Bytedance: The empire expands

China’s hottest new startup isn’t slowing down.

TikTok maker Bytedance, now with 1.5 billion active users across more than a dozen apps and a valuation of US$75 billion, is expanding its global realm to include new areas that put it on a collision course with companies like Silicon Valley’s Slack and China’s Alibaba.

During the course of the year, Bytedance has rolled out a WeChat challenger named Flipchat, a Snapchat-style app called Duoshan, an online tutoring service (Gogokid), a self-improvement study app (Haohao Xuexi), a workplace chat app (Lark/Feishu), a real estate listings app (Xingfuli), and a Chinese web search engine.

Bytedance founder Zhang Yiming (left) with Apple boss Tim Cook / Photo credit: 36Kr

These new offerings have added to its already substantial internet empire that covers not just TikTok but also a host of popular social, media, and entertainment apps such as Toutiao, Buzzvideo, and Topbuzz.

On top of all that, the giant startup is developing its first gadget – a phone – while also secretly working on a plan to build mobile games.

Founded in 2012, Beijing-based Bytedance is sustained by a total of US$4.3 billion raised from investors. No financial data is publicly available, although Chinese tech media reports that the firm is looking to double its revenue in 2019 to US$14 billion.

Diversification

All the new apps and services mean Bytedance is stepping on the toes of more and more Chinese tech giants.

Bytedance’s office messaging app Lark “looks like Dingding, which was developed by Alibaba,” analyst Ke Yan tells Tech in Asia.

“We don’t think there are big changes in terms of strategy,” says Ke, co-head of research at Aequitas Research who publishes on Smartkarma, referring to the startup’s launch of subscription-based services rather than free apps. Rather, Bytedance is simply trying out new, fast-growing sectors, namely, online education and enterprise software.

Nonetheless, the paid-for services insulate it against a rising threat. “I think the biggest challenge is the growth deceleration of ad spending in China,” says Ke. That’s what all Bytedance’s free apps – so reliant on advertising (and therefore on the economy not slowing down) – are susceptible to.

“The growth of mobile internet ad spending slowed to mid-10 percent, from mid-20s a year ago. This poses a great challenge to Bytedance’s [US$14 billion revenue] target in 2019,” he adds.

Photo credit: TikTok

New confrontations