A Look at Tiktok from Bytedance - the one who made it in the West

Tiktok is the most recent social media phenomenon that has taken the world by storm. It currently has over 500 million monthly active users globally, and retained its No.1 position as the most downloaded app on Apple App store for the fifth consecutive quarter, beating youtube, instagram, whatsApp and Messenger. It bears a vague resemblance to Vine, the 6-second video app that was acquired by twitter and eventually shut down in 2017. 

Tiktok allows users to upload 15-second video clip built in with copious amount of filters, special effects, some of the most popular results include hilarious lip syncing and dancing to pop songs. The app has been a hit among young users both in China and overseas. For example, 60% of active users are 16-24 years old in the United States. 

Perhaps the most interesting fact is Tik Tok might very well be the only Chinese social media app that has successfully attracted a global following - not just in India, where it counted nearly half of the app stores download times first 3 month this year alone, but also in Europe and the States. WeChat, the messenger all-in-one social media app by Tencent which is almost ubiquitous across young and old in China has not succeeded in seriously penetrating markets outside of their Chinese audience. 

Bytedance, Tiktok’s maker, originally started with  ‘Douyin’, the short video app exclusively for Chinese audience. Since acquiring LA based musical.ly in 2017 and subsequently rebrand it into Tiktok and launched it on the international market, the app has made Bytedance the world’s most valuable startup at $75B valuation (!) surpassing the likes of Uber and Airbnb. The success of Bytedance led to the birth of similar apps following its trail, including Lasso from Facebook and Byte from Twitter, the latter aptly dubbed the “V2 of vine”. 

One Chinese report cited that in the past 6 months, China’s short-video apps market growth has reached 744% year on year as of end-2018. Douyin is becoming even more prevalent than online payment tools in China. It is now one of the top channels for product advertising in China, which then feed straight to e-commerce - the highest growth often comes from the lower-tier cities in China, where information channels are limited. According to Hillary Han, Director of the IResearch Training Academy speaking at TechNode’s emerge tech conference, Short video users focus on who is selling the product instead of price comparison. “If they trust the KOL, need the product and can afford it, they buy it.”

Financial Times reported recently that Bytedance is joining the fight in hardware and developing a branded smartphone. As early as Jan this year, Bytedance acquired a patent portfolio and talents from China phone maker Smartisan citing the need to “explore the education business”. Bytedance might be following the footsteps of many internet giants that tried to combined hardware and software and failed in a spectacular fashion - think HTC First (Facebook x HTC, 2013), Fire phone from Amazon, or Meitu phone from Meitu, none of which lasted the distance.

Brian Trappe is Managing Director of Axiom Technology Headhunting in Hong Kong.