TikTok’s Parent Company Expected To Lose $6 Billion After App Banned In India

A picture of the TikTok app.
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TikTok’s parent company may be hit very hard by a recent ban by the Indian government, a new report suggested.

After India announced that the popular app was among the nearly 60 Chinese-based apps that were being banned in the country, a new report indicated that it could cost TikTok’s parent company as much as $6 billion. As The Economic Times reported, the tech giant ByteDance Ltd. is expected to lose the revenue from TikTok and two other popular apps that were targeted as part of a wider crackdown on Chinese apps after violent border clashes between the two nations.

As the report noted, the Indian government accused the Chinese companies of taking part in activities “prejudicial to sovereignty and integrity of India, defence of India, security of state and public order” in an announcement last month. The list of the banned companies included a number of popular social media and business apps.

TikTok’s parent company was hit particularly hard. ByteDance is also the maker of the popular social media app Helo, which is offered in a number of Indian languages and was also banned.

As AndroidAuthority reported, it remains unclear just how the Indian government will enforce the ban, but the expected loss of revenue for TikTok’s parent company seems to suggest that it will have a devastating impact on the company.

“While it may be tough for India to enforce the bans, it does appear as though TikTok’s parent company is hunkering down and preparing for the worst. After all, that’s a tremendous loss of revenue that the company is expecting to take,” the report noted.

As TechCrunch reported, the Indian audience was especially important for TikTok, making up the biggest market for the app. Other apps struck down in the ban also had a major foothold in India, including Club Factory, which was the third-largest e-commerce firm in the country, and Community and Video Call apps from Xiaomi, which were among the most-used smartphone apps. As the report noted, the apps targeted in the ban had more than 500 million users across India in the month of May. The bans were expected to affect close to one-third of all smartphone users in India as well.

It was also unclear whether the ban would be permanent or if it could be lifted amid negotiations between the two countries after the violence at the border. TikTok has issued a statement in response to the ban saying that it was responsible with user data.