A uniquely Chinese strategy is helping Zynn take on TikTok

In May, Chinese short-video company Kuaishou quietly launched Zynn, a new app that looks and functions like ByteDance-owned TikTok.

In less than a month, the app topped the charts in US app stores, surpassing TikTok thanks to an aggressive reward scheme that uses cash to draw in new users. While the customer acquisition tactic is uniquely Chinese, it’s now making its way to other markets as Chinese apps gain more ground overseas.

Easy cash

Kuaishou, China’s second-largest social-video app with 300 million daily active users, has followed rival ByteDance’s footsteps to the US market with the dramatic launch of Zynn.

Developed by Kuaishou-owned 3D imaging company Owlii, the app and its release show that Chinese social media companies are prepared to spend big as they bring their rivalry to the West.

Image credit: Zynn

There are three ways that users can earn rewards on Zynn: signing up, referring friends, and simply watching content.

The platform’s referral program, for instance, rewards US$20 to users who invite a friend to use the app, with an additional US$10 for every five friends they recruit thereafter. This means that if users can get 50 people to sign up, they receive a cash reward of up to US$1,100.

On top of that, the app has a reward system that gives out points to users for viewing content, which they can then exchange for cash or gift cards. With no limit to how much they can earn, some users have reportedly pocketed thousands of dollars from the app in just a few weeks.

While such systems are common in other apps, these tend to reward credits that can only be spent on the platform. China’s twist on this concept is that users get to cash out and spend the money however they like.

A slew of short-video platforms in China already employ similar user acquisition schemes. For example, Tencent’s short-video app Weishi offers up to 88 yuan (US$12) if a user watches videos for seven consecutive days, while Baidu’s short-video app Haokan also has a gamified cash reward system.

It can be cheaper to pay people to join the app than pay for media placements.

This approach is steeped in Chinese culture – giving friends and family members bright red envelopes stuffed with money is a tradition that often symbolizes good luck. In China, giving out virtual red packets is a common feature in mobile payments, food delivery, bike-sharing, and social media apps as well.

Tech behemoths like Tencent and Alibaba, for instance, have digitized and gamified this experience in apps like WeChat and Alipay.

Indeed, paying users has proven to be an effective tactic to make a splash in a new market like the US not only because “free” money is irresistible, but also because companies rewarding users with cash is a novelty. This undoubtedly helps Zynn stand out and proves that localization is not always the go-to strategy when it comes to international expansion.

Drawbacks

Cash outs, cashbacks, and subsidies