In a short span of time, short-video app TikTok, developed by the Chinese company Bytedance, has become one of the most successful apps developed by a Chinese company. Its success is important as it marks the beginning of Chinese tech companies influencing global consumers. Riding on the wave of mobile internet brought on by the wide adoption of smartphones as well as the rapid economic growth in the past decade, a cohort of Chinese tech companies like Bytedance, Meituan, Didi, etc. emerged. While these companies achieved great success in China, few have found global success like Bytedance has with TikTok.
Although it seems like an overnight success, the story of TikTok is anything but that. The short-video app concept first emerged with Vine back in 2012. Vine subsequently closed down. It was only in 2016 when Chinese short-video apps such as Kuaishou and Douyin launched, that interest revived in the concept. Seeing the huge success of Douyin in China, Bytedance expanded into the international market in September 2017 by launching the international version of Douyin – TikTok. By January 2018, TikTok was the top free mobile app in several countries.
So what made TikTok so successful? There are two main reasons. First of all, before launching TikTok, its Chinese variant short video app Douyin in China has already gained wide popularity and proven to be a successful product locally. Bytedance carried its experience from Douyin into TikTok. Secondly, Bytedance acquired a competing video sharing site called Musical.ly, which has the majority of its userbase in the US. By acquiring Musical.ly, it was able to expand its userbase for TikTok quickly.
Despite Bytedance’s initial success in overseas markets with products such as TikTok, there are still many uncertainties in terms of expansion in international markets.
The current target markets for TikTok are where Internet use is already quite mature and competitive. People are used to apps and services like Facebook and Instagram. The ones that are using TikTok are usually in their teens. This is very different from Douyin’s broader user age group in China. The younger user base can hinder TikTok’s monetization opportunities.
There are also regulatory challenges that Bytedance faces in international markets. The fact that the laws and regulations are different in each region creates additional operational challenges. The US Federal Trade Commission fined TikTok for children’s data in February. The app was also was pulled from app stores in India, briefly, in April for inappropriate content.
Attracting talents to create good content is essential to gaining more users for apps like TikTok. While quality content creation is abundant in China, it is a challenge for the overseas market. Only with a good content ecosystem will it be able to expand its growth.
Despite the challenges, TikTok has shown the ability of the new wave of Chinese tech companies to cultivate a new concept. We are even beginning to see global tech companies replicating successful ideas of their Chinese counterparts, such as short video, super apps and new concepts in e-commerce. Nonetheless, the number of Chinese tech companies capable of producing world-class, high-quality products with global reach is still much smaller compared to the West. Thus, while TikTok’s success gives hope for more global successes from China, catching up with the West in terms of app development will take time.
