The Bytedance Report 2019 by TechNode

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The content of this report was first published in our In Focus: Bytedance Bi-weekly Newsletter for all our TechNode Squared members as part of the exclusive membership benefits. We will continue to develop specialized vertical newsletter as we go so be sure to subscribe to our membership program and be the first to obtain insightful analysis as such.

By becoming our member, you will also get to add your voice to the first tech journalism network in China and be immersed with everything tech in China. Visit https://technode.com/become-a-member/ to learn more!


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JUNE<br />

<strong>2019</strong><br />

THE<br />


REPORT<br />

P R E S E N T E D B Y<br />

Bailey Hu and Tony Xu, tech reporters<br />

Alberto Sperindio, Newsletter Editor

INDEX<br />


2<br />

Background<br />




APP<br />




IN<br />


WHO<br />

3<br />

6<br />

23<br />

26<br />

28<br />

29<br />

<strong>The</strong> content of this report was first<br />

published in our In Focus: <strong>Bytedance</strong><br />

Bi-weekly Newsletter for all our<br />

<strong>TechNode</strong> Squared members as part<br />

of the exclusive membership benefits.<br />

We will continue to develop specialized<br />

vertical newsletter as we go so be sure<br />

to subscribe to our membership<br />

program and be the first to obtain<br />

insightful analysis as such.<br />


32<br />

By becoming our member, you will also<br />

get to add your voice to the first tech<br />

journalism network in China and be<br />

immersed with everything tech in<br />

China. Scan the QR code above to<br />

learn more!<br />


31<br />


HU<br />

BAILEY<br />

<strong>Report</strong>er<br />

Tech<br />

XU<br />

TONY<br />

<strong>Report</strong>er<br />

Tech<br />



Editor<br />

Newsletter<br />

MEET<br />

THE<br />

TEAM<br />

<strong>Bytedance</strong> is the most valuable<br />

startup in the world. <strong>Report</strong>edly<br />

worth $75 billion, the company is<br />

moving rapidly to take its place—if it<br />

hasn’t already—among China’s tech<br />

establishment.<br />

But it remains relatively mysterious.<br />

Founder Zhang Yiming gives media<br />

interviews only rarely and while<br />

<strong>Bytedance</strong>’s flagship news<br />

aggregator Jinri Toutiao has been<br />

around since 2012, the success of<br />

offerings like TikTok (Douyin in China)<br />

is much newer.<br />

To shed some light on this recently<br />

minted and extremely trending tech<br />

titan, we have designed the world's<br />

first <strong>Bytedance</strong>-focused newsletter.<br />


poach; they’re paid more than the industry average in<br />



On April 4, <strong>The</strong> Information compiled a series of<br />

statistics on <strong>Bytedance</strong>’s 40,000-strong workforce<br />

and company structure.<br />

In 2018, it turns out, the company’s headcount<br />

doubled to exceed that of Facebook. In addition,<br />

<strong>Bytedance</strong> employees are reportedly difficult to<br />

China, one Didi executive told <strong>The</strong> Information.<br />

Ad sales and content monitoring staff each make up a<br />

quarter of <strong>Bytedance</strong>'s workforce.<br />


Liu Jiehao, an analyst at research group iMedia, told<br />

<strong>TechNode</strong> that <strong>Bytedance</strong>’s massive workforce makes sense<br />

given its current priorities. “<strong>The</strong> pursuit of revenue and<br />

valuation will be greater than the pursuit of profit” as the<br />

company gears up for a much-anticipated IPO," Liu said.<br />

As a result, while other Chinese internet tech enterprises face<br />

layoffs and restructuring, <strong>Bytedance</strong> is still seeing “rapid<br />

growth.”<br />

Liu points out that while <strong>Bytedance</strong> now employs more<br />

people than Facebook, average productivity still lags well<br />

behind the US titan. Despite a troubled year, Facebook pulled<br />

in $55 billion in earnings in 2018 while <strong>Bytedance</strong> barely<br />

made its roughly $7.4 billion revenue goal, Bloomberg<br />

reported.<br />

Tencent, which employed 54,000 people as of last December,<br />

fell between the two in terms of 2018 revenue (measured in<br />

billions of dollars).<br />


“When <strong>Bytedance</strong>’s growth enters the mature stage, it<br />

needs to pay more attention to input-output ratio and<br />

generation of actual profit,” Liu said.<br />

But retaining thousands of content-monitoring personnel,<br />

at least for the time being, may be a necessity. “Artificial<br />

intelligence technology can reduce pressure for<br />

monitoring to a certain extent,” Liu said, but humans are<br />

still needed to check for vulgar and potentially harmful<br />

content across <strong>Bytedance</strong>’s still-growing ecosystem of<br />

apps.<br />


APP<br />


FaceU<br />

A look at <strong>Bytedance</strong>’s<br />

lesser-known apps<br />

Duoshan<br />

Beside the most known apps, the<br />

<strong>Bytedance</strong>’s app ecosystem counts a<br />

good amount of lesser-known<br />

Tomato Novel<br />

glance may not be directly linked to<br />

it.<br />

services and applications that a first<br />

Lark/Feishu<br />


Content: Selfies, photo-editing<br />

#11 in Photo & Video/Free<br />

Ranking:<br />

Store, May 7)<br />

(App<br />

Released: September 2014<br />

FaceU<br />

Type: Free (in-app purchases)<br />

Similar to: Meitu, MakeupPlus<br />

(MAU as of December 2018, in thousands. (Image credit: QuestMobile, Infogram)<br />

FaceU, acquired <strong>by</strong> <strong>Bytedance</strong>-owned Toutiao in February 2018, is the most popular of the<br />

company’s three photo-editing apps.<br />

If you didn’t already know that <strong>Bytedance</strong> had multiple photo-editing apps, you could be<br />

excused; after all, their combined footprint—89 million monthly active users (MAU)* in December<br />

2018, assuming each user is unique—was only 15% of the company’s estimated total MAU,<br />

according to QuestMobile.<br />

By contrast, Toutiao alone had 240 million MAU, while Douyin had 426 million MAU the same<br />

month.<br />

*All figures for app users in China only.<br />


Before being snapped up <strong>by</strong> Toutiao, FaceU had completed three rounds of funding, closing a<br />

Series C in October 2017 worth $50 million, according to Crunchbase.<br />

Based on stats from app intelligence firm Qimai, FaceU has generally remained in the top 10 of<br />

the Apple App Store’s free “Photo & Video” category since early 2016. Since being acquired <strong>by</strong><br />

<strong>Bytedance</strong>, it has mostly retained that status, although its ranking in the overall free app category<br />

has seen more volatility.<br />

FaceU is currently linked to <strong>Bytedance</strong>’s relatively new video-social app Duoshan, which<br />

launched in January <strong>2019</strong>. <strong>The</strong> interfaces are similar (see below), and Duoshan users can directly<br />

log into FaceU using their accounts, as well as send pictures to Duoshan contacts. However, the<br />

reverse is not true. Photo- or video-snappers on Duoshan aren’t directed to FaceU’s enhancement<br />

interface—potentially a lost opportunity for user acquisition.<br />

Left: Upon startup, FaceU users are prompted to log in using Duoshan.<br />

<strong>The</strong> interfaces of FaceU (center) and Duoshan (right) also look similar.<br />

(Image credit: <strong>TechNode</strong>/Bailey Hu)<br />


Type: Free<br />

Content: Social, short videos<br />

#15 in Social/Free (App Store,<br />

Ranking:<br />

7) May<br />

Released: January <strong>2019</strong><br />

DuoShan<br />

Similar to: WeChat, Snapchat<br />

Douyin (left) and Duoshan (right). (Image credit: Douyin, Duoshan)<br />

You may remember Duoshan from a post-launch surge in media coverage which spun it as a potential<br />

“WeChat-killer,” a claim that <strong>TechNode</strong> editor-in-chief John Artman doesn’t buy. <strong>The</strong> app, whose name<br />

can be literally translated as “very shiny,” combines a private messaging function with Douyin’s<br />

trademark short-video format.<br />


Since then, however, the hype has died down to a dull roar, as Baidu’s search index shows.<br />

Over the last two months, in fact, search volume for FaceU’s Chinese name exceeds that for<br />

Duoshan.<br />

Searches for Duoshan (blue) and FaceU (green) in <strong>2019</strong> to date, followed <strong>by</strong> search volume in<br />

April and May. (Image credit: Baidu)<br />


FaceU has also had relatively more downloads in the last few months compared with<br />

Duoshan, according to Qimai. Although the photo-enhancement application may be seen as<br />

an attempt to support Duoshan, it’s evident that FaceU has a more stable following.<br />

Estimated downloads of FaceU (top) and Duoshan (bottom) since Jan. 21, when Duoshan<br />

launched. (Image credit: Qimai)<br />


Finally, although Duoshan’s rankings are still relatively high in the free social app<br />

category in Apple’s App Store, in recent months it has dropped to the #10-20 range<br />

after consistently ranking in the top five from February through early March.<br />

It seems that WeChat needn’t check its rearview mirror just yet, although Tencent’s<br />

social titan is making moves towards more short-video content.<br />

Since its launch, Duoshan’s overall ranking in the free app category has steadily declined. (Image credit: Qimai)<br />


#2 in Books/Free (App Store,<br />

Rankings:<br />

7) May<br />

Released: January <strong>2019</strong><br />

Tomato<br />

Type: Free (ads)<br />

Novel<br />

Content: Books<br />

Similar to: WeChat Read, Midu<br />

Tomato Novel is not among the 13 apps listed on <strong>Bytedance</strong>’s official website. Its cluttered<br />

user interface isn’t nearly as polished as that of Douyin or Duoshan.<br />

In the categories tab, a sharp divide exists between genres targeted toward men (“gaming novels,”<br />

“science fiction”) and women (“modern romance”). (Image credit: Tomato Novel)<br />


Nevertheless, in March, Chinese media outlet Jiemian linked Tomato Novel back to<br />

<strong>Bytedance</strong>, sparking speculation about the new reading app.<br />

Jiemian noted a marked resemblance to Midu, a product launched <strong>by</strong> Toutiao<br />

competitor Qutoutiao. Tomato Novel's logo also looks similar to that of WeChat Read,<br />

Tencent’s reading app from 2015.<br />

Unlike WeChat Read, however, which promises an ad-free experience and a limited<br />

amount of free content, Tomato Novel appears to actually be paying users to stay inapp.<br />

<strong>The</strong> icon at the center of the bottom navigation bar is literally labeled “Benefits.”<br />

Users who click in are offered monetary rewards for accomplishing tasks, such as<br />

reading for five, 30, or 60 minutes a day.<br />

<strong>The</strong> app’s homepage (left) offers different categories of recommended content. Users receive cash<br />

gifts and rewards for performing different app-related activities (center), and can opt to watch a video<br />

for 30 minutes of ad-free reading (right).<br />


All content is free, although image and video ads are liberally scattered throughout<br />

the books, disrupting the reading experience. For that reason, as we previously<br />

reported, Tomato Novel has received a fair number of negative reviews from users.<br />

Readers have also complained about low-quality content.<br />

However, no doubt thanks largely to its compensation scheme, Tomato Novel has<br />

remained ranked among the top five free apps in the Books category in Apple’s App<br />

Store since March, according to Qimai. As of May 7, its average rating across Apple and<br />

Android stores was a solid 3.6 out of 5 stars.<br />

Since late March,Tomato Novel has consistently ranked highly in the App Store’s Books category for<br />

free apps. (Image credit: Qimai)<br />


Type: Free<br />

#170 in Business, Apple App<br />

Ranking:<br />

(May 21)<br />

Store<br />

Released: Jul. 2018<br />

Lark/<br />

Feishu<br />

Content: Work/productivity<br />

Feishu and its international version Lark were originally created as a productivity platform for<br />

<strong>Bytedance</strong> employees. Last July, the company debuted the app on the ic and Android stores.<br />

However, it’s still not completely public; while anyone can download either version, work<br />

teams must apply to use the app. Lark’s functions also overlap with a few major platforms on<br />

the Chinese market.<br />

Competitor: DingTalk<br />

Among free productivity apps, Feishu’s biggest competitor is Alibaba’s DingTalk. <strong>The</strong><br />

platform does occasionally garner complaints from employee-users but its reach is<br />

undeniable. According to the official website, 7 million enterprises use DingTalk.<br />

Last year, DingTalk reported that it had more than 400 million individual users. <strong>The</strong> platform consistently<br />

ranks at the top of the “free” category of the Apple China App Store’s business category.<br />


Feishu’s layout for basic work group chats, as well as the organization and nature of its<br />

features, resemble those of DingTalk—with a few exceptions.<br />

Rankings in the Apple App Store’s “Business” category as of May 21 (Image credit: Qimai)<br />

Feishu’s layout for basic work group chats, as well as the organization and nature of its<br />

features, resemble those of DingTalk—with a few exceptions.<br />

Feishu (left) and DingTalk (right)<br />

are similar in appearance. Feishu<br />

has a few additional features,<br />

including an option to poll<br />

coworkers in chats and to create<br />

group-wide multimedia<br />

“announcements.”<br />


However, it lacks one of DingTalk’s most useful and also most controversial features<br />

—an option to track employees’ GPS locations in order to keep them accountable.<br />

In fact, DingTalk offers enterprises an entire suite of built-in optional services, from<br />

online reimbursement to in-app business trip booking. For now at least, Lark only<br />

has the option for enterprises to build their own apps—with sample features<br />

including a punch in/out button, a “bug tracker” for collaborative projects, and job<br />

application submission forms.<br />

Lark offers a sample image of an app that individual businesses can choose to integrate into their platform.<br />

(Image credit: Lark)<br />


Competitor: WeChat Work<br />

While relatively high-ranking in the Apple China App Store’s “Business” category,<br />

WeChat Work hasn’t achieved DingTalk’s scale. Earlier this month, Tencent said the<br />

three-year-old app had 1.5 million companies registered in its ecosystem, compared to<br />

Alibaba’s self-reported 7 million.<br />

It does offer options for employees to apply for business trips and reimbursement,<br />

similar to DingTalk. When clicking into tabs such as “approval,” the resulting interface<br />

loads as a mini-program, with a slight lag time.<br />

WeChat Work’s main advantage is its connection to its more social counterpart. Upon<br />

download, users are given the option to log in using WeChat accounts and to<br />

automatically connect with existing friends. <strong>The</strong>y can also link an enterprise account to<br />

WeChat, using the work application to chat directly across apps.<br />

<strong>The</strong> app’s overall design remains somewhat clunky, however, and it’s missing some of<br />

the functionality of DingTalk. Perhaps for that reason, its ratings across Apple and<br />

Android app stores (3.7) are close to a full point lower than those of both DingTalk (4.5)<br />

and Feishu (4.5), according to Qimai.<br />

In order to apply for<br />

reimbursement, users<br />

must enter a miniprogram<br />

interface to<br />

find an online form.<br />

(Image credit:<br />

WeChat Work)<br />


Competitor: Google Docs/Shimo<br />

An introduction to Lark’s version of Docs. (Image credit: Lark)<br />

One of Lark and Feishu’s more interesting features is a collaborative document platform<br />

that seems specifically tailored for tech enterprises. <strong>The</strong> interface appears to be a blend of<br />

Google Docs, WordPress, and popular Chinese doc-sharing platform Shimo.<br />

It’s an interesting alternative to both DingTalk and Enterprise WeChat, which offer users<br />

cloud storage space to share documents. Rather than creating files separately and<br />

uploading them to be shared, Lark users can choose to collaborate directly on documents,<br />

spreadsheets, and even coding blocks.<br />


Additional features of Feishu’s answer to Google Docs (Image credit: Lark)<br />

Not only does that intersect with the coverage of Shimo and Tencent Docs—a Google Docs<br />

lookalike launched last April—but it also creates a potential rivalry with GitHub, which is<br />

massively popular in China and currently partnering with Ping’an Cloud on enterprise<br />

services.<br />

Other features<br />

On the international version Lark, hints of cross-platform partnerships are evident. In the<br />

“Announcements” section of group chats, users can embed YouTube and TikTok videos as<br />

well as files from productivity platform AirTable. <strong>The</strong>y can also add bots from Slack-like site<br />

Trello into group chats, although this feature has no discernable functionality yet.<br />

<strong>The</strong> integration of features from popular Western platforms could presage partnerships—<br />

and potentially big plans—for <strong>Bytedance</strong>’s first workplace app.<br />


New products<br />

<strong>TechNode</strong>: “Released via a Singapore-headquartered subsidiary, Lark Technologies is an<br />

online collaborative platform that combines three functions: calendar, documents, and<br />

chat.”<br />

Lark has been <strong>Bytedance</strong>’s internal communication and collaboration platform since<br />

November 2018. Its launch marks a push for a larger share of the Slack-dominated<br />

productivity market. Although features such as slideshows and video conferencing aren’t<br />

yet available, <strong>Bytedance</strong> will reportedly increase the app’s team size to 1,000 <strong>by</strong> the end<br />

of <strong>2019</strong>. In addition, <strong>Bytedance</strong> acquired cloud-based productivity tool Mubu in 2018, 36Kr<br />

reported a few days before Lark’s launch.<br />

Jiemian: <strong>Bytedance</strong> has released the reading app “Fanqie Xiaoshuo,” or “Tomato Novel,”<br />

which offers a wide array of free online novels but shows an ad every three pages or so.<br />

<strong>The</strong> app has received bad reviews for frequent ads and low-quality content, but still ranks<br />

third among the free reading offerings on Apple’s China App Store as of April 9, beating<br />

Tencent’s WeChat Read<br />

Finally, <strong>Bytedance</strong> plans to launch a K-12 online education platform <strong>by</strong> summer <strong>2019</strong>,<br />

36Kr reported. <strong>The</strong> new platform could put to use its experience from two existing, notso-successful<br />

<strong>Bytedance</strong> education products (aiKID and Gogokid) to become a major<br />

player.<br />

It’s also good at picking winners<br />

<strong>Bytedance</strong>’s hits aren’t due just to a user-friendly approach. Last year, the company<br />

snapped up American short video app Musical.ly—with its 100 million monthly active<br />

users—and combined it with TikTok to solidify its standing in Western markets.<br />

CNN: “Musical.ly shot to popularity after its 2014 launch. Its predominantly young user<br />

base was drawn to the way the app allowed them to post short clips of themselves lipsyncing<br />

to popular songs.”<br />


OUTLINE:<br />







Rather than creating content, <strong>Bytedance</strong> focuses<br />

on curating it. It has invested heavily in AI<br />

technology in order to keep a lead over<br />

competitors.<br />

Forbes: <strong>Bytedance</strong>’s “success can be attributed in<br />

large part to the artificial intelligence and<br />

machine learning algorithms that deliver<br />

customized content feeds to its users.”<br />

Synced: Last August “US chipmaker Intel and<br />

Chinese tech pioneer <strong>Bytedance</strong> announced they<br />

will collaborate on setting up an AI research lab,<br />

talent training, and development of AI<br />

applications.”<br />




01<br />

Exponential growth<br />

Since its first valuation at $10 million in<br />

July 2012, <strong>Bytedance</strong>'s value has soared.<br />

<strong>The</strong> last few years—marked <strong>by</strong><br />

Douyin/TikTok's launch (2016) and the<br />

acquisition of Musical.ly (2017)—have seen<br />

particularly rapid growth. Two rounds of<br />

Series D in 2017 nearly doubled the<br />

company's valuation.<br />

02<br />

Fighting for attention<br />

<strong>Bytedance</strong>'s first hit was news app Jinri<br />

Toutiao. Here's how it compares to similar<br />

offerings in China's mobile market, based on<br />

monthly active user (MAU) count in<br />

December 2018. (Do-it-all app WeChat, in<br />

comparison, reached over 1 billion MAU.)<br />


03<br />

Short video offering<br />

In addition to its hit Douyin, <strong>Bytedance</strong><br />

has also spun off Xigua Video and Vigo<br />

Video, whose small-town users overlap<br />

more with Toutiao's audience. In terms<br />

of MAU in December 2018, here's how<br />

they measured up to each other as<br />

well as competitor Kuaishou. Together,<br />

the four apps dominate the short<br />

video sphere in China.<br />

TikTok around the world<br />

04<br />

<strong>The</strong> top 10 countries where TikTok, the<br />

international version of Douyin, was<br />

downloaded last year are spread out<br />

geographically. India led with 119.3<br />

million downloads, while no other<br />

country surpassed 40 million.<br />

<strong>Bytedance</strong> also had big losses<br />

<strong>The</strong> Information: “Last year, after the costly launch of its video app TikTok outside of<br />

China, the company lost $1.2 billion.”<br />

As with its user engagement figures, TikTok’s retention rate has not been stunning.<br />

With user time already occupied <strong>by</strong> apps with longer histories and high rates of<br />

engagement, TikTok will find it trickier to retain users in overseas markets the way<br />

Douyin did in China. Losses could further expand in <strong>2019</strong> as <strong>Bytedance</strong> steps up<br />

marketing efforts for TikTok and other apps targeting overseas markets.<br />

05<br />



Legal disputes<br />

<strong>Bytedance</strong> has been involved in several lawsuits since its inception, mainly in China but,<br />

recently, facing troubles globally also. While they may have an impact on their reputation,<br />

<strong>Bytedance</strong> has been able to cope with them every time they rose.<br />

Ongoing legal disputes<br />

<strong>TechNode</strong>: “Tianjin Binhai New Area People’s Court issued a ruling on Wednesday to stop<br />

<strong>Bytedance</strong> from using user information taken from WeChat and QQ on two of its apps.”<br />

<strong>Bytedance</strong> and Tencent engaged in some acrimonious exchanges on Mar. 24, taking turns<br />

calling each other's claims “nonsense.” After the ruling came out, <strong>Bytedance</strong> said it respected<br />

the ruling but had requested a review. Meanwhile, Tencent seems to have made progress in<br />

efforts to curb—if not stifle—the growth of Douyin and chat app Duoshan. Prior to this case,<br />

Tencent had banned links from Douyin and Duoshan on WeChat and stopped users from<br />

registering accounts for <strong>Bytedance</strong> apps using WeChat.<br />

Another court ruling on a similar issue was made on Mar. 12, this time in favor of an individual<br />

plaintiff. However, <strong>Bytedance</strong> said that it had not been notified of the ruling and only learned<br />

about it in news reports.<br />

Techweb (our translation): “If the report from Yicai [the media outlet that broke the news] is<br />

real, then the court didn’t follow the basic legal procedures and jumped to the ruling.<br />

Normally, courts aren’t so rash,” said Li Liang, vice president of <strong>Bytedance</strong>.<br />

BiaNews: On March 27, in a Jinri Toutiao post, <strong>Bytedance</strong> vice president Li Liang shared a<br />

screenshot of a court ruling that orders Baidu to apologize and compensate Li for at least one<br />

slanderous online article.<br />

Li’s case could help <strong>Bytedance</strong> gain an upper hand in future disputes. Baidu, however, doesn’t<br />

seem to be complying. <strong>The</strong> search giant was ordered to apologize to Li in a “conspicuously”<br />

placed online announcement within 10 days of the ruling, but so far <strong>TechNode</strong> has found no<br />

such posts.<br />

Bloomberg: “<strong>The</strong> three biggest record labels are demanding more money for songs played on<br />

TikTok and its Chinese counterpart Douyin, setting up a showdown with the hugely popular<br />

video apps, people with knowledge of the matter said.”<br />

Seeing the potential of the two apps, Universal Music, Sony Music, and Warner Music are<br />

asking for a larger share of the pie. As Douyin and TikTok are highly dependent on music,<br />

<strong>Bytedance</strong> is unlikely to accept the demands in full. In addition, TikTok still lags far behind its<br />

Chinese counterpart in terms of profitability.<br />



<strong>The</strong> $5.7 million settlement is TikTok’s highest fine yet<br />

—and perhaps the biggest push yet to comply with<br />

regulations. Children under 13 will be restricted to an<br />

ecosystem where they can only watch video content<br />

specifically curated for their age group.<br />

While the update is certainly an improvement, it<br />

seems to only resolve a legal dispute rather than the<br />

core issue. Young users can easily <strong>by</strong>pass the<br />

restrictions <strong>by</strong> entering false birth dates.<br />

Who <strong>Bytedance</strong> is suing<br />

According to media reports, <strong>Bytedance</strong> and Tencent<br />

have a storied rivalry. That's reflected in the more than<br />

70 lawsuits that Beijing <strong>Bytedance</strong> Technology has<br />

filed from 2015 to <strong>2019</strong>: Tencent has featured in 27% of<br />

cases brought against companies.<br />

<strong>TechNode</strong>: “Tech giants Baidu and <strong>Bytedance</strong> on<br />

Friday filed lawsuits against each other for unfair<br />

competition, with both companies seeking RMB 90<br />

million (around $13 million) in damages and extended<br />

public apologies.”<br />

Baidu claimed that <strong>Bytedance</strong> stole the results from<br />

their search engine for use in news aggregator Toutiao,<br />

and <strong>Bytedance</strong> accused Baidu of directly using<br />

popular videos from Douyin in a product named<br />

“Simple Search.” Although the two companies have<br />

been exchanging lawsuits for some time, their<br />

previous demands have never reached this scale. As<br />

the rivalry between the two companies becomes more<br />

direct due to overlapping features in their products,<br />

Baidu and <strong>Bytedance</strong> could see increased legal<br />

disputes in the future.<br />

<strong>The</strong> Verge: “TikTok will no longer allow children under<br />

13 to upload videos, leave comments, build a profile, or<br />

send messages, after a settlement with the Federal<br />

Trade Commission today required the company to<br />

come into compliance with a federal children’s privacy<br />

law.”<br />

CNET: "We know that a significant amount of children<br />

are being contacted via popular live-streaming apps,<br />

such as TikTok, <strong>by</strong> abusers who are using them as a<br />

hunting ground,” said a spokesperson for the National<br />

Society for the Prevention of Cruelty to Children<br />

(NSPCC) in late February.<br />

More recently, in China Douyin attempted to address<br />

similar problems with a new “youth mode.”<br />

On Mar. 4, EEO reports (in Chinese), Douyin launched a<br />

new version with a “youth mode” that limits underage<br />

users to viewing educational content such as videos on<br />

painting and photography. <strong>The</strong> mode, which can be<br />

turned on and off <strong>by</strong> parents, also blocks the default<br />

search feature and cash gift function for content<br />

producers.<br />

Just as with TikTok, however, there’s no way of making<br />

the mode mandatory.<br />

BBC: “Video-sharing app TikTok is failing to suspend<br />

the accounts of people sending sexual messages to<br />

teenagers and children, a BBC investigation has<br />

found.”<br />

Online predators have been a longstanding issue for<br />

TikTok, and <strong>Bytedance</strong> has repeatedly pledged to<br />

address it. <strong>The</strong> app, however, still lacks mandatory<br />

verification methods to prevent young children from<br />

using it. That’s true even in the US, where the app<br />

significantly restricted the access of users under the<br />

age of 13 after reaching a $5.7 million settlement deal<br />

with the Federal Trade Commission.<br />

In light of the lingering predatory behaviors on TikTok<br />

alone, <strong>Bytedance</strong>’s 10,000 content monitors may still<br />

not be enough.<br />


IN DEPTH<br />

IN INDIA<br />

How <strong>Bytedance</strong> pursued localization<br />

to a fault<br />

Following in the footsteps of<br />

smartphone brands like Xiaomi and<br />

Oppo, Chinese apps saw surging<br />

adoption rates in India last year. In<br />

2018, according to a report <strong>by</strong><br />

Sensor Tower, 44 of the country’s<br />

top 100 Android apps were Chinese.<br />

That places it on par with Indian news app<br />

ShareChat, which launched in 2015 and has in<br />

fact sued Helo for copying its interface.<br />

ShareChat’s investors include both Xiaomi and<br />

Beijing VC firm Shunwei Capital, which led a $99<br />

million Series C for the startup in September.<br />

According to data from Sensor Tower, here’s how<br />

downloads of Helo, ShareChat, and smaller<br />

competitor Dailyhunt (of which <strong>Bytedance</strong>’s<br />

Toutiao is a minority stakeholder) on Google Play<br />

compared in March.<br />

Among those, <strong>Bytedance</strong>’s short-video apps<br />

TikTok and local-language news curation<br />

platform Helo were standouts. In addition, the<br />

company has launched another short-video app<br />

in India: Vigo Video.<br />

<strong>The</strong> company supports “lite” versions of all of the<br />

above in India, reflecting the demand for lowbandwidth<br />

editions of apps in emerging<br />

markets.<br />

Helo in particular shows <strong>Bytedance</strong>’s attempts to<br />

localize in India. Launched in June 2018 to cater<br />

to the country’s large local-language user base,<br />

which outnumbers its English-language<br />

audience, the app is available in 14 languages.<br />



Downloads do not necessarily reflect ongoing<br />

use of the app; in December, ShareChat<br />

reported 40 million monthly active users<br />

compared to Helo’s 25 million. However, it<br />

seems clear that Helo is ahead in the race to<br />

acquire new users, not least because of<br />

significant spending on promotion.<br />

While falling far short of its Chinese version,<br />

Douyin, in terms of overall adoption, TikTok’s rate<br />

of growth in India (60%) surpassed even Douyin’s<br />

spurt of popularity in the last months of 2018<br />

(25%).<br />

DAU growth for Douyin and TikTok (millions)<br />

That could be a cause of concern for authorities.<br />

Last November, a Hindustan Times report<br />

pointed out prominent and potentially<br />

inflammatory fake news reports on both Helo<br />

and ShareChat.<br />

As hundreds of millions of Indians proceed to<br />

cast their votes for the <strong>2019</strong> general elections,<br />

Facebook has already come under scrutiny for<br />

not doing enough to stop false reports and hate<br />

speech, in part because its moderation system<br />

targets mainly English content. In 2018,<br />

according to the tracker of the Indian nonprofit<br />

Software Law and Freedom Center, the country<br />

saw 134 internet shutdowns, some of which<br />

included temporary regional bans on Facebook<br />

and other online services. Many were imposed<br />

in order to “curb violence and unrest in conflictridden<br />

areas,” according to official explanations.<br />

While Helo seeks to gain users and edge out<br />

competitors like ShareChat, it’s unclear whether<br />

the company is spending equal effort on<br />

monitoring its multilingual content.<br />

That leads us back to TikTok, whose fate is<br />

currently being considered in court (see below<br />

for details).<br />

In addition to harboring potential problems,<br />

TikTok’s rapidly growing profile makes it a prime<br />

target for a crackdown. As of the end of last year,<br />

it reported 20 million daily active users (DAU),<br />

significant growth from October, when the<br />

company claimed 12.5 million daily active users.<br />


Legal dispute in India<br />

Reuters: “An Indian court’s call for a ban on the popular<br />

video app TikTok will hurt free speech rights, China’s<br />

<strong>Bytedance</strong> Technology Co has said in a request for the<br />

Supreme Court to quash the directive. ”<br />

This is the first time that <strong>Bytedance</strong>’s legal strategy in<br />

India has been revealed. <strong>The</strong> company was already<br />

under fire for spreading harmful content on TikTok, but<br />

in recent months judicial action has intensified.<br />

<strong>Bytedance</strong>’s request was later rejected, indicating that<br />

the country is not likely to give a pass to <strong>Bytedance</strong>’s<br />

inadequate content filters.<br />

<strong>TechNode</strong>: “‘At TikTok, we have faith in the Indian<br />

Judicial system and the stipulations afforded to social<br />

media platforms <strong>by</strong> the Information Technology<br />

(Intermediaries Guidelines) Rules, 2011,’ the company<br />

said in a statement issued to <strong>TechNode</strong>.”<br />

As legal efforts to ban TikTok gained momentum,<br />

<strong>Bytedance</strong> made some gestures of goodwill, stating<br />

that it removed 6 million noncompliant videos. But this<br />

gesture might not be enough for Indian regulators,<br />

who seem to have lost confidence in the app<br />

maintaining a healthy content ecosystem.<br />

<strong>TechNode</strong>: TikTok was removed from Google Play and<br />

Apple’s App Store hours after an Indian state court<br />

rejected <strong>Bytedance</strong>’s request to stay a ban on the app.<br />

With Android and iOS devices comprising around 80%<br />

of market share in India, the takedown could severely<br />

impact TikTok’s performance in its largest market.<br />

Android users can get around the restriction <strong>by</strong> simply<br />

downloading installation files from other sources, but<br />

the extra step required could significantly slow user<br />

acquisition.<br />

Reuters: “India’s ban on popular Chinese video app<br />

TikTok is resulting in ‘financial losses’ of up to $500,000<br />

a day for its developer, Beijing <strong>Bytedance</strong> Technology<br />

Co, and has put more than 250 jobs at risk, the<br />

company said in a court filing seen <strong>by</strong> Reuters. ”<br />

Good and bad news<br />

SCMP: “An Indian state court on Wednesday moved to<br />

lift a ban on popular video app TikTok in the country,<br />

two lawyers involved in the case said, in a boost for its<br />

developer Beijing <strong>Bytedance</strong> Technology Co.”<br />

While it suffered losses of up to $500,000 a day during<br />

the ban, <strong>Bytedance</strong> convinced the court to reverse its<br />

decision to remove its viral short video app from Apple<br />

and Google’s app stores just two weeks after it went<br />

into effect. While TikTok did not immediately return to<br />

the two app stores, the state court’s decision has put<br />

an end—or, at least, a pause—to legal efforts to ban the<br />

app, which had been gaining momentum in the past<br />

few months.<br />

<strong>TechNode</strong>: TikTok became available on Apple’s App<br />

Store and Google Play after a two-week ban, which<br />

cost the company 15 million first-time users in India.<br />

TikTok came back with a vengeance, surging back to<br />

the top of Google Play’s free app charts just a week<br />

after its reinstatement. <strong>The</strong> app has been encouraging<br />

users to spread the word of its return, offering cash<br />

prizes of $1,445 to three users per day for half a month.<br />

While TikTok still needs to comply with the Indian state<br />

court’s decision to implement stricter content filters,<br />

its return to the Indian market—where it has 120<br />

million users—is undoubtedly good news for the<br />

company.<br />

Business Standard: Social media platform Helo has<br />

removed about 160,000 accounts and 5 million posts<br />

from its platform over the last 10 months which were in<br />

violation of the app’s community guidelines.<br />

Helo, <strong>Bytedance</strong>’s local-language news app in India,<br />

has been under fire since late last year for spreading<br />

pornographic content and encouraging predatory<br />

behavior. <strong>Bytedance</strong>’s decision to make content on<br />

Helo more compliant could be an effort to prevent<br />

legal disputes similar to those involving TikTok.<br />


To access Xingtu, however, Liu had to agree to not<br />

publish any of his Douyin content on other platforms.<br />

“With Douyin and other apps, the difference is that on<br />

Douyin the content can grow viewers more quickly.<br />

<strong>The</strong>re is more content and categories of content. To<br />

put it another way, there are more users …”<br />

Video stars:<br />

Getting deep with a Douyin celebrity<br />

Douyin influencers Liu Qikun, left, and Liu Yicun (no<br />

relation), pictured here in March, are known online as<br />

Uncle Beibei and Dao Muxiong. Together, they film<br />

short comedy videos in Beijing. (Image credit:<br />

<strong>TechNode</strong>/Cassidy McDonald)<br />

“About half a year after I encountered Douyin, I quit my<br />

banking job and came to Beijing to make short<br />

videos.”<br />

In 2018 Liu Qikun left Hulun Buir, Inner Mongolia to<br />

pursue a career as a Douyin star.<br />

Like many short-video celebrities, Liu participates in<br />

the app’s video challenges to gain followers. In his first<br />

hit, he lip-synced Keith Ape’s “It G Ma.” After reaching 1<br />

million fans, Liu began receiving invitations from<br />

Douyin to attend offline events with other influencers<br />

and to partner with potential advertisers. Now, two<br />

years after that first video, he has nearly 3 million<br />

followers.<br />

Through “Xingtu” or “Star Tour,” Douyin’s official<br />

commercial platform for influencers that launched last<br />

year, Liu receives and manages offers from companies.<br />

In addition, Liu says, <strong>Bytedance</strong> staff introduced him to<br />

advertising opportunities with car information app<br />

Dongchedi, which operates under the company’s Jinri<br />

Toutiao brand.<br />

Nevertheless, Liu considers his full-time Douyin-based<br />

career to be relatively rare. He’s also noticed a<br />

significant drop in his income from videos over the last<br />

year or so. Due to the growing number of influencers,<br />

individual celebrities now earn less on average, he said.<br />

In August, Liu began working in the talent<br />

management department of a multi-channel network<br />

(MCN), which matches influencers with companies<br />

that seek their services. He advises Douyin celebrities<br />

with followings of 1 million to 10 million on how to<br />

shape their content and attract more advertising gigs.<br />

In Liu’s opinion, the lifespan of an average “panentertainment”<br />

influencer without a specialty—such as<br />

makeup tutorials, for instance—is only six or seven<br />

months. “Audiences will suffer aesthetic fatigue,” he<br />

told <strong>TechNode</strong>. Liu himself switches up his style every<br />

three months or so based on trends; his repertoire<br />

includes slapstick humor, imitations of children, as well<br />

as scripted/subtitled stories, all 15 seconds or less.<br />

“If you haven’t put out a major hit for a long time, they<br />

might forget about you.”<br />

At the MCN where Liu works, influencers often take on<br />

other internet tech-related employment or treat the<br />

app as a hob<strong>by</strong>.<br />

Still, Liu believes that Douyin’s business is a<br />

“sustainable thing, as long as the internet is around.”<br />

Just like YouTube elsewhere in the world, Douyin and<br />

similar platforms are bringing influencers and<br />

audience members closer together.<br />

“Before, you wouldn’t see what other people’s lives are<br />

like, but now you can see it on your phone.”<br />




TikTok (US)<br />

TikTok has six different privacy policies based on user<br />

location: Germany, the rest of the EU, India, Russia, the<br />

US, and other countries. Within the US, privacy<br />

policies are further divided up between 13 years and<br />

older users and those under 13.<br />

<strong>The</strong> variation among policies reflects the varied<br />

implementation of data protection regulations across<br />

the world, including the US Federal Trade<br />

Commission’s (FTC) historic $5.7 million legal victory<br />

against TikTok for violating child privacy protections.<br />

To reflect this new reality, the US version of TikTok’s<br />

privacy policy was split and updated this past<br />

February. <strong>The</strong> new US privacy policy states: “If we<br />

become aware that personal information has been<br />

collected on the Platform from a person under the<br />

age of 13 we will delete this information and terminate<br />

the person’s account.”<br />

Videos and user profiles of under-13 users can no<br />

longer be viewed publicly; nor are those users allowed<br />

to message others in-app, although some personal,<br />

geographic, and “general user data” is collected <strong>by</strong><br />

TikTok. Minors in the state of California can request to<br />

have all their personal content removed from the<br />

platform.<br />

As we’ve pointed out before, however, there are no<br />

binding in-app measures to prevent underage users<br />

from simply lying about their age.<br />

Due in part to these reasons, TikTok scored only 35<br />

points out of 100 (“use with caution”) on the<br />

evaluation of its privacy performance <strong>by</strong> the nonprofit<br />

Common Sense Media. In the “Compliance: following<br />

statutory laws and regulations” category of the report,<br />

TikTok rated only 17. By comparison, Instagram scored<br />

an all-around 39, and also received a 39 for<br />

compliance with regulations.<br />

“It is no secret that tech companies are illegally and<br />

knowingly collecting personal information from<br />

children,” said Common Sense Media CEO Jim Steyer<br />

in a February statement shared with <strong>TechNode</strong>.<br />

Referring to the popular video app that <strong>Bytedance</strong><br />

acquired in November 2017 and merged with TikTok<br />

last August, Steyer said: “Musical.ly wasn’t the first<br />

company and they won’t be the last, which is why we<br />

need the FTC to continue to regularly enforce the<br />

Children’s Online Privacy Protection Act and hold<br />

companies accountable in a big way.”<br />

In a May editorial on Quartz, media design professor<br />

and data privacy activist David Carroll points out<br />

another major issue with the US version of TikTok.<br />

Before the February update, an older edition of its<br />

privacy policy stated that data belonging to<br />

international users could be shared with “any<br />

member of affiliate of our group, in China.”<br />

<strong>The</strong> new version doesn’t clarify whether this is still the<br />

case; in response to Carroll’s inquiry, <strong>Bytedance</strong><br />

representatives said that US user data is not stored in<br />

China and cannot currently be accessed <strong>by</strong> the<br />

Chinese government, but didn’t confirm the same for<br />

data collected before February <strong>2019</strong>.<br />


Douyin (China)<br />

Douyin’s privacy policy is similar to TikTok’s US edition<br />

in many respects. For instance, the app states that<br />

with user consent, it may collect personal information,<br />

contacts, video content, and information from<br />

connected third-party social network accounts.<br />

Regarding young users, however, the policy, which<br />

hasn’t been updated since October, has much less<br />

clearly delineated regulations.<br />

Some 8,900 Chinese characters into the text of the<br />

terms, the platform states that users under 18 “should<br />

read and agree to this privacy policy” under the<br />

guidance of their parents or guardians.<br />

<strong>The</strong> policy then states it will protect underage user<br />

information in accordance with domestic law, and will<br />

share and use their data only as permitted <strong>by</strong><br />

regulations, parents, or guardians, seemingly placing<br />

all three on the same level. <strong>The</strong> platform continues <strong>by</strong><br />

saying that “if we find” that minors’ data has been<br />

collected without parental/guardian consent, they will<br />

try to delete the information as soon as possible.<br />

<strong>The</strong> rest of the policy also contains repeated mentions<br />

of “relevant laws and regulations.”<br />

Similarly: “When you use the identity authentication<br />

feature provided <strong>by</strong> ‘Douyin’ software and related<br />

services, we will protect your sensitive personal<br />

information in accordance with the relevant laws and<br />

regulations and/or the requirements of the identity<br />

authentication feature (for example: Sesame<br />

authentication).”<br />

Personal information will not be shared without<br />

consent except in some cases. <strong>The</strong>se exceptions<br />

include national security, national defense, public<br />

safety and health, the “greater public interest,”<br />

criminal cases, and the broad category of “other<br />

circumstances prescribed <strong>by</strong> laws and regulations.”<br />

Under the “canceling your account” section, the policy<br />

states that “we will delete all of your account<br />

information or anonymize relevant information,<br />

except as otherwise stipulated <strong>by</strong> laws and<br />

regulations.”<br />

In case it wasn’t abundantly clear that user data is<br />

subject to China law alone, the terms also stipulate:<br />

“We will store personal information collected and<br />

created in the course of domestic operations in the<br />

People’s Republic of China, and will not transfer the<br />

above information abroad.”<br />

Douyin has a live-streaming component, and livestreamers<br />

are required <strong>by</strong> Chinese law to<br />

authenticate their identities. <strong>The</strong> app’s privacy policy<br />

states that Douyin may collect users’ real names, ID<br />

card numbers, and phone numbers. Later on, the<br />

policy clarifies that users can have most of their data<br />

deleted with the possible exception of real-name<br />

information; users can, however, still email<br />

feedback@douyin.com to request to have it modified.<br />


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