Mr. Zhang Yiming turned ByteDance into the world's most valuable private company via a number of successful apps like TikTok. The 38-year-old AI programming genius has set his sights on Chinese e-commerce, a market worth $1.7 trillion.
Bytedance has hired thousands of employees and is partnering with the likes of Xiaomi to lead what is called the next step in commerce: selling products to consumers via short videos and live streams.
This effort will test not only Mr. Zhang with ByteDance's app creation and artificial intelligence magic, but also investors ahead of one of the most anticipated initial public offerings in the world (source Bloomberg).
Its start-up is already starting to make a sensation in an industry long controlled by Alibaba and Jack Ma's JD. In fact, Bytedance sold about $26 billion worth of cosmetics, apparel and other products in 2020, reaching in its first year what Alibaba's Taobao took six years to accomplish.
This year, Douyin (the Chinese version of TikTok) is expected to contribute more than half of the company's $40 billion in internal advertising sales, thanks in part to e-commerce. Short video platforms have so much traffic that they can pretty much run any business.
A burgeoning e-commerce business could help the company surpass its $250 billion valuation when it goes public, countering concerns over Beijing's crackdown on the country's internet giants.
While ByteDance doesn't handle sales or merchandise, it intends to sell more ads to sellers and exponentially increase platform traffic.
It should be noted, however, that the Internet giant has entered the social commerce scene in China late, where influencers advertise products to fans as a "Generation Z version of the Home Shopping Network".
The format, already introduced by Alibaba as a marketing tool in 2016, took a major turnaround last year as Covid-19 increased demand for home entertainment.
In 2020, Alibaba's Taobao Live generated over 400 billion yuan ($61 billion) in gross merchandise value, and Kuaishou Technology's social media platforms (Little Red Book) hosted 381 billion yuan ($58 billion) of transactions, more than double of Douyin.
Mr. Kang, a former Baidu engineer who was hired by ByteDance in 2017, is one of the many fast-growing young people hired by Mr. Zhang to break new ground for the company.
He was previously the technology manager of ByteDance's Helo app, one of India's most used social platforms for sharing content such as video, until the Indian government shut it down along with dozens of Chinese apps last June to national security reasons.
Since Mr. Kang took over the ecommerce section, Douyin has banned streamers from selling items listed on third-party sites and urged them to open their own stores directly in the app, preventing competitors such as Alibaba and JD. to profit from its traffic.
Customer support staff has grown from 100 to around 1.900 to combat counterfeiting and is offering an additional 900 jobs to support the company's development and the sustainability of the platform.
ByteDance also has an online matchmaking system that helps connect merchants with influencers and has created physical foundations to host live streamers and merchandise, similar to what Alibaba does.
The new frontier of live streaming commerce is a concrete fusion between social networks and e-commerce (something Facebook has not yet succeeded in). This evolution could undermine Alibaba's supremacy in the sector, the growth of Bytedance (and the Kuaishou group) seems so unstoppable that it outclasses traditional marketplaces.
Surely the traditional e-commerce platforms will not stand by and in the short term we will see a lot of news. Will something change for us too? The times are not yet ripe, but TikTok first opened a breach in the western public, it is a fact, and could act as a bridgehead for the introduction of these innovations.
Author: Alessandro Ave
On this website we use proprietary or third-party tools that store small files (cookies) on your device.
By enabling these cookies, you help us to offer you a better experience.