Ban on Chinese apps - Impact and the road ahead for brands & influencers

Ban on Chinese apps
Ban on Chinese apps

The band on 59 Chinese apps, including TikTok, UC Browser, Helo, Likee, among others, has thrown brands’ as well as social media influencers’ plans in a turmoil.

As reported earlier, in a late night move on June 29, 2020, the Ministry of Information Technology, invoking it’s power under section 69A of the Information Technology Act read with the relevant provisions of the Information Technology (Procedure and Safeguards for Blocking of Access of Information by Public) Rules 2009 and in view of the emergent nature of threats, decided to block 59 Chinese apps since in view of information available they are engaged in activities which is prejudicial to sovereignty and integrity of India, defence of India, security of state and public order.

Also read: Begin with purpose, deliver value – Nuggets of wisdom on Influencer marketing

Prior to this move, 52 Chinese were flagged as threat to national security by the Indian intelligence agencies earlier this month.

A cross-section of digital experts have gauged the implications of this ban, especially for brands who had already formulated their plans around TikTok, besides analysing how the influencer ecosystem will be impacted.

Industry Reactions

Shradha Agarwal, Co-founder & COO, Grapes Digital
Shradha Agarwal, Co-founder & COO, Grapes Digital

Shradha Agarwal, Co-founder & COO, Grapes Digital:

“India is the world’s second largest Internet market with nearly 723 million online population. This is the first time that the Government of India has ordered a ban on so many Chinese apps. Over the last year or two, TikTok has created a huge number of users from India, largely from younger age groups and with the same reason larger brands were considering the platform to connect with their target audiences with engaging and quirky content. With this ban, strategies for a lot of brands will need to be re-visited and business as an overall will also be impacted, especially for brands that resonate with the younger audiences. The app has gone completely offline and is no longer working for users in India, and the impact is going to be very high for multiple stakeholders.

  1. Clients: TikTok was not only being used as a reach and branding platform, but also as a platform to drive performance for FMCG, beauty, education and finance sectors. The hashtag challenge on TikTok was booked for the next 60 days, which means all plans related to driving awareness and engagement are to be replanned.
  2. Agencies: If the client’s plans suggested or closed for any campaigns had TikTok, then it means a whole lot of rework for agencies to identify new platforms or a huge loss of revenue as clients might not use that money at all for anything else. A hashtag challenge used to cost Rs 35 lakh approximately, now imagine that even if you earn 5-10 per cent as media commission, all that is gone. Now coming to retainers, a lot of clients were giving a fixed retainer to drive content on TikTok, now that the app is banned that fixed revenue also goes down the drain.
  3. Influencers: A lot of agencies were also using TikTok influencers for their clients, and trust me, a lot of influencers’ livelihood was based on TikTok. All that is also now stopped, creating a huge uproar amongst influencer arms of the agencies and these influencers themselves.”

 

Sandeep Sreekumar, Managing Director, Media Moments
Sandeep Sreekumar, Managing Director, Media Moments

Sandeep Sreekumar, Managing Director, Media Moments:

“Over the years, apps like TikTok, Helo and the likes had caught the eye of various brands and had developed into strong marketing mediums. Now, with the recent update, there will be a shift in the platforms used by the influencers while the overall approach will remain the same. This move will also open new opportunities for many Indian apps. And it will be interesting to see how Indian apps like Chingari, Mitron and Roposo will come to the fore and cash in on the situation. For instance, many apps experienced a massive increase in the download rates soon after the announcement.

Having said that, thorough understanding, planning and research will be required before associating with these apps to deliver the right message and content. But as long as quality content is being created, audiences will follow and as long as audiences are there, brands will invest regardless of the platform.”

Divanshi Gupta, Director, The Marcom Avenue
Divanshi Gupta, Director, The Marcom Avenue

Divanshi Gupta, Director, The Marcom Avenue:

“The recent geopolitical events on Indo-China borders have resulted in the Indian Government banning TikTok and other 58 apps in the light of protecting the privacy and sovereignty of its residents. This action may have its repercussions on both the governments, but it is definitely going to have a significant impact on the brands and advertisers who had set aside the quarter budget for influencer marketing campaigns on TikTok social media. This short-form content media app had begun to attract a considerable number of users. And now, the advertisers will have to undeniably shift their strategy and focus on creating long-form content on platforms, like YouTube and Instagram, with already established and known faces by bidding adieu to TikTok influencers.”

Honey Singh, CEO & Co-Founder, ARM Worldwide
Honey Singh, CEO & Co-Founder, ARM Worldwide

Honey Singh, CEO & Co-Founder, ARM Worldwide:

“Content creators have already started nurturing their other platforms like Instagram and YouTube. After this ban, I feel there will be a significant spike on Instagram. These content creators will also face monetary losses since brands have already started pausing their planned TikTok activities for now. At the moment, we are already in touch with many content creators and figuring out how to finish ongoing campaigns. Lastly, this ban will also allow these content creators to think about building a uniform fan following.

Impact on Overall influencer marketing: TikTok was just in its initial phases in terms of influencer marketing; it was hardly 15-20 per cent of overall budgets assigned for influencers marketing. So, while it was a part of influencer marketing, it was not the backbone of it. TikTok helped change brand perception since marketers recently started experimenting with the platform for influencers and paid media. In the case of regional outreach, brands will shift back to YouTube.

Impact current campaigns: While it was recently removed from the Play Store listing, existing users having the app installed can still access the platform. While there are no clear guidelines or clarity, brands should complete planned commitments with an additional post on linked channels like Instagram.

Impact for Influencers’ earning: Anti-China sentiments have already started depleting the wallets of influencers. After the ban, all the scheduled campaigns from the brands are on pause until further clarity from the Government. Creators having large followings on other channels like Instagram/ YouTube may recover, but there will be a significant loss for them.

The silver lining is that content creators should realise that nothing is permanent. They should start working on an omni-channel presence. Aside from nurturing an audience on a platform, a community beyond a single rented house is a must. The thumb rule for any brand is to know exactly where their audience is. Long-term solutions can include developing platforms such as forums, websites, blogs and newsletters to nurture their audience beyond a single platform.”

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