Why is TikTok's parent company floating second entity in India?

(Image credit: ByteDance)

Amidst backlash over contents on TiKTok and also controversy over Chinese apps comes the development that ByteDance --- TikTok's parent company --- is reportedly setting up a second corporate entity in India. 

According to a news report in the Economic Times, the new entity will provide IT and IT-enabled services to support ByteDance’s platforms present across the globe. This include, among others, TikTok, Helo, and Vigo Video.

The company is all set to file an application with the Department for Promotion of Industry and Internal Trade (DPIIT) in the next few weeks.

“There will be data and technology transfer into India with ByteDance looking to ramp up its workforce in India, a market where the company will look to create a centre of excellence over the near-term,” the report said.

Intriguing developments

ByteDance's latest gambit is interesting as well as intriguing as it comes in the backdrop of what has been a tmultuous period for Chinese apps, espcially TikTok, in India.

There has been a growing campaign against TikTok and Chinese apps for various reasons including political.

In the event, ByteDance setting another entity in India will verily set the cat among the pigeons.

But ByteDance seems to be acting under a different global compulsion. In response to an emerging new world reality, the company is apparently trying to shed its Chinese image. ByteDance has been making moves to shift its teams from China as part of a new strategy.

It is also reportedly speding a huge amounts of money in public relations and ads for shoring up the image of the controversy-ridden TikTok. Aside, it is splurging in the Indian market --- around 10 million per month according to this tweet.

India is certainly an important and pivotal play area for ByteDance to move away from its Chinese image and also be acceptable to the Western world.

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Away from China, towards India

Recently, Disney’s Kevin Mayer became the CEO of TikTok, and this was interpreted by analysts as one of the steps by ByteDance to move the decision-making authorities and research team from China.

ByteDance, according to news reports, has expanded TikTok’s engineering, and research & development operations in Mountain View, California. As per reports, the company had hired over 150 engineers for its California team.

And now ByteDance is also set to increase its footprint in India with a new entity.

It may be recalled, in October 2016, ByteDance invested in India's largest vernacular content aggregation platform Dailyhunt. It claims to aggregate 250,000 news and content articles every day in 14 languages, gathered from over 1,300 publication partners. 

ByteDance has also done a test release of its music streaming app Resso in December of 2019 in India.

To be sure, ByteDance has India in its focus for long. But how this pans out in the new climate of animosity between India and China is something to be seen.