Startups and tech companies are racing to fill the void due to the ban on Chinese apps and cashing in on the demand created by people looking for local alternatives of such apps.
1. Local video push
Flipkart is piloting influencer-led video commerce with 2GudSocial, aimed at consumers from small towns and lower-income groups. The platform will feature products from categories like fashion, mobiles, and accessories.
Sharechat has also forayed into short videos with Moj that focuses on on content around dance, comedy, food, sports, DIY and animals among others.
Zee5, the video streaming service from Essel Group, also unveiled its short video platform HiPi that is expected to launch shortly with content across categories like food, music, and humour among others.
Internet firms like ShareChat, Vokal, gaming company WinZo, and emerging ideas like short-video app Chingari and video conferencing app ChitoChat, are all looking to launch new business verticals.
What’s at stake?
Chinese internet companies dominated the Indian smartphone app usage until the ban earlier this week, outpacing its local counterparts, especially in tier-2 and tier-3 cities. These apps had an estimated 300 million unique users in India, which essentially meant that two-thirds of about 450 million smartphone users in India use at least one Chinese app.
Local companies further received a boost from Union Minister for Communications, Electronics & IT Ravi Shankar Prasad who said the ban on Chinese apps is a great opportunity to build and promote “Made in India” applications, in line with the government’s clarion call of Atmanirbhar Bharat.
Read our coverage:
– Flipkart, Sharechat, others look to fill Chinese app ban vacuum
– Chinese app ban opens the field for local tech ventures
– Ban on Chinese apps is in line with ‘self-reliant India’ mission: Ravi Shankar Prasad
2. What’s next for Chinese apps?
A government-constituted committee will conduct a detailed inquiry into the data-sharing practices of the banned 59 Chinese apps including TikTok, Helo, and WeChat.
Representatives from these apps can, however, appear before this panel and prove that the data of Indian users are not being sent to servers in China, top officials told ET. Executives from apps like TikTok, Bigo Live, and Likee said they had begun the process of cooperating with the government for investigations.
TikTok CEO Kevin Mayer also said that the company’s creator managers are actively engaging in reassuring their top creators, apart from providing updates on their efforts and the path forward
Meanwhile, China also expressing serious concern over the ban, arguing that it goes against the general trend of international trade and e-commerce. Read more.
3. Digital payments recovery
Transaction volume on retail payment channels is almost back to Pre-Covid-19 levels in June, as per the latest data released by NPCI.
What’s the growth like?
- UPI saw a record 1.34 billion transactions worth Rs 2.61 lakh crore processed in June, surpassing the record 1.32 billion transactions worth Rs 2.22 lakh crore recorded in February.
- National Electronic Toll Collection (NETC) that powers Fastag payments at highways also saw a sharp recovery to clock 82 million transactions worth Rs 1,511 crore in June, up nearly eight times from under 10 million transactions worth Rs 247 crore in April.
- BBPS too saw a record 17.64 million transactions worth Rs 3,000 crore processed on its platform in June, up from 14.92 million transactions worth Rs 1,957 processed in February.
- IMPS saw volumes surge to 199 million transactions worth Rs 1.06 lakh crore in June, up 20% from May. Read more
4. BookMyShow‘s online platform pivot
With the live events industry shuddering to a halt and uncertainty still looming over when movie theatres will be allowed to reopen, BookMyShow has developed an online video streaming platform for live entertainment.
What’s the plan?
The platform will offer paid and free performances across various genres like music, comedy, and other performing arts to its users in India, USA, North America, UK, Germany, UAE, Southeast Asia, and West Indies.
Initial traction: BookMyShow says the platform has hosted over 30 events at scale so far and is now set to host the first-ever virtual edition of the prominent electronic dance music festival Sunburn Home Festival later this month. Read more.
5. Chinese VC exits
Chinese investors with small holdings in early- to mid-stage Indian tech companies have started talks with portfolio founders to explore a quick exit. These investors currently own about 4-5% in Indian companies, with some holding less than 2%.
Why are they exiting?
These investors say their presence in the capitalisation table of Indian companies will only hurt business optics including future rounds, and not result in any significant long-term benefit during exit even years later.
Investors have also become skittish about their future investments in India, following the introduction of new FDI rules for Chinese capital. This has led to Indian startups seeking advice on whether they should even pursue Chinese investors going forward. Read more.
(Illustrations by Rahul Awasthi)
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