HONG KONG - TikTok has gone viral. Millions of bored people trapped at home are hooked on the video app for the latest dance moves and more. Owner ByteDance is getting a goldmine of user data and a bigger audience for a follow-up hit. But the unprecedented global success for a Chinese startup comes with uncharted risks.
ByteDance’s first big hit was news aggregator Toutiao, which became a magnet for advertisers in China. But the real success story is TikTok, the social network that lets users share short video-clips of themselves singing, dancing and goofing around. The app has been downloaded roughly 2 billion times, according to research outfit SensorTower - a level of global success even Chinese tech titans Alibaba and Tencent haven’t achieved. The Beijing-based company founded by Zhang Yiming is now the world’s most valuable startup, after backers including SoftBank invested at a $75 billion valuation two years ago.
Quarantines and lockdowns have made TikTok’s global appeal all the more lasting. Canadian rapper Drake’s latest dance challenge has racked up nearly 70 million videos in a week; even Jane Fonda, now 82 years old, is posting new workout clips. In February, it was the world’s most popular non-game app, with downloads nearly doubling year-on-year to a record 113 million, SensorTower reckons.
ByteDance isn’t immune to the Covid-19 pandemic. It makes most of its money from advertising, which typically gets cut in a downturn. But a huge trove of user data will at the very least help the company understand what makes non-Chinese netizens tick. ByteDance has over 20 apps and is already mulling its next global hit. New ventures include music-streaming, video games, office-collaboration tools, online education and more.
But with greater success comes greater scrutiny. The U.S. government has launched a probe into TikTok’s data collection practices, Reuters reported in November. The company has defended itself by saying data is stored locally and denies allegations it censors content Beijing dislikes. Regulatory scrutiny in other fast-growing markets like India could impede ByteDance’s expansion.
Still, the company’s popular apps at home have already put Alibaba and Tencent on the defensive. Managing regulators and lawmakers abroad will be its next test.
- China’s ByteDance, which owns short-video app TikTok, on March 12 named a new leadership team for its China operations. It also announced that founder and chief executive Zhang Yiming will focus on the company’s global expansion and new initiatives such as education.
- Zhang will focus on leading and developing ByteDance's global strategy as its global CEO, the company said in a statement. He will also focus on building out ByteDance’s global management team.
- “The rapid growth ByteDance has achieved over the past eight years is a testament to the dedication of all our employees, a global team we expect to number 100,000 by the end of the year,” Zhang said in a statement.
- ByteDance had more than 60,000 employees in 30 countries and regions at the end of 2019.
(Editing by Robyn Mak and Sharon Lam)
© Reuters News 2020