Social media giant Reddit has officially entered the Indian market by registering two new entities in the country. According to sources, Reddit’s move into India is driven by its fast growing user base in the country and to comply with local laws that require social media platforms to establish a physical office in India. Records from the Ministry of Corporate Affairs (MCA) show that Reddit has registered two entities in Mumbai: Reddit Community Network India Private Limited and Reddit Technologies India Private Limited, both in July. “Only significant social media intermediaries, which Reddit is likely to be, are required to have a physical contact address in India,” said Aprajita Rana, Partner at AZB & Partners. She added that, while the law does not expressly require such entities to have a registered office in India, they are obligated to have a physical contact address & appoint India resident compliance & grievance officers, which overall makes it more practical to such entities to establish a formal presence in India. The move into India is a major milestone for the San Francisco-based tech giant, which went public earlier this year. After three years of speculation, Reddit Inc. was listed on the New York Stock Exchange in March, marking the first social media IPO since Pinterest in 2019. Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit is a content-sharing platform that allows users to post content, share links, and engage in discussions on various topics, organised into communities called ‘subreddits’. Several topics discussed on Reddit often become the basis for news reports by various news portals both in India and abroad. In an email response to FE's query, Reddit's global spokesperson said, the company does not have additional information to share at this time beyond the expansion plans disclosed in its Form S-1, the US equivalent of India's Draft Red Herring Prospectus. As per Form S-1, Reddit reported an average of 73.1 million daily active uniques (DAUs) and 267.5 million weekly active uniques (WAUs) for the three months ended December 2023. The company noted that approximately 50% of Redditors who visited the platform during this period were from outside the United States, and over 90% of all Reddit posts were made in English. “In particular, we are focused on growing Redditors in the UK, France, Spain, Germany, Brazil, and India. Our strategy to land in these markets and then grow is centered around offering users culturally relevant and location-specific content,” it added. Akshat Pande, Managing Partner at Alpha Partners, noted that any foreign company providing any services in India, whether itself or through agents or electronically, is supposed to register a place of business (branch or subsidiary) in India. This is a general requirement under the company law, therefore applies to social media companies as well providing social media services remotely. “Specifically, under the IT intermediary and digital media rules, this requirement applies to significant social media companies which means those having more than 50 lac users as per 2021 notification and gaming companies allowing users to access any permissible online real money game (irrespective of the number of users). This can be made applicable to other social media and gaming companies also by order of the Ministry in certain situations,” Pande added. Also ReadBeyond the screens: How augmented reality is shaping advertising industry Social media giants such as X (formerly Twitter) and Meta, which operates Facebook, Instagram, and WhatsApp, have established local offices in India. For the year ended 2023, Reddit reported a revenue of $804 million, with 90% coming from online advertising and the remainder from other revenue segments, including direct monetisation through user subscriptions. Follow us on Twitter, Instagram, LinkedIn, Facebook
