RESOLVING THE LEDGER
This is one outlet's own report from CNBC — the article as it was filed. Other outlets are covering the same event; open the full story to compare every source side by side.
See the full story · 1 sources
Monday - Friday, 11:00 - 12:00 SIN/HK | 0500 - 06:00 CET
Hello, this is Priyanka Salve, writing to you from Singapore.
Welcome to the latest edition of " Inside India " — your one-stop destination for stories and developments from the world's fastest-growing large economy.
The success of Gen Z protests in India has handed a surprise victory to Mark Zuckerberg's Meta, cementing its position as the most influential social media company in the world's largest democracy. But with great power comes greater government scrutiny.
This week I explore how Meta's growing clout could be a double-edged sword for the company.
Any thoughts on today's newsletter? Share them with the team.
The Gen Z protests that rocked India last week and forced Prime Minister Narendra Modi's government to act on its demands have marked the rise of two new political influencers in the world's largest democracy.
One is the Cockroach Janta Party , a viral, social media-led youth movement that organized the protests. The second is Mark Zuckerberg's short-form video app Instagram, which was widely used by protesters to raise their concerns with the government and to record clashes with authorities.
The appeal of the app among youth became even more evident when Modi made his first selfie-style Instagram video on July 23, in a bid to reach out to Gen Zs. It raked in a record 300 million-plus views within 24 hours and is nearing 400 million now . Modi has since made more videos and even directed his ministers to build their presence on Instagram.
As per data from digital intelligence provider Sensor Tower, Meta's WhatsApp had an average of 837 million daily active users in India, Instagram 501 million and Facebook 362 million so far this year. On the other hand, Google's YouTube had 646 million, and Elon Musk's X had 15 million, making Meta the dominant social media company in India.
But this growing influence of Meta also exposes it to greater government scrutiny around content moderation, competition, privacy, and digital payments, experts said, adding the U.S. social media company faces similar probes in Europe and America.
The Indian government earlier this month issued a stern warning to Instagram to remove child abuse ads on its platform that followed a warning to WhatsApp over the rollout of a username feature.
Local media also reported Tuesday that the information technology ministry had summoned Meta's global policy heads over concerns about its " non-compliance with the Information Technology Rules , and the prevalence of deepfakes on platforms like Instagram and Facebook."
The ministry was also miffed after access to Modi's selfie-styled video was briefly restricted on Facebook, as per reports. India's IT secretary expressed the government's displeasure at Meta, calling the action "disturbing" in an interview with news agency ANI.
Social media's growing influence puts the government in a paradoxical situation where it wants to tighten compliance of these apps but is also deeply reliant on them for engaging with millions of Indians, experts told CNBC.
"Instagram's growing prominence, particularly among younger users and as a platform for public discourse, reinforces Meta's dominant position in India's digital ecosystem," Rohit Kulkarni, managing director and senior analyst covering internet and capital markets at Roth Capital Partners, told CNBC.
Between July 18 and July 26, when the protests were at their height, the average daily active users on Instagram jumped 16% year-on-year to 531 million, according to Sensor Tower. During this period, Instagram's daily active users increased by 2.6%, while those for Facebook, YouTube, and WhatsApp remained largely flat.
"Content consumption" via Instagram spiked in the last couple of weeks, Ujjwal Chaudhry, a partner at Analysys Mason, told CNBC, adding that as political parties embrace the platform, it will lead to further adoption across older age groups and further cement Meta's dominance in the country.
India's internet and smartphone user base is second only to China, which more than a decade ago banned American social media and messaging apps, leading to the rise of local players such as WeChat, Weibo and Douyin. American internet giants lost complete access to hundreds of millions of users and major advertising and data revenue.
In sharp contrast, several attempts have been made by Indian entrepreneurs to create homegrown social media challengers , but they have had little success. So, the Indian market, with one of the largest youth populations, holds significant promise for U.S. big tech companies such as Meta, experts said.
Meta has "raced ahead" and "is unparalleled" when it comes to social commerce, communication, and ad targeting in India, Neil Shah, vice president of research at Counterpoint Research, told CNBC. Internet behemoth Google, on the other hand, has a strong presence in web display or Android in-app advertisements.
"The trust and credibility that influencers provide on these [Meta's] platforms carry strong weight because targeting is highly algorithmic and personalized," he said.
Greater engagement will lead to advertising growth for Meta, and Instagram has been extremely successful in attracting digital ad spends in India, experts said. But the country does not make a material contribution to Meta's top line due to lower per-user revenue as compared to North America and Europe, they added.
"India represents one of Meta's largest long-term monetization opportunities," said Kulkarni of Roth Capital, as it is "strategically" far more important to Meta today than it is financially, he said.
That makes the company vulnerable to state action, as its platforms drive tough conversations, taking on the role of online public squares of sorts that amplify anti-government voices.
Meta did not respond to CNBC's request for comments.
U.S. to see higher generic drug prices thanks to tariffs, Dr. Reddy's CEO warns U.S. President Donald ...
AIPROPX is an independent multi-source news index — we track, compare, and connect coverage from across the web into one place you won't find anywhere else.