"My data on TikTok these past two days is particularly amazing. I just posted a picture of noodle machine, and the foreigners all ask me where to buy it." Xiaoxiao, a former internet marketing practitioner, usually likes to record herself and her foreign boyfriend on Douyin like a Vlog. Under the situation that the production of explosive content has formed a set pattern and team battles, this type of likes and views are always very few, mostly from mutual friends. But she got dozens of traffic and attention on on TikTok.
"TikTok may be a good opportunity to develop short video. The Chinese market is now saturated, there are thousands of MCN institutions, and the competition is particularly fierce," she said.
It continues to grow rapidly despite suspicion from the U.S. as more people look for ways to keep themselves entertained amid the coronavirus pandemic. Data from Sensor Tower, a data company, shows that in February 2020, TikTok's downloads and in-app revenue reached a record high, with nearly 113 million installs and $ 50.4 million in in-app revenue worldwide, and its cumulative global downloads have reached 19 100 million, approaching 2 billion. Among them, India, Brazil and the United States contributed the top three downloads respectively. India accounted for 46.6 million, accounting for 41.3%, Brazil accounted for 9.7 million, a year-on-year increase of 992.6%, and the United States accounted for 6.4 million, from 1.5% to 8.6%. For this traffic market that has not been fully matured and commercialized, some Chinese MCN, cross-border e-commerce and marketing companies are ready to enter the market.
In addition, a person familiar with the matter said that Tiger Global Fund buy a share in ByteDance, and its valuation reached 100 billion US dollars. It has entered the countdown to the IPO. Whether it is to the US stock IPO depends on the attitude of the U.S. regulators towards TikTok. New competitors are on the stage: the new short video platform Quibi, which combines short plays, short variety shows, short documentaries, and short news, has recently been launched, and is considered to compete with TikTok directly.
The fastest growing application in the world: the outbreak and risk of TikTok
The predecessor of TikTok was Musical.ly, a short music video application founded by a team in Shanghai. It once reached the top of the App Store overall list in 2015. It is regarded as an application comparable to Snapchat and Instagram, which has considerable potential in the young market. In 2016, the company received 100 million US dollars of C round of financing, with a valuation of about 500 million US dollars. At the end of 2019, the number of registered users reached more than 200 million. The founder Yang Luyu set a strategy of "entering the US and global markets and returning to China." However, it missed the first opportunity in the Chinese market.
Zhang Yiming, the headliner of Toutiao who once said at the Wuzhen Internet Conference in 2017 that "globalization will be one of Toutiao's core strategies". Toutiao's strategy has been quite aggressive in its globalization. In 2015, it launched Toutiao's overseas version TopBuzz, and the following year, it launched TopBuzz Video and invested Dailyhunt in India. And it also took a stake BABE in Indonesia, acquired the US short video application Flipagram in 2017, and launched the overseas version of Huoshan video. In November 2017, it acquired News Republic, a French news operation service owned by Cheetah, and invested live. Me with a high price of 1 billion US dollars. It defeated Kuaishou to complete the acquisition of Musical.ly, and merged it with the previously launched Douyin International Edition in Japan, South Korea and Southeast Asia, and renamed it TikTok.
In the overseas markets dominated by the three major social giants Facebook, Instagram, Snapchat, TikTok emerged with an unexpected speed, especially in 2019. It was in the application list download top 3 in three quarters. At the same time, Facebook launched Lasso, Reels, Clips and other short video applications or functions to suppress TikTok but with little success. Affected by the economic and demographic structure, emerging markets such as Brazil, Russia and India have exhibited a faster growth rate than developed markets in Europe and America.
Douyin and TikTok's audit team and product data are independent, and their operations are completely localized, so they also present completely different content characteristics in each country.
TikTok is also the place where many people can become overnight fame. It changed the overseas music industry model, and the platform reshaped the music production cycle, popular preferences and content trends. For example, after "Old Town Road" became popular, singer LilNasX signed with Columbia Records to release the first EP. TikTok launched the "TikTok Spotlight" musician program in Japan and Korea last April. Therefore, it is normal for ByteDance to enter the music industry - Bloomberg once reported that ByteDance plans to launch its music streaming service in the Indian market.
Local policy supervision risks have become a major obstacle to going overseas. Because of its background, content supervision, local laws and other factors, TikTok had frequent frictions with various government departments overseas, and was briefly blocked in Indonesia in 2018. In 2019, the US Federal Trade Commission (FTC) sued TikTok for illegally collecting children Information, the Indian courts and the Department of Electronic Communications requested a ban. In January 2020, the US Army banned officers and men from using TikTok. The US Navy recently issued an order prohibiting the use of TikTok on government mobile phones. In January and March of this year, the US Senate held two data security hearings on its data security issues. Statistics show that the company has received more than 250 overseas surveys in the first half of 2019, of which India, the United States, and Japan surveyed 99, 68, and 28 times, respectively. The response measures taken by ByteDance are to establish local data centers, delete some short videos, and prohibit specific content, appoint former U.S. Department of Defense officials, etc. as overseas government relations and legal consulting teams.
New traffic market and uncultivated commercial opportunity
SensorTower data shows that TikTok's global revenue in 2019 reached 176.9 million US dollars, accounting for 71% of its historical total revenue of 247.6 million US dollars, more than five times the 2018 revenue. Chinese iOS users spent 122.9 million US dollars on TikTok, which accounted for 69% of TikTok's total revenue last year.
Like Douyin, advertising is TikTok's main source of revenue. There are four forms including open screen advertisement, information flow advertisement, challenge and sticker. TikTok previously launched TikTok Ads, a marketing service brand. On March 31, AppsFlyer released the latest "Advertising Platform Comprehensive Performance Report" (Tenth Edition), showing that TikTok Ads won the top spot in the global growth list for the second consecutive time. In 2019, the download of TikTok Ads in the whole has increased by 120%. Recently, Guangdong Advertising Group has obtained the right of TikTok Ads to enter the overseas market, and the stock price has been in daily limit for two consecutive days.
"199IT" reports show that 60% of TikTok monthly active users are between 16-24 years old, whose users are younger than Facebook and YouTube. Internet celebrities with 2.5 million followers on the TikTok platform charge an average of US $ 500-800 per original content, while on the Instagram an average of 10,000 fans will charge an additional US $ 100 per additional 10,000 fans. According to the Chinese "2.5 cents / fan" quotation, the same level of KOL quotation is about 62,500 yuan. TikTok is still relatively rare in the country, where "celebrity sell goods" has become popular, and the monetization ability of these celebrities has not yet been fully verified. TikTok, which is still in the "barbarous growth" stage, has a considerable advantage in advertising price and cost compared to Instagram. And it also has a very mature commercial ecosystem. Some heads of MCN organizations said: "With a small part of the budget in Instagram promotion, it can achieve quite good results." Another way of cooperation is to cooperate with TikTok officials through the recruitment and review of overseas agencies.
Cross-border marketing agencies believe that "Saturday and Sunday are the peak periods of TikTok's traffic, and it is recommended that short videos be prepared in advance on Wednesday and Thursday. From the current situation, the conversion rate in the Middle East, Southeast Asia, Japan and other markets is relatively high."
Among the above advertising formats, the "challenge" format that can trigger generation Z's sense of participation, creativity, and long-standing circulation on Twitter and other platforms. Perhaps it is the best way to integrate into the open cultural environment where overseas people are keen to express themselves and trigger the spontaneous second creation and communication, which will also be the mainstream marketing form of Tik tok in the future. Calvin Klein uploaded video ads shot by celebrities such as Shawn Mendes, Kendall Jenner and A $ AP Rocky on TikTok, encouraging users to use the "co-production" function to shoot videos and initiate thematic challenges. The relevant data shows that the marketing effect was 10 times than that of Justin Bieber's in 2015.
In addition to the mature algorithm and recommendation mechanism of Douyin, from the perspective of TikTok's own commercial performance, its information flow advertising is significantly less than Douyin. Due to different advertising regulations in various countries, the pace of commercialization is more cautious. "2020 may become a critical year for its commercial acceleration." The high-profile signing of Luo Yonghao's Douyin has already shown its determination to enter the live broadcast e-commerce, and its "Douyin Shop" also emerged. At present, TikTok has not yet opened the shopping cart function, but mainly focuses on advertising to guide purchases, but all e-commerce attempts by Douyin may provide experience for them. Perhaps the main force of ByteDance with the goal of 200 billion revenue this year is still Douyin. However, TikTok, which has a sufficiently large flow pool, shows great potential for explosion.
This is an article from WeChat official accounts Yuledujiaoshou(ID: yuledujiaoshou), written by Mia, translated by Chris Yuan.