Chinas obsession with short videos has its internet giants worried

Take a subway ride in China and expect to see a lot of commuters’ eyes glued to TikTok videos on their phones.

Video clips like TikTok’s are now consuming nearly nine percent of Chinese people’s time online, a 5.2 percent jump from 2017, according to app analytics firm QuestMobile.

Apps such as TikTok — which is operated by ByteDance, the world’s highest valued startup at $75 billion — have become popular among previously camera-shy users. Those who lack editing experience can now easily add beautifying filters and music to spice up their work.

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Elderly couple having a moment on Douyin / Credit: Douyin ID @淘气陈奶奶

It also helps that smartphone data became cheaper and internet penetration kept growing in recent years — China now has 800 million smartphone users, according to government data. In 2013, just under 40 percent of China’s online population streamed videos on their phones, according to database CBNData. In 2017, that ratio surged to 80 percent.

Initially geared towards Chinese youth, short-video apps have increased in popularity across all age groups – including the elderly. Over a third of the country’s 1.4 billion people are active on these apps every month. People above the age of 50 now spend as much as 50 minutes on them every day, compared to only 17 minutes a year ago.

And TikTok, called Douyin in China, is spearheading the short-video game.

Tencent’s nerves

In recent years, few mobile apps in China have captured as many stares as WeChat, Tencent’s messaging app that’s evolved into a one-stop platform allowing people to shop, order cabs, book hotels, and complete other daily tasks.

Then short video apps came along, eating people’s eyeball time away. Apps like TikTok do not compete directly with WeChat as they serve different purposes, but data suggests that use of instant messaging services has waned amid the fledgling video scene.

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This year WeChat and its peers occupied 30.5 percent of people’s online time, a 3.6 percent drop year-over-year per the QuestMobile report.

It comes as no surprise that Tencent is fretting over the clip craze and in particular, ByteDance’s rise. In May, Tencent’s usually low-profile boss Pony Ma got in a rare online spat with ByteDance founder and CEO Zhang Yiming over plagiarism and WeChat blocking TikTok content.

Typical miming and finger dancing performed by teens / Credit: Douyin ID @李雨霏2007

Elsewhere, Tencent took action. Since April, the tech giant has rolled out a number of TikTok rivals but so far none has gotten close to the latter’s lion’s share: 500 million monthly active users worldwide. That’s excluding the 100 million total users on Musical.ly, which ByteDance acquired in late 2017 and merged into TikTok this August.

Tencent’s got other backup plans, though. It owns shares in TikTok’s China archrival Kuaishou, which had a 22.7 percent penetration rate in September according to data service provider Jiguang. That’s however, dwarfed by TikTok’s 33.8 percent, which means the app was installed on over a third of all mobile devices monitored by Jiguang. Plus, ByteDance’s other short-video apps for different niches, Huoshan and Xigua, are also faring well, commanding 13.1 percent and 12.6 percent, respectively.

Alibaba: not quite an ally

Until recently, ByteDance appeared to be making nice with China’s other internet giant — Alibaba. The companies kicked off a partnership in March that saw TikTok using Alibaba’s online marketplace Taobao to process ecommerce transactions on its app. Authorized TikTok users, usually those with a big following, can link videos to their Taobao shops. This money-making setup allows TikTok to lure more quality content creators. Alibaba, on the other hand, gets traffic from the fledgling social media app that could absorb some of the loss from WeChat blocking its ecommerce apps.

Things can go south anytime, however, as ByteDance makes forays into Alibaba’s territories. The startup recently introduced an ecommerce platform and entered the business of long-form video streaming, an area where Alibaba, Tencent, and Baidu’s iQIYI dominate.

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Life hacks are popular, too: guy sharing his gardening tips / Credit: Douyin ID @速效三元化合肥

ByteDance seems set to grow independently. Unlike many of China’s promising startups, six-year-old ByteDance hasn’t accepted financing from any of the tech trio of Baidu, Alibaba, and Tencent — known as the BAT such is their dominance in China’s consumer technology.

ByteDance’s moves into new space may also signal the firm’s urge to explore additional monetization channels besides advertising on feeds. It lifted its revenue target to $7.2 billion for 2018, well above the $2.5 billion it earned last year, according to Bloomberg.

At home and afar

Despite the boom, China’s short-video market faces increasing regulatory headwinds. In recent months, authorities have been clamping down on Kuaishou, ByteDance’s video apps, and smaller players on account of eradicating content that’s deemed illegal or inappropriate.

Violation could result in app store bans and those that underwent such severe punishment like Miaopai, which is backed by China’s Twitter equivalent Weibo, suffered from a tumble in app installs.

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Sometimes Douyin does get serious – a Beijing TV channel has its own account and it covers news here / Credit: Douyin ID @BTV新闻

ByteDance didn’t get a ban – yet, but it came under fire for its AI-driven recommendation algorithms. It’s something the startup prides itself on but has irritated media watchdogs who reprimanded TikTok for showing users “unacceptable” content, such as videos depicting adolescent pregnancies. ByteDance’s popular news aggregator Jinri Toutiao, or “today’s headlines,” received similar criticisms for giving its 120 million daily users “fluff”.

In response, ByteDance added thousands of censors to screen content on top of AI-driven recommendation across its apps.

ByteDance’s expanding territory through TikTok goes well beyond China. This year, the short-video platform has been climbing app store rankings around the world, an ascend accelerated by its incorporation of Musical.ly. Now it’s not just Tencent that’s taking note; Facebook is also building a TikTok clone, TechCrunch reported recently.

Original Article : HERE ; This post was curated & posted using : RealSpecific

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