Chinese tech companies are suffering from the showdown that happened last June. The causes of this showdown is due to the crossfire of an intense geopolitical standoff between China and India this year.
Since then, tensions between the two countries started to rise. In the following week, Indian officials banned apps from Chinese tech giants. These Chinese tech companies including Bytedance, Alibaba (BABA) and Tencent (TCEHY). Besides, India also banned Huawei from participating in India’s 5G network. And last month, the Indian government even banned dozens more Chinese apps, worsen the condition of Chinese tech companies in India.
They can ‘do nothing’
According to ByteDance, TikTok lost 200 million Indian users during late June. This amount of users is equivalent to twice the amount of users in the United States. The company had not yet made money on TikTok in India. However, they had already spent heavily on expanding and establishing the market there.
In addition, tech companies also need a huge amount of data to build better products. In this case, India’s internet users are demographically diversified, making the country’s data highly valuable.
Google (GOOGL) CEO Sundar Pichai said in a blog post earlier this year that the company’s efforts in India “have deepened our understanding of how technology can be helpful to all different types of people.”
“Building products for India first has helped us build better products for users everywhere,” he wrote.
Tech companies need a lot of updated data to keep algorithms competitive. Fernandes predicts that the deprivation of data from India will handicap Chinese apps’ development for the global market.
“The global strategies of Chinese tech firms are now being hijacked,” said Abishur Prakash, a geopolitical futurist and co-founder of Centre for Innovating the Future. He also said that the plan of Chinese companies to rely on India to build and test new products are not going anywhere.
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