Can Microsoft buyout be the way forward for TikTok in India too?

Experts discuss the prospects of Microsoft repeating its US feat in India, helping the short-video app sidestep the ban and wrest its market back from competitors

e4m by Tasmayee Laha Roy
Updated: Aug 7, 2020 9:17 AM

Buying TikTok makes perfect sense for Microsoft as it aims at moving from enterprise to consumer space. While talks are on for buying the US operations, along with three other major markets, TikTok India too can escape the ban if procured by them. According to experts if the short-video app doesn’t make a comeback soon, alternative social media networks can usurp its market in the country.

 “With 120 million monthly users, TikTok India definitely looks like a lucrative market for Microsoft to consider after US, Canada, Australia and New Zealand. However, several factors like the existing government ban and indigenous brands, already trying to capture the short-video user-generated content market, are keeping India off the sale negotiations,” said Chetan Asher, Founder & CEO, Tonic Worldwide.

So while India might have been the app’s largest international market, the government ban is a huge deal breaker.

“Microsoft will definitely eye TikTok's Indian entity if at all the government ban is lifted. India is one of the key markets for Microsoft and TikTok gives them another chance to gain access to the massive video data that billions of Indians have created. It also puts them in a billion-dollar ad market. Most importantly, looking at the future, Microsoft can again take a leap in the mobile devices market with built-in features on TikTok only on their devices! So if the government allows, this will redeem Microsoft's quest to be the cool kid on the block in India,” said Ankur Pujari, Co-founder and Growth Lead, Hyper Connect Asia.

In the last few months before the ban, Tik Tok India partnered with various brands in the finance, eCommerce, internet, retail, automobile, fashion FMCG, BFSI and education space. Names like Pepsi, Kaya, Emami, Oreo, Lifebuoy, Apple and Dettol leveraged the platform to drive their campaigns. With the ban, however, the app is fast losing its market share to other players in the segment. In spite of getting popular brands on board, only a minuscule part of ad budgets was spent on the platform by advertisers.

“Brands were just warming up to the idea of TikTok in India. So there isn’t much in terms of revenue from the market if Microsoft considers buying out the India operation but if they are looking at expansion they might negotiate for India because only TikTok could give them access to data of an age group that is present in no other Microsoft products,” said Mehul Gupta, co-founder and CEO at SoCheers.

Data could be an important factor for Microsoft to consider when it comes to the Indian market but is that enough to be a deal sweetener? Not immediately say experts.

“The TikTok deal will give Microsoft access to the younger audience and their data, but whether they want that access in India is not certain at the moment. Even when the Microsoft deal is finalised with the four markets, India will be a long route map and the market will not wait till then. The sector TikTok is a part of is hardly a fragmented one. It is ‘a winner takes it all’ game,” said Gautam Mehra, Chief Data Officer (South Asia) & CEO of Programmatic, Dentsu Aegis Network.

While it is purely speculative, the user fraternity is hopeful that the platform would make a comeback.

“While the China ownership hangover will continue, if there is some ownership that can emanate out of India and buy out TikTok for India as well. It should help the platform to restart its operations here. Its popularity among the Indian audience is immense and is evident from the huge subscriber base here, which in turn will help the entire ecosystem of influencers and brands who look forward to being present on this platform,” said Gopa Kumar, COO Isobar India.

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