ByteDance Launches New Platforms/ Revenue Streams Ahead of IPO

Founded in 2012 by 29-year old software engineer Zhang Yiming, ByteDance is the world's "most valuable" unicorn, the parent company to newsfeed app Toutiao and short-video apps Douyin (in mainland China), TikTok (outside of China), TopBuzz, Flipogram, and Xigua Video, is estimated to currently be worth north of USD $73 - $78 billion.

Concerns in late 2018 about the potential impact on Bytedance's growth from Beijing's increased crackdown on digital content were justified. User metrics across the company's various platforms, in addition to those of competitors and other online news sites, aggregators, social media and content-sharing platforms and websites across China took a hit after Beijing's initiative, but not significant enough to dent ByteDance's expansion plans.

ByteDance plans to issue shares in the company on a public exchange via an IPO in the near future, and is likely awaiting the alignment of various factors and circumstances to support the company's valuation expectations. Recent signs that also point toward a pending IPO include a strong push towards new revenue streams and profitability in the near-term, in addition to the fact that the company recently issued employees pre-IPO shares at the expected IPO share price of USD $44/share.

Expanding into search and micro-platform sites targeted for mobile are recent new offerings like TouTiao Search, which delivers a combination of web-driven search results intertwined with results from the sites and platforms within ByteDance's network. Currently only optimized for mobile, TouTiao is a fast, easy-to-digest news aggregation mobile site that is designed to incorporate mobile advertising targeted to the various niche audiences engaged with and discussing specific topics.

The company has targeted technology competitors as it accelerates growth plans by hiring senior executives and staff from companies including Huawai, Google, Tencent, Baidu, and Microsoft Bing and adding staff rapidly. As the company begins to finally focus on monetizing each new offering, profitability has become the primary goal for the company as it seeks to price an IPO at the highest-possible valuation.

With more than 600+ million Monthly Active Users (MAUs), TikTok alone is a popular global app and the most popular app in the US market in 2019 with more teens aged 13 - 18 downloading and using TikTok than any other similar app or platform. Allowing users to make 15-second video clips, sound-tracked by various music clips, short-video apps online account for 9% of online time across mainland China, whereby that figure is much larger in western markets like the U.S. where it is almost double.

Douyin commands an estimated 30% market-share in China, and the company began monetizing this channel with paid ads and in-app services like virtual "coins" that users could purchase to use for various services across the app. TikTok sells virtual coins in "bundles", including 100 coins for USD $0.99 or 500 coins for USD $5.99. Across the platform, most of these coins are used as a means to compliment or show appreciation to content creators or live-streamers across the platform. Oddly, though, ByteDance/TikTok does not actively promote its virtual coins. While the company is estimated (Credit: Sensor Tower) to have grossed just USD $75 million from its virtual currency thus far, that is miniscule considering the global TikTok userbase of more than 1 billion people, according to a recent Sensor Tower study.

Most TikTok users spend an average of 52 minutes on the app everyday, and and the most popular Douyin account is Chen He with 50.7 followers, while the most popular TikTok account is the German Twin Sisters Lena & Lisa, with 31.5 million followers.

Monetizing its many channels by venturing into mobile advertising areas like native video ads to websites, targeted mobile ads, sponsorship of streams, and virtual currencies, ByteDance's expanding suite of apps, websites, and platforms that the company is building will serve it well in preparation for its pending IPO, which will mean more scrutiny into every aspect of the company than ever before. Even more importantly, Chairman Zhang Yiming needs to reinforce the priority of profitability across his team so the mindset becomes a major goal.

References:

https://www.mobilemarketer.com/news/tiktok-grosses-75m-from-virtual-currency-sales/551183/

https://www.businessofapps.com/data/tik-tok-statistics/

https://techcrunch.com/2019/08/11/bytedance-launches-a-new-search-portal-that-returns-a-mix-of-results-from-the-web-and-its-own-platforms/

https://equityzen.com/trending/bytedance/