Will Reliance rescue TikTok’s Indian unit?

By Rahul Vaimal, Associate Editor
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Chinese giant ByteDance is engaging in early discussions with Reliance Industries Limited, the parent company of India’s telecom giant Jio Platforms, to financially support TikTok’s business in India.

People familiar with the matter said that the two firms started negotiations late last month and have yet to reach an agreement. TikTok’s market in India, which is its biggest in terms of users, had accumulated more than 200 million users before being banned late June and is valued at over $3 billion.

An investment in TikTok could help the oil-to-retail giant Reliance, India’s most valuable firm, establish deeper ties with consumers. While Jio Platforms has gathered almost 400 million users in India in less than four years of existence, its consumer-facing apps have struggled to find the same appeal.

The Indian giant’s digital company has been raising about $20 billion from 13 high-profile investors, including Facebook and Google, since late April of this year. Google said it will partner with Jio Platforms to launch a customized version of their mobile Android operating system to power Android smartphones at low cost. Facebook said that it will partner with Reliance to help digitize the 60 million small and medium-sized enterprises in the country.

The preliminary talks are happening as ByteDance struggles to retain some of its main employees in India. According to reports, a number of the company’s high-level executives including those who supervised the operations of ByteDance-owned Helo app in India, have left the company in recent weeks.

ByteDance has assured employees that it is addressing concerns of the Indian government, and does not intend to lay off employees in the country. In India, ByteDance employs about 2,000 people.

ByteDance is engaging separately with Microsoft to sell its business in select markets, including the United States. Earlier reports had indicated that the two companies had expanded the deal’s scope to include TikTok’s business in other countries, including Europe and India.

An agreement with Reliance — owned by Mukesh Ambani, India’s richest man — could help ByteDance clear up concerns of the Indian government that banned TikTok and 58 other apps produced by Chinese firms in late June, citing security concerns.

Scores of local startups have introduced standalone apps or integrated features to mimic TikTok social experience. In recent weeks the local apps claimed to have added tens of millions of new users.

According to sources, Facebook, which launched Reels in Instagram in India last month, has seen the regular engagement across its service family rise more than 25% since TikTok’s ban.