TikTok: startup you may never heard of

Anticipation has long been building concerning the impending takeover of the tech world by Chinese digital giants like Alibaba, Tencent, Baidu, and JD. Efforts up to now, however, have been mostly disappointing. The foremost popular messaging app in the West is WhatsApp, not WeChat; people use PayPal, not Alipay, for digital payments; Google dominates the search market, not Baidu.

Indeed, Google, Facebook, Instagram, Snap, Spotify, and Amazon, have barely noticed the competitive impact of their Chinese equivalents. Whereas China has found great success in world hardware markets, they have had much less success with software system. That is, until now.

You may not have heard of it, however TikTok became one among 2018’s most downloaded mobile apps for Apple and android devices within the U.S.A. and Europe, unseating the likes of YouTube, Instagram, and Snapchat. TikTok has already been downloaded over 80m times in the U.S.A., logging 4m downloads from the App Store in October alone. It’s additionally one of the most popular apps on Google Play.

TikTok is a video sharing platform with a twist. Videos may be no longer than fifteen seconds and they are based on varied themes: music, cooking, travel, dance, fashion, and so on. Users produce these short videos, use easy tools to add music and special effects, and share them on the site. The most well-liked clips are high on entertainment value, with a premium on instant gratification. Kind of like vine, which shut down in 2016, TikTok can be thought of as a video version of Instagram or Snapchat.

TikTok comes from China, but, apparently, it’s not owned by one of the Chinese tech giants. Despite huge investments in video platforms by the likes of Alibaba, Tencent, and Baidu, none of them dominates this area. TikTok – best-known locally as Douyin – was launched in 2016 by ByteDance, a Beijing-based tech company traditionally focused on news. Its news app, called Toutiao, uses advanced AI algorithms that learn user preferences, and then provides customized news feeds. Bytedance uses the identical algorithms to provide relevant video feeds to TikTok users.

By the beginning of 2017, Douyin had become China’s most well-liked mobile video app. In November of the same year, ByteDance spent US$1 billion to acquire a competing video sharing website called Musical.ly. Whereas Musical.ly was also founded in China, most of its users were based mostly in the U.S.A. The combined global reach of TikTok and Musical.ly made for a powerful combination.

While many social media applications concentrate on world consistency and reach, TikTok centered on targeting specific local audiences. As an example, in Japan, TikTok collaborated with a large artist management company to drive traffic from YouTube and Instagram using watermarked TikTok videos created by local celebrities. It additionally ran a series of dancing and music campaigns centered on overcoming shyness, a problem for many teenagers in Japan.

Challenges are one of the key components of TikTok. These are video skits that get acted out on masse, with people making numerous responses to a popular meme. A recent one involved gummy bears singing an Adele song, which got 1.7m likes on TikTok, went viral on Twitter and spawned various spinoffs.

By the end of 2018, TikTok had over a half-billion active users (more than twitter) – around 40th of them outside China. It’s no surprise that the Chinese giants are closely learning TikTok’s booming approach of easy design, active promotion, attention to different locales, and focused acquisition, with an eye to understanding and emulating the magic formula for succeeding in world markets.

Tencent is already making a bet on the short-video streaming business by investing in Kuaishou, TikTok’s main local challenger, and reportedly giving out subsidies value nearly US$500m to promote its own platform Weishi. The giants of the West are also paying attention, with Facebook quietly launching a TikTok another competitive app known as Lasso in November 2018.

Meanwhile, Bytedance recently completed a brand new round of funding led by major tech investor SoftBank. This valued the company behind TikTok at US$75 billion, making it the world’s most valuable startup, higher even than Uber.

Bytedance cannot rest on its laurels, however, if it needs TikTok to build on its position as the 1st globally successful “made in China” app. TikTok will need to massively expand from its base, whereas staving off attacks from well-funded and ambitious Chinese and world competitors. Building a successful app is one thing. But, as Snapchat’s fall from grace shows, sustaining that success is a completely more difficult endeavor.

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