The move is also significant because of the Indian government's ongoing focus on data localisation, as well as the increasing number of issues that TikTok
is facing in the country.
There has also been increasing pressure on other large social media firms, most of them US-based, including Facebook, Google and Twitter to set up local data centres here, even as the proposed Personal Data Protection Bill, which will clarify the Indian stand on this issue, is yet to be tabled in the Parliament.
"The company is also showing its openness to the as yet under consideration data protection law," said a person familiar with the development. Industry has largely been batting for not mandating local data storage as it will impact cross border data flows and established business models.
Last week, the Indian government asked TikTok
to answer several questions about its operations in India after some groups objected to the some of the content being uploaded there. Business Standard
also reported that as many as five states were considering a ban on the app.
In a short period of time, ByteDance
has managed to onboard over 200 million users on TikTok
in India, helped by its regional focus and artificial intelligence algorithms that serve very personalised content to users that keeps them hooked.
It is also targeting 100 million users for its language content platform Helo by the end of this year.
"It is still mapping out the locations and other details where the data centre will be set up, but is certainly looking for places with great infrastructure, access to high quality fibre connectivity, and long term leases on land," said the person quoted above.
The Beijing-headquartered ByteDance
has made waves for being the first Chinese company to make it big outside of its home turf. It also helps that ByteDance is now the world's most valuable startup, valued at $75 billion.
At the heart of what ByteDance has done is having figured out an algorithm that serves users a feed of content that keeps them hooked and also keeps them coming back for more. The company has several apps which combined hit 1 billion users worldwide.
While TikTok is undoubtedly driving the growth of its parent company, the fact that it is investing heavily in the India market shows that the company means serious business in the country.
ByteDance has also consistently maintained that it monitors both its platforms in India for content and employs over 500 people in the country.
Improving content quality
Last week, the Centre has also issued notices to social media platforms TikTok and its sister app Helo both a set of 24 questions threatening to ban these apps if it does not receive appropriate response.
Action from Ministry of Electronics and IT (Meity) followed a complaint by Rashtriya Swayamsevak Sangh (RSS) affiliate Swadeshi Jagran Manch (SJM) to the Prime Minister.
TikTok and Helo in a joint statement said they have plans to invest $1 billion over the period of next three years to develop technology
infrastructure and owns responsibility of local community.
ByteDance has also been working with the Indian government by making efforts to bring ministries and departments on TikTok to promote various initiatives.
Under its Tiktok for good initiative, the company has launched a slew of campaigns such as #tiktoktravel, #edutok #thegoodtouch targeted at getting more meaningful content on the platform. Besides this, TikTok also announced a partnership with National Skill Development Corporation to promote skill in India.