We are aware of the latest crunch of news that says, India’s most valuable company Reliance Industries Limited (RIL) is reportedly the latest bidder for the Bytedance-owned TikTok in India
Is Reliance buying TikTok in India?
The Mukesh Ambani-led firm had begun talks last month with the Chinese firm to acquire its operations in India. India is the largest market for the short video app outside China with more than 611 million downloads generated to date, according to data sourced from market intelligence firm Sensor Tower. However, when it comes to monetization, China, the US, and the UK accounted for 90% of the total TikTok revenues. Although Reliance and Bytedance both denied any information on the reported deal, industry analysts predict that Reliance’s acquisition of TikTok is the most likely scenario especially after the Chinese app was banned by the Indian government in June on the grounds of threats to national security and data privacy.
Interestingly, Facebook, which is the largest minority stakeholder in Reliance’s Jio platforms, has also recently launched Instagram Reels in India, where the users can make a short video, embedded in the photo-sharing platform.
While TechCrunch said that TikTok’s India operations were valued at more than $3 billion, the Economic Times said it could be worth anywhere between $2.5 billion to $5 billion.
Reliance, ByteDance, and TikTok did not promptly respond to appeal for comment. In response to the Economic Times though, the Mukesh Ambani-owned company, said the news was just speculation.
Banning of Chinese Apps
The Narendra Modi government, since June 29, has banned 59 Chinese apps, including TikTok and WeChat, for threatening its “sovereignty and integrity” after border tensions with China. Last week, US President Donald Trump unveiled bans on US transactions with the China-based owners of messaging app WeChat and TikTok, which escalated tensions between the two countries.
Microsoft Corp has been in talks to acquire the US operations of the video-sharing app, in an exercise that has been supported by the Trump administration. Social media platform Twitter Inchas also conveyed some interest to conduct a deal with TikTok, sources familiar with the matter reported Reuters late last week.
Sanchit VirGogia, CEO, Greyhound Research wrote in his note that in the present circumstances, Bytedance’s deal with Reliance Jio could be a viable option to clear the regulatory hurdles in India while also helping leverage the nearly 400 million users base of Jio.
“Despite the fact, that Instagram Reels is described as a clone of TikTok, the fact comes out, that the similarity of the features may act as an edge and help the Facebook backed photo-sharing app engaging millions of users in India who were earlier using TikTok. Facebook still has a larger user base than TikTok in India and with time, Instagram Reels can leverage the massive network Facebook has in India. Reels was first smartly tested in low-risk markets and then rolled out in India for scale and mass content – while it may not come across as integrated with other products, it may be too early to judge. Leverage with a broader FB network makes Instagram Reels more compelling than TikTok,” Gogia added.
Tech giant Microsoft had earlier said that it is planning to purchase TikTok in the US and other key markets. US President Donald Trump’s latest executive order last week serving a 45-day deadline for the TikTok sale may likely lead to fast-tracking the potential sale. Microsoft had confirmed that it is in talks with Bytedance to acquire TikTok and that the discussions will be concluded by September 15.
Chinese giant ByteDance is now engaging in some early discussions with Reliance Industries Limited for backing TikTok’s business in India for potentially saving the popular video app’s fate in its biggest market by users, TechCrunch was told by two people familiar with the matter. ByteDance did not respond to a plea for comment. A Reliance spokesperson declined to comment.
An investment in TikTok could act as a turning factor, helping the oil-to-retails giant Reliance, the most valuable firm in India to make deeper connections with consumers.
Some preliminary talks between the two companies come thatByteDanceis also struggling to retain some key employees in India. A handful of high-level executives at the company, inclusive of a policy head and Rohan Mishra, by whomHelo app’s(owned by ByteDance)operations in India, was overseen, left the company last week, according to some people familiar with the matter. Mishra did not give a response to a request for comment Wednesday noon.
Employees have been assured by ByteDance that it is in conversation with the Indian government to resolve New Delhi’s concerns and does not have any plan to layoff employees in the country. Any deal with Reliance — which is owned by Mukesh Ambani, India’s richest man and an ally of Prime Minister of India Narendra Modi — could be a great move helpingByteDance allay concerns of the Indian government, analysts said.
A new report indicates that TikTok chief executive officer (CEO) Kevin Mayer has approached senior RIL executives to analyze if RIL is interested in a stake in the app’s India division.
The Chinese giant is getting engaged separately with Microsoft to sell some of TikTok’s foreign operations including that of the U.S., confirmed by the Windows-maker earlier this month. News got reported by the Financial Times last week that the two companies had broadened the scope of the deal for includingTikTok’s business in other international markets, counting those in Europe and India.
A few local startups, including Twitter-backed ShareChat and Times Internet’s Gaana and MX Player, have launched a few freestanding apps or unified features replicating the social experience provided to the users by TokTok in recent weeks. Also, the local apps have raised some claims of having put on tens of millions of new users throughout the period.
TIK-TOK AND JIO
Jio Platforms is the Indian giant running operations as the nation’s largest telecom operator. But even though Jio Platforms has assembled nearly 400 million subscribers in India in a very short interval of fewer than four years of its existence, its consumer-facing apps have struggled a lot to replicate that appeal.
Since late April this year, the Indian giant’s digital venture has raised about $20 billion from 13 high-profile investors, which includes massive tech giants like Facebook and Google. A statement by Google announced that it would work with Jio Platforms for launching a customized version of its Android mobile operating system for powering low-cost Android smartphones. Facebook declared that it would also collaborate with Reliance helping digitize the country’s 60 million small and medium-sized businesses.
RIL and Jio’s corporate development, strategy, and M&A teams are now examining whether any investment or acquisition is worthwhile at this stage, a recent report by ET cites people with knowledge of the matter.
As of now, RIL has declined to comment on the development and has dismissed them as “speculation and rumours”.
“Our company evaluates numerous opportunities on an ongoing basis. We have made and will be continually making necessary disclosures in compliance with our obligations under SEBI rules and our agreements with the stock exchanges,” as told by the RIL spokesperson to the publication.
With India once the biggest market for TikTok, it is likely that the app will push for re-entry into the country’s market through such a deal.
For now, though, RIL is likely to “strategically” decide to go on with the deal based on the valuation of the company in the coming days.
Written by: Sohini Banerjee, Abhrajyoti Kundu.
Poster: Abhisek Baral