mood to exit the Indian markets despite the series of problems it has been subjected to over the last few months.
China remains active investor despite Frosty Indo-China Relations
India and China fought a bitter war way back in 1962 and since then these two Asian giants have turned into hostile foes. Unresolved border issues have further casted shadow over the bilateral relationship between these two mighty countries.
But over the year China has had such strong investment appetite for India that it hasn’t allowed to burdened itself by complicated history or fall prey to endless border skirmishes. India’s irresistible thirst for foreign investment to propel its economy also helped in opening up to the Chinese investment.
As a result, today Chinese companies have emerged as one of the frontline investors in India’s dynamic startup ecosystem. Be it Alibaba’s investment in high profile Indian startups like Paytm, BigBasket & Zomato or spree of investment led by other Chinese companies like Alipay, Fosun and Xiamoi.
It is not only on the front of investment, Chinese products are also ruthlessly dominating India’s consumer tech markets. Vivo and Oppo’s meteoric rise over the years has almost pushed the local Indian smartphone players to the edge of extinction. Now Chinese apps like TikTok are carrying forward this domination in the Indian app market where until now Chinese apps have tasted relatively moderate success.