ByteDance beyond TikTok: what is the giant’s next frontier?
TikTok has taken the world by storm, but its parent company ByteDance is less well-known. Oliver Lewis of social agency The Fifth charts its rise and onward trajectory.
The Fifth's Oliver Lewis puts TikTok (and its creators, ByteDance) in the spotlight / Solen Feyissa via Unsplash
TikTok has taken over America.
With its addictive, short-form videos, the app has become increasingly salient thanks to its incredible algorithms and cultural footprint, not to mention being the flashpoint at the center of US data privacy tribulations. But what’s next for TikTok’s parent company, ByteDance?
Behind ByteDance’s success (so far)
ByteDance has several successful apps worldwide: not just TikTok (known as Douyin in China), but video editor CapCut, and Lemon8, their newest Instagram-meets-Pinterest photo app. ByteDance has launched several other products besides, including music streaming service Resso and an education platform Genius Joy.
While TikTok remains the company’s most popular app, ByteDance has shown a willingness to diversify its offerings to maintain a competitive edge in the tech industry.
In 2020, TikTok’s average amount of time per user surpassed the time people spend on Facebook and Instagram, with users spending 38.6 minutes on TikTok, four minutes more than Facebook’s 34.6 minutes. This popularity can be largely attributed to its algorithm, which uses artificial intelligence to personalize content and create a seamless browsing experience.
TikTok has proven its ability to build community by providing continuous topic trends, information, education, support, and real-time news. It also pioneered novel capabilities, like the separated ‘For You’ and ‘Live’ pages, providing consumers with multiple ways to engage in the platform.
No tech company, no matter how much they scramble to invest in AI curation research, can seem to replicate Tiktok’s algorithmic success. As their new, unique apps rapidly expand into the market, create cultural waves and continue to influence Gen Z, smart brands will be paying attention to what’s next for ByteDance.
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Bytedance’s future: social commerce, community, and culture
ByteDance’s dominance in the market extends beyond social media; it’s also making waves in the world of commerce. For example, it introduced a single wallet and a unified link to businesses features, breaking ground on how tech can utilize social commerce.
ByteDance’s single wallet and unified business links enable users to streamline the buying process while simplifying sales for businesses. With a single wallet, users can store and access their money across ByteDance platforms, including TikTok and Lemon8, while navigating a sole payment system. Similarly, a unified link makes it easier for businesses to sell products across various ByteDance platforms, aiding audience reach and sales.
ByteDance has succeeded in leveraging its winning social algorithm to create personalized and engaged shopping experiences. Its success in social commerce has not gone unnoticed, with other industry giants looking to emulate its playbook and aesthetic. Social commerce is, and will continue to be, a key focus as ByteDance seeks to develop seamless, dynamic, and interactive social shopping experiences that drive revenue. These features are breaking ground in social commerce and give us a glimpse into what blended social and e-commerce solutions of the future will look like.
TikTok has had a massive cultural impact, particularly among younger generations who feel it has enabled their collective voice; 60% of its users are Gen Z. It has become a platform that champions creativity, community and self-expression. Promoting content based on engagement, rather than popularity, has created a user-centric culture. This allows for diverse, and sometimes niche, content to gain traction (looking at you, WaterTok).
I expect both brands and creators to build a community around more niche interests and identities as the user base grows. The company’s playbook has included inviting emerging creators to demo and provide feedback to their line of social applications. It will continue to build a robust creator program to both generate user growth and improve the quality of its products. The combination of creator engagement, proactive feedback, and a young user base has made ByteDance the emerging leader in cultural transformation.
However, ByteDance’s rapid rise in social media and e-commerce has been complicated by political concerns over data privacy and regulation. The US government lacks control over ByteDance, unlike other platforms. While ByteDance offered to resolve tensions by moving all US data to US soil, the government didn’t accept this as sufficient to withdraw their concerns, suggesting the issues are more about championing US platforms than data privacy and regulation. Montana recently pushed through the first state-wide ban of TikTok, signed by Greg Gianforte (R), to “protect Montanans’ private data and sensitive personal information from being harvested by the Chinese Communist Party.”
These challenges are compounded by technical hurdles such as competing algorithms for content sharing, data privacy, and combating malicious content, deepfakes, and bad actors on the platform. ByteDance’s continued success and dominance spell future fights with both regulators and competitors.
ByteDance remains a force to be reckoned with. As it continues to expand its reach, it will undoubtedly face challenges both from within and from US and foreign competitors. However, with its innovative app ecosystem, top-notch content delivery algorithm, and head start on social commerce, ByteDance is here to stay. Their canonical apps are poised to continue to make waves in the ad industry while creating an outsized cultural impact in the US and abroad.
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