In an interview with India Today TV, Infosys co-founder Nandan Nilekani said that making apps like TikTok is not a problem. But getting the business model right for apps in India is not easy.
ow that TikTok and 58 other Chinese apps are banned in India, there is talk of building replacements apps within the country. On Saturday night Infosys co-founder Nandan Nilekani told India Today TV that building apps like TikTok is certainly possible within India. The bigger problem is not the building of apps, he said, but getting the business model right and in place because India is still not a very big digital advertising market and apps like TikTok are fuelled by advertising.
“We certainly can build our own Tik Tok and other apps in India. But the challenge here is slightly more difficult. You have to understand the business models of these applications. Like Facebook and Google, TikTok’s main revenue comes from advertisements. And last year globally, ByteDance which owns TikTok, had $17 billion revenue with $3 billion in profit, essentially in China and the US,” said Nilekani.
The problem is that India is yet to be a big digital advertising market like China and the US. “India is not a very big advertisement market. Total ad spending in India across TV, print and digital is around $10-12 billion and in the digital space it is about $2-3 billion dollars,” said Nilekani. “So, most of these products essentially in India don’t make money. But they are here for strategic reasons because they want to build a large userbase.”
Essentially what Nilekani means is that for now apps like TikTok are in India because they want a slice of a country’s large userbase, something that they will be able to monetise in future. As far as their present India operations are concerned, they are sort of subsidised by their revenue from other markets, most notably the US and China.
Like WhatsApp may have 400 million users in India but I don’t think they make a lot of money out of it. So, if you want to have an Indian product, they don’t have the revenue from other countries to cross-subsidise. I think it is little more than a technology issue. How do we create an advertisement-led product in India which is sustainable,” said Nilekani.