Cameron Priest — November 13, 2018 — November 13, 2018
Bytedance is one of China’s fastest growing tech startup.
Founded in 2012, the company controls a suite of popular apps to curate articles, videos, and other non-text-based content.
Under the banner of Bytedance is Toutiao, its flagship product, which acts as a one-stop shop for aggregated Chinese news primarily. Its unique selling proposition is gathering stories from thousands of outlets and using artificial intelligence to personalize content according to the individual users’ interests. Alongside Toutiao is Douyin — also known as TikTok, a social media app for sharing and creating live videos.
Altogether the company boasts 620 million active users with a total net worth of over $ 20 billion.
That may sound marginal to Western ears, but Bytedance is currently raising another $ 2.5 to $ 3 billion that would push its value from $ 70 to $ 75 billion. If successful, those numbers would make it the world’s highest-valued startup, roughly $ 20 billion more than Didi Chuxing, over $ 10 billion more than Uber, and double what Facebook was worth at its six-year mark.
On Oct 15th, Bytedance unleashed another major step forward: Zhidian, an ecommerce app whose name translates as “value point” in English. Similar to how content flows to users of Toutiao, the new app combines information, social engagement, and commerce.
While the majority of Bytedance’s users are based in Asia, the recent acquisitions of Musical.ly, Live.me, News Republic, Daily Hunter, and U.S. video app, Flipagram, mean the company is diversifying its portfolio and making its way West.
What this means for brands and businesses in the west: Where social media in the West has struggled to gain a foothold into in-network, “native” ecommerce and instead have remained dependent on advertising to drive revenue, China has married the two brilliantly.
Looking at current social-media trends, the pulse of the market indicates a hunger for more customization and relevance.
Late last year, Bloomberg reported the startup was paying as much as $ 3 million in annual compensation to recruit top talent for that purpose.
Over and against Facebook, Bytedance’s edge lies in the fact that it analyzes text, images, and videos using natural language processing and computer-vision technology. The company then applies large-scale machine learning to automatically serve users with the content that aligns with their likes, interests, and previous consumption habits.
While Facebook, Instagram, and — to a lesser degree — Twitter also use machine learning to serve content to users, their models rely more on existing social connections rather than the tastes of individual users.
Toutiao, for instance, opens with a stream of posts, ranging from traditional news reports to inspirational or cute videos. The more someone clicks, the more Toutiao learns and refines each user’s feed. The result is a personalized, extensive, and high-quality content feed created specifically for the user each time they open the app.
Not to be outdone on the creation side, “Douyin,” explains Michael K. Spencer, a futurist at Medium’s Hacker Noon, “is nothing short of the next era of Stories after Instagram.”
Even though Bytedance is facing similar data breach issues at home in China, in June 2018, the company unveiled a series of measures for better user protection, which include enhanced privacy settings, parental controls, and a risk-warning system.
Regulatory issues and the deterioration of trust remain prominent concerns for both Facebook and Bytedance, users will incline towards the platform that regains their trust and reinforces user privacy, provides security, demonstrates transparency, and comes across as honest and not manipulative in the minds of their target audience, all while providing smart, customized solutions tailored to the audience’s personal needs.
As players like Bytedance emerge to challenge mega-marketplace like Alibaba, forward-thinking brands should not only look to find creative ways of entering those markets but also begin anticipating similar mergers of social media and commerce in the near future.
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