Alibaba's Cave and case of 59 banned apps!

In childhood all of us heard of the story when young Alibaba sets out on a trail to find out the treasure trove hidden in a cave. The recent event of 59 Chinese apps banned in India brought forth a lot of similarities and also the name Alibaba, although in a different context. But the names, actors, actions are unimportant..treasure troves are what drive the explorers..the people who love and thrive on challenges..

(Image Source: Shutterstock(dot)com)

As I am not an addicted mobile app user specially when it comes to online shopping, selfies, social messaging, multi-player gaming or creating my own videos, neither I share much files through mobile..I was curious as to what those apps were all about and why they must have been banned. My first motive was to see how much of those Chinese apps I was using? Surprisingly cam scanner turned out to be the app from that list of banned apps I was using. As the apps were 59 in number, I started looking for information on the internet, in expectation of finding a comprehensive report which will tell me about the categories of those apps, the Chinese companies who had created those apps, who owned those companies, when were those apps/companies launched and what Chinese cities they belonged to? I could not find that information anywhere in a comprehensive manner as the news space is abuzz with the maps of territories, political statements, daily changing Covid numbers, global news about anarchies and social disruption. But first thing first..are all those apps having Chinese connection?

Chinese Connection

As I looked for data on internet without paying money for data sources, I had no other option but to create my own data, no matter how correct and synchronized it is with the actual numbers. I rather went for 'order of magnitude' approach to understand the context in a broader perspective. Also as the days are passing by, more and more websites and websources with that data are getting blocked or altered. But surely, all those apps are owned by Chinese individuals. But as per the information I have seen, 56 of these 59 companies are based out of China or mainland China (sorry I am not talking about the restaurant with the same name!) while 1 is from Taiwan and 2 are from Singapore. Yet almost all the owners are either Chinese or they are of Chinese origin.

Please click here to view the data in an interactive form. (This link takes you to my Tableau Story published on Tableau Public Site.)

Geography 

With analysis came a realization. All of these App companies are from the Eastern China starting with Beijing, then Xihu, Guangzhou, Hangzhou, Jing'an, Minhang, Nanshan, Nanjing, Panyu, Shanghai, Xiamen and Xihu, necessarily not in that order . One thing is clear, around 30 of those 59 apps have office in Beijing, obviously so being the capital city. One needs to spent time to understand first to spell those city names right and then figure out whether it is a city, province, district..it can get confusing at times.

Ownership 

The other important aspect was about the ownership of these companies. If you search for information, you may realize that there are not many companies as they sound to be. The biggest of them are Alibaba, Weibo, Baidu, Meitu,UC Web, and Tencent apart from the rest of smaller bunch. These 7-8 to companies have multiples of apps in their fold and for companies like Tencent and Alibaba, they have multiples of App Making companies in their fold. All of these 7-8 companies are multi-billion dollar companies when I scoured the information for 2019 figures. It is difficult to get the information about each of the app for a particular year and find its revenue for that year as we are talking about the quagmire of inter-company, subsidy, sister company and similar such relationships.

App Categorization

If you categorize an app as a social app, it is no categorization at all. Almost all of those mobile apps
 are social. If you were to categorize those apps further based on activities, you can get video creation, video editing, video sharing, photo editing, status sharing, antivirus, battery back up, browser, fashion buying, gaming, clicking selfies, privacy restriction, and news as further categorizations. Almost all of these actions are followed up with the action of sharing them on social platform. So there goes the data sharing angle and the data being used by the AI/ML platforms these Apps utilize.

Target Market

As I mentioned at the start of the writeup, I was not aware of most of these apps, as I was not in the target market segment. If you glance through the activities mentioned above, the target market is primarily the youth, men and women who are more social and more on the go. These are the youth from the rural as well as urban population. No wonder that each of these apps had atleast 10 million users in either the rural or urban population of India and the famous ones like Tiktok had around billion worldwide. So the upper ceiling of this user footprint from India can be safely assumed at 600 million if you were to provide a conservative estimate. So you can assume that these apps had 100-200 million active monthly users, again being conservative in estimation. As per one industry estimation, if you have 5 million active daily users who spend 30 minutes on your apps, you easily get $75000 per day just through eCPM. Of course, this is a very rough estimate. But if you have 100s of millions of users across all the age, gender, rural-urban categories, spending minimum 1-3 hours on mobile phone(this is my stretch of imagination of daily time spent on Mobile Apps!) we are easily looking at a multi-billion dollar Indian market that was captured by the Chinese App makers along with the other global leaders like Facebook and Insta. If you are an analyst in the digital marketing segment, you may find issues with my ball park estimate, but will agree that I am talking about a minimum of the market size. Multi-billion dollar market my dear friends, was opened up to non-Chinese App makers..I wont call it Indian App makers as there are no blockages for non-Chinese apps, no matter where they come from. If Indian App makers want to grow big, this is the time to explode!

Indian Takeaway from Chinese Apps

As I analyzed those apps, I looked for the year those apps were launched or the app company was formed. The intention was to understand how long did it take for that company to get 100s of million users. It is a safe assumption from the data that after the launch of the apps, it took 5-10 years for them to get into multi-million users. But these companies had very recently entered in India, say 2015-16. So in the short span of 4-5 years, they hit the multi-million user mark in India. But before Corona time, the average time spent on mobile and social apps was less, as people were able to meet and greet others without hesitation. Here comes corona, social restrictions, more focus on online meetings and the active mobile app usage has easily jumped 2-5 times across various age and socio-categories. Again if you bring the pre-corona multi-billion dollar market in this context, the market size is also going to increase multi-fold. And that is the whole reason why do you see billions being poured into the digital platforms created by likes of Jio. It is safe to say that Mr. Mukesh Ambani has finally realized his 'Jack Ma of Indian Digital market' moment with the ban of 59 Chinese Apps.

The multi-billion dollar trove of Indian Mobile App User Market is thrown open to challenger and explorers. Even the investors have made a beeline to Jio. Now it will be interesting to see who become the new Weibos, Alibaba, Weibo, Baidu, Meitu, UC Web, and Tencent from the Indian challengers..Digi-preneurs here comes your 'open-sesame' moment now! Help us become digitally 'Atmanirbhar'!