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Chinese apps banned: A look at the most popular ones, their business and reach in India

Chinese Apps Banned in India: Several of the 59 Chinese apps banned by the government have a wide reach in India. Who owns the most popular ones, who runs their India operations, and what is their reach in the country?

The logos of Chinese apps from left, clockwise: TikTok, UC Browser and UCNews, ShareIt, Club Factory, Shein and CamScanner.

On Monday, the Centre announced an interim ban on 59 apps with Chinese links, citing “emergent threats” to the country’s sovereignty and national security. These included popular mobile apps such as TikTok, CamScanner and UCBrowser, which together command several hundred million users in the country. Some of the larger ones like TikTok, UCBrowser and ShareIt also have a significant presence in the country in terms of revenue and number of employees on their payrolls.

A look at some of the more widely used apps among the 59 banned:

TikTok & Helo

The two social media apps, which are operated by an entity called Bytedance (India) Technology Pvt Ltd, together command more than 170 million active users across the country. Notably, India is the largest market for TikTok with more than 611 million downloads, representing nearly a third of the video-platform’s base, followed by China (where it operates under a different brand) and the US.

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However, India is not among the top revenue-generating geographies for the app. In 2018-19, the first full year of the company’s operations in the country, Bytedance India posted revenues of Rs 43.6 crore, and the company targeted revenues of Rs 100 crore for the following year. In the US, the app has been downloaded 165 million times, with revenues of $86.5 million (over Rs 650 crore) in 2019. China, with nearly 197 million users, contributed $331 million (around Rs 2,500 crore) during the year, according to Sensor Tower.

The company also has administrative presence across eight cities in the country and employs over 1,000 people. Bytedance India, however, is not owned by a Chinese entity. According to corporate structure available on Bytedance’s website, the parent entity — Bytedance Ltd — is registered in the Cayman Islands. This parent company has five subsidiaries, one of which is TikTok Ltd — also registered in Cayman Islands. Under TikTok Ltd, a Singapore-based entity TikTok Pte Ltd is registered, under which entities operating from India and Southeast Asia are registered.

Read | China data-sharing law a key issue, apps get 48 hours to clarify

The IT Ministry is specifically expected to seek details from the companies running these apps on data sharing by these companies under a Chinese law, which requires companies of Chinese origin to share data with that country’s intelligence agencies, irrespective of wherever in the world they are operating. Last year, Bytedance had announced an investment of $1 billion in the Indian market over a period of three years.

UC Browser and UCNews

The Alibaba Group platforms are run by an entity called UCWeb Mobile Pvt Ltd, which has more than 130 million active users. UC Browser, in fact, is the second most used mobile Internet browser in the country only behind Google Chrome, with a market share of around 22%, compared with Chrome’s 70%. UCWeb Mobile, which has less than 100 employees in the country, recorded revenues of Rs 226.68 crore from the country in 2018-19, primarily from advertising income, according to filings with the Registrar of Companies (RoC). This is part of Alibaba Group’s digital media and entertainment segment, which clocked consolidated revenues of $3.59 billion for the year ended March 31, 2019.

According to filings with the Registrar of Companies, the India entity UCWeb Mobile Pvt Ltd is held 99% by UC Mobile New World, based in British Virgin Islands. However, government data has recorded investment by this entity under FDI inflow from China. The remaining 1% stake in UCWeb Mobile Pvt Ltd is held by an entity UC Mobile International Ltd, registered in the Cayman Islands.

The full list of 59 Chinese apps banned by the government.

ShareIt

ShareIt is one of the most popular file-sharing tools, with more than 400 million active users in India. The app, which was almost entirely marketed on the basis of word of mouth, has more than 1.8 billion users worldwide. However, the company has not been able to monetise its platform beyond a point, making only Rs 14.73 crore during 2018-19 from its India entity ShareIt Technology India Pvt Ltd. In terms of revenue, the Indian segment contributes 15-20% to the company’s global revenues. The company acquired entertainment platform Fastfilmz in 2018, and appointed its CEO Karam Malhotra as the CEO of ShareIt India. The Indian entity ShareIt Technology India Pvt Ltd is held 99.99% by Hong Kong-based ShareIt HK Technology Ltd.

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Club Factory

The online marketplace, which claims to be India’s third-largest e-commerce company, has managed to onboard 30,000 sellers on its platform. The company’s Indian entity GlobeMax Commerce India Pvt Ltd, is 99.99% owned by a Hong Kong-based company Unbeaten Price Ltd. During 2018-19, the GlobeMax Commerce clocked revenues of Rs 172.14 crore. Club Factory has around 90 employees on its rolls.

Shein

Shein is another e-commerce platform focused on fashion and lifestyle products. In India, its operations were being run by XIYIN India Pvt Ltd, based in Gurgaon. The company, which targeted smaller tier-II and tier-III towns in India, has around 50 employees in the country. The company had crossed more than 1 million active users in India but last year partially shut down its operations after the Customs department cracked down on the company over alleged import duty evasion.

CamScanner

CamScanner, which is the most widely used mobile scanning app in the world, has more than 100 million users in India. The app, which is run by INTSIG Information Co Ltd registered in Shanghai, China, does not have an entity registered in India.

This article first appeared in the print edition on July 1, 2020 under the title ‘The business of Chinese apps’.

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