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Chinese companies feel the heat of apps ban: Report

India's Ministry of Electronics and Information Technology has banned more than 200 Chinese apps since June after a deadly clash in Ladakh and growing border tensions between the two nations.

November 27, 2020 / 11:26 AM IST

India's ban on Chinese apps has hurt the business of major Chinese companies which are not sure how long the ban will continue.

The Ministry of Electronics and Information Technology (MeitY) has banned more than 200 Chinese apps since June after a deadly clash and growing border tensions between the two nations. The ministry blacklisted the apps citing threats to sovereignty and national security.

Some of the apps that were banned include e-tailer ClubFactory, short-video platform TikTok and Tencent's gaming app PUBG's mobile version. Some apps belonging to ecommerce major Alibaba were banned recently.

Also read: Govt bans 43 more apps in India; check full list here

Club Factory co-founder Aaron Li expects to lose most of the $100 million raised from investors for expansion in India, Financial Times reported.


"If the consumers cannot see you for a long time, they will not come back," he was quoted as saying by the publication.

In a letter to the ministry, Li said "Club Factory has invested approx. Rs 650 crore ($87.5 million) in India to set up critical infrastructure for ecommerce".

"We are in no manner engaged in any activity which is prejudicial to (the) sovereignty and integrity of India," he said in the letter seen by the newspaper.

Since India is its only market, Club Factory's $100 million of monthly orders dropped to zero in July after the Indian government's notice, the report said. This forced the company to lay off more than 300  workers, half the company's staff, within two weeks.

Alibaba has sacked its staff in the country and cut back on its "innovation initiatives", Financial Times reported.

ByteDance's TikTok has not begun layoffs but morale at the company is low, the report said.

"They are doing busy work, team building, planning for how to win back India when TikTok is allowed back in. But we are worried (employees) will start to leave," a source told the publication.

The companies are uncertain about how long the bans will continue, the report said.

"Until China tensions ease up, there is no reason for the Indian government to relax their stance," Ganesh Rengaswamy, co-founder of venture firm Quona Capital told Financial Times.
Moneycontrol News
first published: Nov 27, 2020 11:26 am
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