ByteDance plans to set up second entity in India, sources say

At a time when ByteDance-owned short-video app TikTok is weathering mounting criticism due to objectionable content leading to a steep fall in downloads in India, the Beijing-based internet giant is setting up another entity in the country to provide IT services.

Photo credit: Bytedance

The Economic Times, citing two sources, said the new entity will likely offer IT-enabled support and services to ByteDance’s platforms globally. This would also include working on content generated across its various platforms, the report said.

While ByteDance operates TikTok in the international market including India, it specifically launched Helo for Indian users to compete with local incumbent Sharechat. Back home, it runs the Chinese version of TikTok, Douyin, content discovery platform Toutiao, and video-sharing platform Xigua Video, among other apps.

ByteDance is expected to file an application with Indian regulators, including those in the Department for Promotion of Industry and Internal Trade, over the next few weeks, the report said. At present, it owns and operates ByteDance India Services in the country.

The Chinese internet conglomerate is looking to create a center of excellence in India in the near term, for which the company will be ramping up its workforce, one of the sources told the Economic Times. According to the source, this will require data and technology transfer into the country, and hence the new entity.

ByteDance reportedly had a workforce of over 60,000 worldwide along with 15 research and development centers as of November last year.

This is in line with the company’s broader strategy of shifting its center of power away from China. The move seems to be aimed at mollifying the rising concerns across countries, including India, that its apps pose risk to national security and compromise users’ data privacy.

Earlier in May, ByteDance poached Walt Disney top executive Kevin Mayer, who led the successful launch of the company’s new streaming platform Disney+ late last year, and appointed him as CEO of TikTok. It also reportedly expanded TikTok’s engineering and research and development operations in Mountain View, California, a Reuters report said.

India remains one of the most important markets for ByteDance, where it pledged to invest US$1 billion last year. However, over the past few weeks, its most popular app TikTok has come under fire over videos that allegedly normalizes acid attacks, rape, animal cruelty, hate-mongering, and violence. Many netizens have since called for banning the app in the country.

Reportedly, TikTok’s downloads fell by 34% and 28% month on month in April and May (up to May 23), respectively.

India accounts for one-third of the overall 2 billion global downloads of the duo TikTok and Douyin, according to a report published by Sensor Tower Store Intelligence in April.

The San Francisco-based marketing intelligence firm said India has been the biggest driver of TikTok installs, generating 611 million to date or 30.3% of the total. China was ranked second, accumulating 196.6 million to date, or 9.7% of all downloads. At 165 million downloads, the US is third in line in terms of apps installed.

This report was first published on KrAsia.