? It's about time

The social media landscape has primarily been captured by two major players - Facebook and Snapchat. At one point, these companies seemed unshakable, but Gen-Z are unpredictable. 

In the dawn of dropping popularity of Facebook and the relative stagnation of Snapchat and Instagram’s features, TikTok rapidly grew into the go-to platform for “creative” purposes. The app owned by the world's largest startup ByteDance (valued at > $100bn) is set to make changes in the world technological ecosystem. 

Nothing started as we see it today. Two techies from China, Alex Zhu and Louis Yang, developed an application that had a novelty value and an easy to use video creation interface called Musical.ly (remember that?). After gaining traction mainly in the US, the app became the go to place for lip-syncing and generation of other short bursts of videos for the Gen-Z. 

In the wake of these events, Chinese Start-up ByteDance, in a period of 200 days, developed an app called Douyin in China and TikTok internationally. With its greater library of content creation tools and novelty factor, it boasted exponential growth by the end of 2017. Looking at the growing market, TikTok acquired Musical.ly for about $1bn. This was the start of the rise of an empire of about 800mn active users worldwide. 

Source: Visual Capitalist

To grow, ByteDance flooded the market. In 2018 and 2019, the company spent $3mn/day; they reportedly spent $300mn on Google Ads alone. Their strategy to bust out helped them grow quickly. 

What makes it unique?

ByteDance has done a great job at diversifying from music videos into a spectrum of other sources - dance, fashion, food and much more. The wide spectrum of content being generated by users in their youth makes the app lucrative. Relative to YouTube, a video being a few seconds long, penetration of videos is much higher because a user ends up watching upto 100s of videos in one session, making it swifty. 

Not only that, TikTok has got “video creation” to your phone. An industry known to only specialists, ByteDance have made the process of editing a video creative and easy, which makes the user feel empowered and in control.  

Another aspect that got TikTok ahead is its “mobile only” approach where it developed a UI suitable for phones and having relatively optimized the screen better for the user.

Also, the stickiness of the byte-size content created on TikTok, the users watch more than 100 videos per session which gives creators a room to upload more than 1 video per day.  YouTube, its closest rival, is a hard market to break into with complex tools.

In TikTok’s case, the Artificial Intelligence IS the product as users are shown hyper focused changing algorithmically evaluating videos every time, which makes it an anti-social social media as well. 

Privacy

Chinese driven apps do come with their fair share of privacy issues. With the Chinese government being very strong on companies in terms of data moderation and collection, several governments (especially Donald Trump) fear that the app is being used to mine data for the Communist Party. 

To combat this, they appointed a new CEO for TikTok - Kevin Mayer, who was the former head of streaming at Disney. With so many teens putting so much visual data in the hands of a Chinese company, regulatory bodies are trying to step in as the ties between Washington and Bejieng sour. 

India and Indonesia have already placed bans on the app for a period due to its illicit content and lack of moderation which is worrisome for a visual graphic based media platform.

Being the driving force for new trends, people say that the app is growing a so called “fame lust” and also has negative and unhealthy content, not fit for the target demographic. 

Influencer marketing

With a cult-like following, the top hitters on the app are nearly worshipped and closely followed. This is the point where brands cannot ignore the app. With growing revenues and partnerships, there are several verticals to move into. Brands are paying famous content creators to advertise, similar to Instagram, just more hyper focused. 

Advertising to a specific demographic gives brands a better penetration into the target market. With growing popularity, we have to see how big can the market get to target GenZ. 

Here to stay? 

You might be thinking that this is a single hit period for the application and might soon fade? To get an honest answer, TikTok has created its own subculture which empowers the user giving them the creative freedom to express in no way like before. 

Fun Fact: TikTok has more active users compared to Facebook and Instagram despite being appealing to a narrower audience. 

Using TikTok as leverage, they are expanding into new forrays -  Longer form videos (v/s YouTube), Music Streaming (with its app Resso - mixing the AI of TikTok and Spotify with spirit of Youtube), Gaming (multiplayer gaming in the app), Consumer Finance (FinTech is the holy grail for tech companies), Education (AI First learning with bots), Messaging, News Feed (compete with Facebook and Twitter directly), Enterprise Software (called Feishu), Cloud Computing (opened data centres in India and US already, might monetize), Phone (running on AI based ByteDance OS), Search Engine (v/s Google), Ecommerce integrations, it just never ends...

With heavy integrations and addictive features, TikTok has become the elixir for several teenagers. Will this be a phase, or it is here to stay, we can't say. But, there is one thing for sure, it is impossible to ignore the meteoric rise of TikTok.