China's TikTok app has a plan- Conquer everything | Tech News

China's TikTok app has a plan- Conquer everything

China's TikTok has logged growth that is the envy of its rivals, but this is only the start.

By:BLOOMBERG
| Updated on: Aug 22 2022, 00:02 IST
TikTok
TikTok star Jennifer Szomjas at the MTV Europe Music Awards at the Laszlo Papp Budapest Sports Arena in Budapest, Hungary. (AFP)

This month marks the one-year anniversary of the Trump administration's initial threat to ban ByteDance Ltd.-owned TikTok app, entangling the social-media platform into the unpredictable web of geopolitics. Despite the existential distraction, the short-video app has thrived over the past year. And now, with its popularity surging, TikTok, which is based in China, may be poised to achieve the goal that is the dream of every major U.S. technology company: a super-app for the Western world.

TikTok's growth and the level of its user engagement have been remarkable. According to Sensor Tower, the app was the most downloaded and highest-grossing non-game during the first half of this year, surpassing 3 billion total installs. Analysts expect TikTok to keep growing faster than its competitors, and industry tracker eMarketer projects the app's user base in the U.S. will rise 18% this year, compared with a 1% increase for Facebook Inc. and a 4% gain for Facebook's Instagram. Most impressive of all, TikTok users are growing more addicted to the short-video service. Research firm App Annie says the app has surpassed Google's YouTube for average time spent per user in the U.S. and the U.K.

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Competitors are noticing the app's rise and taking action. Last month, Facebook executive Adam Mosseri said Instagram plans to move beyond its central photo-sharing feature and embrace full-screen mobile video entertainment, citing TikTok's success. Similarly, YouTube and Snap Inc. have launched short-video services and are also paying creators directly for their content. But TikTok may be in the best position to win. Because it has the largest audience for short video and an unrivaled ability to add innovative features to the medium, there is little reason for creators to go elsewhere. And this is just the beginning.

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TikTok is expanding its ambitions. Already, the app has made several moves beyond its core of recorded video entertainment — from gaming and jobs services to live music concerts — that could presage a larger offering in each space. For example, I'm having fun playing with TikTok's experimental farming simulator mini-game on user profiles. The company's innovative TikTok Resumes, which lets people apply for positions at dozens of companies through video applications, is a good example of the company's creativity.

In many ways, TikTok's own career job site gives the biggest insight into what the app will focus on for its next big thing: live-streaming social commerce. By searching through the company's listings, I found more than 100 openings with “e-commerce” in the title and almost 90 for the word “live.” Reading through the descriptions, it's clear TikTok plans to invest aggressively to cultivate live-streaming creators in numerous categories — including fashion and beauty, lifestyle and technology — and empower them to sell merchandise directly on the platform. It's likely to be a large and lucrative opportunity.

There's a roadmap for this type of push, and it comes from TikTok's sibling app Douyin in China, also owned by ByteDance. Influencers there use the app to regularly sell millions of dollars' worth of products from their live-video streams. Think a QVC-style sales pitch, but across a limitless number of channels on TikTok.

Of course, TikTok isn't entirely free from the U.S. government's scrutiny. While the administration of President Joe Biden revoked Donald Trump-era app bans last month, it opened a review of foreign-owned apps that potentially pose a data-security risk to Americans. With the new order, TikTok may still face regulatory action. And Beijing's clampdown on U.S. public listings, following Didi Global Inc.'s controversial one, could make TikTok's eventual initial public offering more complicated.

But a public-listing delay may turn out to be beneficial for the video service. With the financial opportunity in e-commerce live-streaming — not to mention gaming and from other services — TikTok could be setting the stage for an even bigger IPO splash.

Tae Kim is a Bloomberg Opinion columnist covering technology. He previously covered technology for Barron's, following an earlier career as an equity analyst.

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First Published Date: 10 Feb, 09:24 IST
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