newsinsights

Reposo Booms in India After The Chinese Service TikTok is Banned | Emerging Markets Ecommerce - EMQQ

The ban on ByteDance-owned TikTok in India, as part of a sweeping move against 59 Chinese apps, saw ‘Made in India’ alternatives rise to the occasion. To say TikTok is a global sensation is an understatement, the short-video platform stopped working for its 200 million local users in India overnight.

Within hours, an avalanche of new sign-ups pushed the servers of one of its Bangalore-based rivals, Roposo, to breaking point. Two weeks later, Roposo, which also offers short videos, says it’s peaking at 500,000 new app users an hour and expects to have 100 million users by month’s end. That’s almost double the 55 million it had before the ban. In terms of growth in absolute downloads, Roposo, whose downloads increased from 5.5 Mn in the prior period, to 13.3 Mn in the three weeks since the ban, experienced a growth of 142%. Roposo is owned by InMobi a private company and a venture capital unicorn [1].

Dive Deeper:

Roposo, which was India’s first social network app, claimed 42 million users at the time it was acquired by Glance in November 2019, an arm of InMobi. For Naveen Tewari, CEO of InMobi the synergies were obvious. Glance, which had raised $45 million from Peter Thiel’s Mithril Capital shortly before the Roposo deal, delivers personalized content on the locked mode screens of smartphones. “Majority of Android phones use our technology,” says Tewari. Roposo would bring to Glance additional content, its community of creators and influencers, and an experienced team. Glance, in turn, would further the reach of Roposo’s videos given its massive scale. “With more than 100 million daily active Glance users, content created on Roposo naturally flows into Glance and creates a flywheel effect,” says Tewari [2].

Roposo’s video technology, including its camera and creation tool, painstakingly built and refined over the years, is a strong differentiator. Moreover, because of the synergies between Roposo and Glance, says Tewari, “you can go from being a star to a superstar. Our ability to make money for our creators is very high”. Content creators on Roposo get paid in redeemable points for every view of their videos, as opposed to TikTok, where users monetized their content through brand associations.

India has a viable chance to become the world's 4th largest technology hub after the U.S., China, and Russia. The Indian government’s ban, which covered other big Chinese names such as UC Web mobile browser and WeChat messaging app, followed a border conflict between India and China. India cited privacy and security concerns, but the restrictions have dramatically altered the competitive landscape in the nation’s digital economy .

They give local firms a fighting chance at winning a larger chunk of the countries more than half-a-billion internet users. They could even pave the way for some Indian firms to compete more aggressively with global giants such as Amazon and Facebook.

Reinforcing the new hard-line, the Indian government has also asked Chinese companies such as ByteDance, which owns TikTok, to answer 77 questions about their apps, including whether they censored content, worked on behalf of foreign governments or lobbied influencers.

India’s Information Technology Ministry has given the companies three weeks to respond to the questionnaire and said unspecified follow-up action would be taken, two sources said [3].

The banned apps were asked whether they acted at the behest of any foreign government to edit, promote, or demote any content. One theme of the questionnaire was whether the content was censored after an attack last year carried out by a Pakistan-based militant group in Pulwama district in Kashmir. The attack killed at least 40 Indian police officers and heightened tensions between India and Pakistan [4].

“In the aftermath of the Pulwama Attack of 2019, did the company/app censor content relating to the attack or its perpetrators?” the question reads. TikTok said it was working to respond to the ministry’s queries and that it complied with all Indian laws, adding that users’ data security and privacy were its top priorities.

A source familiar with the government’s thinking said the queries were in line with federal procedures and the same questions were sent to all affected companies. One question seeks to investigate if company executives in India communicated with film stars, social media influencers or journalists to promote any content, even if the communication was not for commercial purposes. Other queries were around advertisers, business structures, taxation practices and privacy policies, the document showed [5].

Meanwhile, Roposo, backed by the SoftBank-funded InMobi, presently has the funds it needs to grow, says Tewari. Instagram too has the deep pockets of Facebook to fall back on.

Second, to succeed in this business, platforms need a strong community of creators. Insiders cite the importance of the “network effect” where more creators lead to more content, which leads to more users. More users, in turn, demand more content, which spawns more creators. Virality is crucial for such businesses. Only then will you see an avalanche of users.

Put another way, creators will be attracted to platforms that are able to bring them fame by way of a number of views, and brand associations or redeemable cash rewards. Users on the other hand, fickle as they are, will be glued to platforms that offer quality content, and provide engagement by way of campaigns or competitions.

Third, technology is the key to success. TikTok’s personalized recommendation algorithm kept users hooked, says Lunia. For any platform to replicate that its machine-learning and artificial intelligence capabilities need to be on point.

Summary:

Battlers in other categories have also received a windfall after other Chinese names like popular image scanner CamScanner were also blocked. The new contenders from a variety of categories have three themes in common. Their apps are made in India. Their data is stored in India. Their content, mainly in regional languages, is attuned to local sensibilities.

The followers of an Indian spiritual guru, Sri Sri Ravishankar, created Elyments, an all-in-one rival for WhatsApp, Facebook, and Instagram. Asia’s richest man Mukesh Ambani, of the Reliance conglomerate, launched JioMeet, a video conferencing rival to the popular San Jose-based Zoom.

Roposo itself is getting a deluge of influencer marketing agencies and celebrities wanting to come aboard. It’s discussing contracts with celebrity users and content creators. It’s investing in-camera filters and Indian themes.

“This isn’t an opportunity just for entrepreneurs,” said Tewari. “Investors ought to be rushing over.” [6]

This political dispute remains embroiled in a tussle that has assumed nationalist overtones and is unlikely to get settled anytime soon. Luck, as it were, is another component for success.

Find out more about the Emerging Markets Internet and Ecommerce UCITS ETF - EMQQ here.