Today it’s clear how Douyin is showcasing the future of social and e-commerce. Focus on Douyin if you want to win in China. Let’s see why
Chinese e-commerce sector is booming, having a higher e-commerce spend this year than the rest of the world combined. Last data show us, again, how China is such a big opportunity for brands. As we know, the Dragon, once known as less connected country in the world, has become the land of the e-commerce giants with Alibaba and JD amongst many others all dominating online spend right now. But other new players are growing behind the curtain. Pinduoduo, Meituan, Kuaishou, Little Red Book and Douyin some names.
That’s why is not wrong to say that the opportunity for brands isn’t in the Alibaba’s & JD’s. Whilst they account for over 50% of Chinese e-commerce, it’s more effective as a brand to go after the other portion that isn’t the lions share that is found through other e-commerce channels. Let’s see how Douyin is becoming month by month an important player in e-commerce sector. We’ve mentioned Douyin but also the “underbelly” of Chinese commerce, such as private communities, for example social sellers on WeChat.
Short-Form vertical video is going to be the dominant format over the next 5 years, and Douyin is the platform that will lead the way. We’ve always been confident on short-form video, and a large reason for that is the huge growth of Douyin, with over 500m monthly active users and rising, and over 50% of those using the app daily.
Today it’s clear that Douyin is showcasing the future of social and e-commerce, seamlessly integrating the two through content and future technologies.
Douyin’s latest feature is a true game-changer. You can now select a feature in a video, for example, a person or item of clothing, and search for other videos or images containing them or directly buy the products recommended. What’s the meaning? It’s what we’ve predicted will happen: Next generation of social media led by AI.
Could be a shock, but forget Tmall, Taobao and WeChat – focus on Douyin if you want to win. Let’s see why. Right now Douyin’s aims are to get as many users as possible and grow the platform, even outside China, and give exposure to great content, there is no ulterior motive like there is with other social platforms that are pay-to-win.
On Douyin, content wins, and that’s the best time for brands to build an audience. Digital experts always been bullish on short-form video and Douyin in particular, and this latest feature reinforces that and opens up a world of possibility for brands in connecting with their audience. Brands need to be working toward how they can leverage the direction that social is moving to, and they need to be doing that now – this is merely the tip of the iceberg. Are you going to start building an audience on Douyin?
China is a huge opportunity, but everyone should remember that it pays tenfold if you think outside the box, be bold and be creative. Think beyond the status quo platforms that everyone talks about and look at the opportunities everyone forgets. This is where the real arbitrage can be found, and Douyinis one the top player to interact with.
It’s not just entertainment. Live-streaming is the Chinese answer to consumer’s need for transparency. And now even WeChat enters China’s live-streaming squad, providing live broadcasts within its Mini Program platform
Live-streaming is not only the ultimate entertainment format but it is also the internet’s next form of digital communication. It is coming from China to reshape the whole e-commerce industry one stream after the other. After having pioneered social-commerce, the Dragon is now setting the model for video-driven e-commerce both at home and abroad.
According to statistics, more than 100 million viewers watch a live online video event every month while nearly 32% of users buy products through live-streaming videos. It is the “entertain-merce” era where commerce is inextricably linked to entertainment.
After Taobao revealed that goods sold via live-streaming in 2018 were worth a total of $14.9 billion, now even Tencent has accelerated the integration of live-streaming features into its WeChat Mini Program platform. The aim is clear: boosting e-commerce through real-time content.
WeChat is going to open up new e-commerce options by providing live-streaming features. According to a WeChat public account called Tencent Live Streaming Assistant, China’s internet giant, already started to test the live-broadcasting function with content managing companies and a limited number of e-commerce players in March.
The sources have revealed that the firm is working to provide a smooth transition between watching broadcasts and buying online. Apparently, the user would be allowed to click the products listed on the live-streamed video and then, would be directed to the merchant’s Mini Program to finalize the transaction.
Streaming on WeChat was already possible before, but sellers had to link up with the Tencent Live app, which operates as a separate platform. Now, with the new features, merchants with official accounts will be able to live-stream their goods through an H5 marketing page – interactive pages written in HTML5 language, usually for mobile websites – embedded in their Mini Programs.
One of the best ways to gain instant reactions and engagement from the audience is to leverage live-streaming. After Taobao and JD.com, this function is finally available even on WeChat.
In addition to Alibaba’s Taobao and JD.com, Chinese vendors now have a brand-new channel to generate revenues, which among other things leverages WeChat’s enormous volume of users. With 1.1 billion monthly active users, WeChat ecosystem is, therefore, enriched by features that could turn the app into the next bigger player in e-commerce. It will become an even more powerful platform that satisfies all kinds of needs of the online community.
Nevertheless, live-streaming and e-commerce have been a winning combination in China for some time now. In late 2016, only a few hundred of Chinese mobile apps had live-broadcasting features. But today, there are an estimated more than 900 real-time video platforms and over 10 million active hosts in the country. So much so that today, experts claim that this market in China is going to be worth $8 billion in 2019.
The popularity of this new format derives from two particular features: the chance for everyone to be seen by an audience and the complete transparency of the content as it is filmed live with no post-production. Therefore, from education to entertainment, from online gaming to live shopping, real-time videos now represent the ultimate form of communication for Chinese millennials. Indeed, of the over 800 million people with internet connections in China, nearly half of them use real-time video apps.
Live-streaming’s interactive nature makes it suitable for many audiences with different purposes. And for what concerns education, real-time videos are making a life-changing difference in China’s rural areas.
CCTalk is part of a growing number of live-broadcasting services in China’s education industry. Similar to entertainment and e-commerce applications of live-streaming, educational live-streams open a real-time channel between a host and an audience, or a teacher and students. Today, over 10,000 individuals and organizations are teaching classes on CCTalk so that even larger players such as Tencent and YY now have their own live education platform as well.
However, before being China’s top form of communication, live-streaming is above all a form of entertainment. With the rising popularity of short-video apps, real-time content has quickly started to gain interest among viewers. With 59.7 million registered users, Yizhibo is one of the biggest live-streaming platforms in China, whose strength is to be fully integrated into the social network Weibo.
Even the online gaming industry is leveraging the live-streaming trend so much so that currently, the PRC is the second-largest eSports – electronic sports – market behind the United States. The two dominant players in China are Douyu and Huya where users can share and engage with videos of any sort including real-time gaming.
Live-streaming is not only booming but it is also fueling Chinese e-commerce with nearly 32% of customers now buying products directly on real-time video platforms.
Nevertheless, while many companies adapted their platforms to respond to the demand for entertainment and real-time content, live-streaming is now revolutionizing the entire e-commerce sector. As about 95% of e-commerce activity in China is made through mobile devices, live-streaming has indeed become a powerful tool for the online retail industry.
Even farmers from rural China have now become real live-streaming stars. Today, 1.15 million rural users sell local products on Kuaishou through both short videos and live-streaming. Their videos show the origin of food on sale and thus respond to the consumers’ need for transparency.
Broadcasting in the PRC, therefore, started as a non-commercial trend with young people sharing their lives and talents. However, today, e-commerce penetrates the majority of live-streams whether through fashion show broadcasts or via internet celebrities reviewing the latest cosmetic product, enabling consumers to buy what they see on the screen in real-time.
The biggest player in the business has always been Alibaba. Tencent has been trying to catch up after its own social features like WeChat public accounts and Moments started seeing declining numbers of views. Moreover, short video sites such as ByteDance’s Douyin – known as TikTok outside China – and Kuaishou, have both leveraged on live-streaming as a way to boost e-commerce.
Live-streaming is working so well for e-commerce because very often, the result of instant interaction is impulse shopping. According to Jing Daily, the return rate from real-time content could range from 15% to 50%, with strong evidence that the higher the prices are, the higher the return rate is. This is because young luxury shoppers demand transparency. Therefore, live-streaming is the perfect channel for brands to give consumers what they demand while also being creative and entertaining.
Broadcasting allows room for spontaneity, giving the illusion of bringing the host and the audience closer through real-time interactions. In a country where the customer gives extraordinary importance to building relationships and sharing interests, live-streaming is certainly a powerful tool.
The real-time video trend has shown how in the Middle Kingdom, entertainment goes hand in hand with digital commerce. Live-broadcasts provide people with entertainment and a glimpse into the lives and experiences of others, attracting both viewers and consumers.
According to a report published by the China Internet Network Information Center, at the end of 2018, China hosted 397 million users on multiple live-stream websites while demonstrating also tremendous purchasing power. Therefore, the PRC is not only the first and largest live-streaming market in the world but its netizens’ purchasing experience is getting more fun, more efficient, and thus more productive year after year.
Today, in China, it is almost impossible to separate entertainment from commerce, but live-streaming has so much potential that probably we have not seen it realized to the fullest yet.
Video content is leading the e-commerce sector in China. But as short-video apps leverage this format to monetize their businesses, the competition between Douyin and Kuaishou is heating up
Bite-size entertainment is hot in China so much so that many companies are leveraging the short-video format to monetize their business. But while short-video apps cement their presence in the e-commerce industry, the competition between Douyin and Kuaishou is heating up as their user bases overlap day after day.
According to a report from mobile data research firm QuestMobile, the number of people using China’s two leading video apps more than doubled in the last twelve months, reaching the figure of 158.8 million overlapping users in June.
The tech-focused WeChat account 晚点LatePost claims that Kuaishou and Douyin have 210 million and 300 million daily active users (DAUs) respectively. Moreover, both companies generated around $3 billion of revenue last year, with Douyin slightly above Kuaishou. Even though Kuaishou did not confirm these figures yet.
For what concerns the origin of these earnings, Kuaishou’s profit mostly comes from the platform’s live-streaming sessionswhile Douyin relies on advertising revenue. Indeed, if last May, Kuaishou earned $440 million from virtual gifts alone, Douyin did not even reach $58 million from the same revenue stream. However, the last one got $380 million from advertisements.
The two popular platforms are experimenting with e-commerce to monetize their businesses for some time now. Indeed, short-videos and live-streams have revolutionized online retail, providing a format that includes both entertainment and e-commerce features.
Today, both Douyin and Kuaishou are established Taobao’s products sellers. It means that live-streaming income is achieved by selling consumer goods such as clothes, accessories, and fresh produce, whose sale is supported by interactive links to e-commerce platforms like Alibaba’s Taobao.
As about 95% of e-commerce activity in China is made through mobile devices, video content has thus become a powerful tool for the online retail industry. While players like Vine pioneered this format back in 2012, Chinese companies have been the first to turn the video concept into a new form of online retail.
According to statistics, more than 100 million viewers watch a live online video event every month while nearly 32% of users now buy products through live-streaming videos. It satisfies the customer’s thirst for trust and transparency, as well as the growing need for entertainment and social engagement. The result is a new form of “entertain-mence”, a combination of entertaining contents, e-commerce, and social media features as well, of which the video apps Douyin and Kuaishou represent some of the pioneers.
“Short-video has become a powerful force in China’s social scene by providing 15-second entertainment to grab mobile users’ attention. It can be a strong weapon for e-commerce,” said Lu Zhenwang, chief executive at Wanqing Consultancy.
In particular, operated by Beijing-based ByteDance Technology, Douyin – the domestic version of Tiktok – started to integrate links to Taobao items in its videos in 2018 but it was not until recently that the social video app implemented a dedicated “Products” category in its search bar.
Today, ByteDance’s company already has partnerships with Xiaomi, NetEaseKaola, JD.com, Suning, and other stores to launch e-commerce mini-apps on its platform. But Douyin does not aim to provide e-commerce opportunities to big brands only. With over 250 million daily users, Douyin’s goal is to implement digital commerce features for small and medium scale merchants.
Also Douyin’s rival Kuaishou – known as Kwai in English – made a big move in June by tying up with China’s most popular e-commerce platforms, JD.com, Pinduoduo, Tmall, and Taobao, through a system similar to how affiliate links work. With this feature, the app allows users to show the products listed on these e-commerce sites via a channel called Kuaishou Small Stores.
Kuaishou, which had 341 million monthly active users in June, has sold more than $14 million in goods via its platform from August 28 to 30. According to the company, its promotional videos were viewed more than 200 million times during the three-day promotion called Kaopu Haohuojie.
According to Chinese media outlet Jiemian, the company, which has Tencent among its clients, aims to generate $4.36 billion in revenue in 2019 while in June, founders Su Hua and Cheng Yixiao set a target of 300 million DAUs to reach before 2020 Chinese Lunar New Year.
Currently, Tencent is in talks with Kuaishou about investing between $1 billion and $1.5 billion in the platform. By investing in China’s second-most popular short video app, the Shenzhen-based company could, in fact, compete more effectively with ByteDance.
These recent news show how e-commerce has proven to be an important channel for Kuaishou, which uses it wisely to monetize its huge user base, as well as to collect revenue from live streaming and ad sales. And as these latest moves demonstrate, the competition to gain China’s market share is heating up among social-commerce platforms.
Unlike Douyin, Kuaishou is popular with residents in Chinese rural areas and with users living in lower-tier cities. Some of its viral videos include farmers showing off their skills and people live-streaming their lives in the most remote villages.
Nevertheless, although the two video apps’ user bases overlap more and more, they still exhibit some differences in their user demographics and evolution. While Douyin is popular mostly in first and second-tier cities, through live streams, Kuaishou is changing lives in Chinese rural areas. Moreover, while Kuaishou started as a live-streaming platform before integrating short videos, Douyin followed the opposite path.
However, the success of both platforms, especially in the e-commerce industry, is mainly due to the advanced AI-supported content recommendation algorithms which is now enhancing the video-driven e-commerce in the Middle Kingdom.
The short-video industry has more than 820 million monthly active users as of June, meaning that more than seven out of 10 mobile internet users are on short-video platforms. Therefore, as the short-video market gradually nears saturation, Douyin and Kuaishou are increasingly competing for similar audiences, a fact that forces them to step up marketing and promotional efforts.
But these two platforms are not the only players here. The companies’ approach to e-commerce will put the two video apps in competition with China’s e-commerce giants like Alibaba and Pinduoduo, which are also trying to stimulate their growth through video content. Indeed, online sales on video platforms are increasingly becoming a great way to reach users, especially for what concerns those who did not have immediate plans to make a purchase.
As mentioned before, short videos represent a bite-size entertainment, a content that people can enjoy anytime, anywhere. Therefore, since this trend started last year, it drastically changed the way users consume content and thus transformed the whole marketing industry. Moreover, with the rising popularity of short-video apps, the live-streaming format also started to gain a renewed interest among users and it is now reshaping the entire e-commerce sector.
Today, e-commerce penetrates the majority of live-streams whether through fashion show broadcasts or via internet celebrities reviewing the latest cosmetic product, enabling consumers to buy what they see on the screen in real-time.
Therefore, not only is video content eye-catching, but it also provides a channel for customers to see how a product looks and feels in real life. A strategy that attracts not only consumers who want to buy a certain product or who are browsing online to make a purchase but also those who do not plan to buy anything.
Monetizing video apps is the result of this increasing trend. Both Douyin and Kuaishou, therefore, represent the perfect case of China’s evolving e-commerce industry while video-based e-commerce is becoming their next revenue battleground.
Video content has completely changed the way consumers do and conceive purchases. After having pioneered social-commerce, China is now setting the model for video-driven e-commerce both at home and abroad
Instead of slowing down, the importance of video content in the e-commerce industry keeps growing. It started in China three years ago but now, the trend to sell and buy through online videos is taking the whole world by storm.
If in the People’s Republic, video platforms such as Douyin – or TikTok for the Western market – and Kuaishou are now established Taobao’s products sellers, in the US, even Google has finally added new shopping features to its YouTube.
Video content is the true ultimate frontier for e-commerce and YouTube is just one of the last video platforms to have adapted to this revolutionizing trend. Again, China is setting the model and the West is following.
At first, China has pioneered the super app, a one-stop-shop for services from shopping to money transfers to bookings, then it has implemented concepts such as group buying and live-streaming. But TikTok’s short-video format has changed the whole game.
Actually, video-driven e-commerce saw explosive growth in 2016 when Alibaba’s Taobao began providing live-streaming features to its users. At that time, the live-streaming market was valued at $3 billion, a 180% increase over the previous year. Since then, video contents have boomed so much so that in 2018, the Taobao marketplace generated an extraordinary $15.1 billion in transactions from live-broadcasts.
For what concerns e-commerce in China, it is now a consolidated phenomenon. Today, more than 40% of whole online transactions take place in the Middle Kingdom. According to the China Economic Review, the country’s retail market is estimated to hit $6.77 trillion by 2019 with e-commerce representing 14.46% of the market.
But the Chinese online shopping frenzy does not limit to the national borders. China not only sets the model for cross-border e-commerce but it is also exporting online retail culture abroad, helping foreign digital markets to boom. Three years ago, the market size of cross-border retail e-commerce sales in the PRC was $78.5 billion and this figure is expected to exceed $140 billion by 2021.
It should, therefore, come as no surprise that Chinese companies are striving to leverage the huge market of online retail, getting more creative year after year. Video content in e-commerce is the result of this. Not only short-videos but also live-streaming are leading marketing trends in 2019.
As about 95% of e-commerce activity in China is made through mobile devices, video content has thus become a powerful tool for the online retail industry.
While players like Vine pioneered this format back in 2012, Chinese companies have been the first to turn the short video concept into real success. The short video app from Chinese company ByteDance, TikTok, in fact, quickly ranked 1 among the most downloaded free apps.
Short videos represent a bite-size entertainment, a content that people can enjoy anytime, anywhere. Therefore, since this trend started last year, it drastically changed the way users consume content and therefore transformed the whole marketing industry. Indeed, not only is video content eye-catching, but it also provides a channel for customers to see how a product looks and feels in real life.
Nevertheless, with the rising popularity of short-video apps, the live-streaming format also started to gain a renewed interest among users. Although completely different from the Douyin style, live-broadcasting, as well, is reshaping the entire e-commerce sector. Today, e-commerce penetrates the majority of live-streams whether through fashion show broadcasts or via internet celebrities reviewing the latest cosmetic product, enabling consumers to buy what they see on the screen in real-time.
An example is the Single Day – China’s biggest sales event – during which the e-commerce giant Alibaba live-streamed a fashion show called “See Now, Buy Now”. The show was broadcasted live on 10 platforms including Taobao and Weibo, allowing millions of consumers to buy products on the spot.
According to statistics, more than 100 million viewers watch a live online video event every month while nearly 32% of users now buy products through live-streaming videos. As a result, on one hand, an increasing number of Chinese e-commerce companies are integrating live-broadcasts to their marketplaces. On the other hand, Western platforms are trying to catch up with China’s e-commerce model.
Currently, many Chinese “parallel” marketplaces allow merchants to link a series of products to the stream while social media platforms such as WeChat, Weibo, and Little Red Book are joining the fray by testing e-commerce functions as well.
In the West, instead, launched in February 2019, Amazon Live features live-streams of hosts showing certain products, which users can buy directly from a carousel that displays under the video. And now even Google is testing new shopping features in its video platform, YouTube. Below those videos showing a product, the US internet giant will insert dedicated advertisements linked to its marketplace, Express, where users can finalize the purchase.
Live-streaming is not only booming but it is also fueling Chinese e-commerce with nearly 32% of customers now buying products directly on real-time video platforms.
But what is the difference between short-video content and live-streaming in e-commerce?
Short-videos usually last just a few seconds, less than a minute. They need to catch the attention of the potential customer very fast. Here, creativity is at its best and it has been also claimed to be addictive. Indeed, according to the app analytics firm QuestMobile, Chinese people spend 9% of their time online on video clips like TikTok’s, a 5.2 % jump from 2017.
Live-streaming, instead, is a much more interactive and involving experience. During real-time videos, viewers can interact with the streamer asking questions about the product they want to buy. Then, by clicking on the “purchase” button, users can add the item to the cart and check out in just one easy transaction without clicking away from the live video.
The nature of live-streaming is what makes it a trusted and reliable source of information for consumers, who can discover new products or receive shopping tips from China’s most popular Key Opinion Leaders, with whom viewers often establish a real bond of trust.
Indeed, video content is so important for e-commerce because it satisfies the customer’s thirst for trust and transparency, as well as the growing need for entertainment and social engagement. Therefore, as well as in the case of social-commerce – a combination of social media features and online shopping – with video content, China has pioneered the first form of “entertain-merce”, a combination of entertainment and e-commerce.
Artificial intelligence and big data have been leveraged to target users who want to buy a certain product or who are browsing online to make a purchase. The video format, instead, finally reach that audience that does not have immediate plans to make a purchase. To target those potential customers, companies must rely on great content to grab their attention and videos are the perfect tools to achieve the unachievable.
Although maintaining the quality of the content and the user experience could represent a challenge for brands, video-driven e-commerce certainly has the right ingredients to be a long-lasting trend.
The goal is to direct users to East Asia, allowing brands to extend their marketing campaigns
TikTok, the short video sharing platform controlled by Bytedance, tested a network for advertisers. The goal is to direct users in East Asia by allowing brands to extend their marketing campaigns, according to AdWeek.
Bytedance has thus sought to accelerate monetization in foreign markets, while competition within China’s content market becomes even more fierce. The company has made numerous changes to the staff, while experimenting with several new advertising functions for TikTok, thus trying to facilitate the process.
Wide choice for buyers of advertising space
The vast network of audiences linked to TikTok will allow buyers of multimedia content to choose between full-page mobile video ads, premium video ads or promotional videos that users have the chance to watch in full in exchange for in-app prizes.
The network, for the moment, offers ads only to users in China and Japan, as can be seen from the documents intended for product developers. Media buyers can also choose apps to avoid for ad distribution.
As a Chinese short-video app, TikTok achieved global popularity reaching 500 million monthly active users across 150 countries. But new e-commerce features and the launch of its own smartphone seem to bring the app to an even wider success
TikTok is now an international phenomenon. It is the “Made in China” success that is taking ground from the Celestial Empire to the United States, without forgetting the audience from the Pacific area.
Although today it ranks fourth, in 2018, Douyin 抖音 – TikTok for Western market – was the most downloaded app worldwide with an estimated 104 million downloads. The app exceeds 500 million monthly active users (MAU) across 150 countries while 150 million daily active users come from the PRC.
As the Chinese social media that is enjoying the greatest success among a very young user-base from all over the world, TikTok is the talk of the town and now many different brands and digital marketers seem to have noticed.
Launched in September 2016, the platform has begun to expand internationally by the name TikTok in less than a year. To date, the app owned by Bytedance is a reality in countries like Japan, the United States, and the Middle East. And this success is showing no signs of slowing down yet but, on the contrary, it is still growing.
TikTok is a short-video platform that provides users with editing tools that can add music and special effects to the few-seconds-long videos. Like many other social media, users can follow certain accounts and appreciate their content with likes, comments, and shares. However, unlike all the others, instead of focusing on people, TikTok invests in the content. In other words, users do not necessarily have to follow someone to have a rich newsfeed. The app selects for them a series of trend videos that the users can watch even if they do not follow anyone. And there is no doubt that many of the online videos are truly amazing.
The app has already shown its potential in marketing to Generation Z – the generation born between the mid-1990s and early 2000s. According to data, each user opens Douyin on average five times a day, spending about 30 minutes watching videos.
Since the launch, many international brands have been eager to experiment with this brand-new platform, including Chevrolet, Airbnb, and Pizza Hut, which worked with the app for advertising and marketing campaigns.
ByteDance was valued at $75 billion, and is among the leading technology companies in the world, with a turnover for 2019 estimated at around $18 billion. It is currently considered the most valuable startup in the world, joining Tencent, Facebook, and Google among companies with over 1 billion users.
The Chinese startup, formerly called A.me, was launched by the Chinese internet company ByteDance, whose core product, Toutiao, is a popular content platform in the Middle Kingdom and worldwide.
The race to become the leading short video app in the world formally started when A.me changed its name into Douyin. But the truth is that the $1 billion purchase of the Santa Monica/Shanghai-based Musical.ly decisively contributed to making the app reach not only the American teenage market but also the world’s Generation Z.
But it was not until August 2018 that Musical.ly was relaunched as TikTok when the two apps merged, laying the foundations for what is now the most popular short video app in the world.
In the beginning, much of the platform’s popularity could be attributed to its hashtag challenges, in which users film themselves lip-syncing or dancing to short audio clips about trending hashtags. But today, it is exactly a year since ByteDance shut the lip-sync-video app Musical.ly and migrated its users to TikTok. Now we can officially say, the re-brand and launch have been extremely successful, especially for what concerns impacting pop music, since the platform has become a staging ground for music hits before they reach the mainstream.
But what has helped TikTok to become such a major player so quickly?
First, after the merger, TikTok had access to an impressive number of users. Indeed, TikTok claimed to already have 500 million monthly users around the globe when it absorbed Musical.ly. Moreover, ByteDance is a corporate behemoth worth many billions of dollars. Therefore, not only the app can reach a huge audience but after the merger, it can also have access to a lot more resources.
And TikTok’s fiercest competitor may not even exist yet. “In this whole viral space, we’re in the really early stages of seeing what apps are gonna come about,” says music manager Danny Kang. “I would love to have a new platform every year that does this for the music business — reach new audiences, reach the kids,” says Jeff Vaughn, senior VP of A&R at APG.
Nevertheless, TikTok still wants to improve by adding even more features to the platform and thus attracting even more people.
The video social platform is now giving its young users direct access to online shopping while they watch fun, entertaining videos. TikTok is moving to profit from its widely popular app by integrating external online shopping links from the country’s largest e-commerce sites into its platform.
“Short video has become a powerful force in China’s social scene by providing 15-second entertainment to grab mobile users’ attention. It can be a strong weapon for e-commerce, especially for Alibaba and Tencent, which want to reach younger consumers and those living in smaller cities,” said Lu Zhenwang, chief executive at Wanqing Consultancy.
A shopping cart logo can now be seen on the Douyin user interface of certain content publishers with a fan base of more than 1 million. The shopping links allow followers of these publishers to buy goods ranging from cosmetics and food to stationery supplies on Alibaba’s Taobao and Tmall platforms.
According to recent statistics, up to 70% of young Chinese aged between 18 and 22 are interested in buying products directly through social media, compared to the global average of 44%. And Douyin has managed to capture its target market, or Gen Z as the 80% of the app’s users are under the age of 30.
Specifically, TikTok has become one of the main social-commerceapps, a platform that combines social media and e-commerce, allowing users to buy products by clicking on the video in real-time.
The move to embrace Alibaba’s online merchants is seen as a major milestone for Douyin’s commercialization efforts and could prove strong competition for Tencent Holdings, which is also counting on the rapid growth in China’s short video market to further monetize its presence in social media. There were nearly 250 million Chinese watching short videos at the end of 2017 and the market is projected to be worth $4.78 billion by 2020, according to iResearch.
But the entrance in the e-commerce arena is not the only special move TikTok has in store for its users. The Chinese app is working on several new seemingly Instagram-inspired features including a Discover page, a grid-style layout similar to Instagram Explore, an Account Switcher, and a more direct connection with WhatsApp, Google, and Facebook.
Moreover, a related feature, “Suggested Users,” could also come into play here, in terms of highlighting top talents. However, TikTok diverged from Instagram with the testing of two other new features focused on popularity metrics. One test shows the “Like” counts on each video on the Sounds and Hashtags pages, and another shows the number of Downloads on the video itself, in addition to the Likes and Shares.
But the news does not end here. TikTok seems to be ready to launch its own smartphone. According to the website Reuters, the device would be mid-range, designed for a young audience, and built by the Chinese company Smartisan Technology on behalf of ByteDance.
TikTok does not seem to want to limit its success to short lip-sync videos. Therefore, from the upcoming news, it really seems we should expect the app to grow even further in the nearest future.
YouTube is still number one, but Kuaishou becomes second highest photo and video app globally in Q2 2019, Douyin follows
Short video app Kuaishou – also known as Kwai – is about to become much more visible. The app will see its content appear on WeChat’s “kanyikan” (“have a look”) feed, which is filled with recommended content from each user’s contact list. Fortemore, according to a new report from Sensor Tower Sore Intelligence, the Chinese short-video app Kwai managed to make it to the second place of the ranking with earnings approaching $78 million, a 57 percent year-over-year increase.
The vast majority of Kwai’s revenue – 99% – can be traced back to China, the apps main market. Kanyikan is populated with articles and videos that a user’s friends mark by tapping the “zaikan” (“reading”) button, a design feature similar to Facebook’s “Like” button for the web. Thus Tencent will allow the short video app to tap WeChat’s 1.1 billion monthly active users and compete with ByteDance Douyin.
YouTube became the top-grossing app of the second quarter of 2019, PRC’s app following behind.
But Tencent is planning to definitely beat Douyin. At the moment, ByteDance main app has 3.2 billion daily active users, making it the most popular app of its kind in China. According to reports, Kuaishou is aiming to hit 3 billion DAUs before Chinese New Year in 2020. Plus, Shenzhen based tech giant is planning to invest between $1 billion and $1.5 billion in short-video application Kuaishou. Nevertheless no agreement has been signed yet, the cooperation has reached advanced stages of negotiation. Tencent’s investment support for Kuaishou would fortify the stickiness between the two companies.
From being the most popular short-video app in China, Meipai lost many users in favor of the emerging Douyin. But the company managed to survive the setbacks adapting to the competitive market of e-commerce platforms
For every social media platform that found extraordinary rapid success in China, there is one that is overshadowed. This is the case of Meipai, once the top short video platform, which has recently shared many of its users with Douyin.
However, Meitu, the company behind Meipai, is not taking this failure as a defeat and has already launched its plan B, a new social platform, which already collects more users than Meipai, Douyin, and Little Red Book combined. Meipai as well has managed to survive the setback, successfully coming back as a social-commerce platform.
But what is Meipai and how did it help to spread the short video trend in the Middle Kingdom? Then, what happened to this popular app and how did it manage to take the stage back?
As mentioned before, Meipai 美拍 is a video-sharing app created by Meitu Technology Co. Ltd., a Chinese tech company based in Xiamen, which is known for its image editing apps mostly addressed to the “selfie industry.”
Launched in 2014, Meipai became China’s most popular video app very quickly, attracting young women living in first and second-tier cities. Although it started off as a 15-second short video app, a model similar to Vine, over the years, the platform gradually expanded, adding new features like live-streaming and video additions that went up to 5 minutes.
A striking example of Meipai’s boom was the 2016 Cannes Film Festival, where L’Oreal invited some Chinese celebrities, including Li Bingbing, Jing Boran, and Li Yuchun, to live-stream their personal use of the brand’s most popular products on the platform.
The app’s early success lasted for two years with major international brands such as Disney, Victoria’s Secrets, and Adidas running video campaigns on the platform. In June 2017, the number of Meipai’s monthly active users (MAU) reached a peak of over 152 million people but then, the decline just started.
In December of that same year, the app’s number of MAU decreased significantly to 98 million users. In the meantime, other short video apps took the market over. One of these is Douyin, which not only “stole” many Meipai’s users but it also managed to reach overseas markets by the name of Tik Tok.
Actually, the decline of Meipai was not caused by the rise of more competitive platforms only, but it was mainly determined by the app’s latest choices and it was then hopelessly affected by a ten-day shutdown. Indeed, the first dramatic decrease in the number of users came soon after Meipai launched a new set of rules for sponsored posts. These regulations not only included the obligation to register every single sponsored post by the brand through the official platform, but they also added additional fees. As a result, Meipai’s top Key Opinion Leaders (KOLs) started to go through strict control by the app, sometimes experiencing their posts taken down from the platform. KOLs thus began to look for alternatives, bringing their audiences toward different shores.
In its five-year existence, Meipai went through many ups and downs. However, although some serious setbacks that favored its competitors, the short video app has been able to find its own niche in the beauty audience while also establishing itself in the Chinese social-commerce market.
In March 2018, Meipai also went offline for a complete system upgrade, a shutdown that lasted nearly ten days, leaving users and the influencers without a place to upload their high-value content. Thousands of KOLs have built massive audiences on Meipai and have thus experienced severe loss of engagement and audience.
In the meantime, Douyin became the favorite app worldwide with an estimated 104 million downloads. Therefore, when Meipai came back online, it showed many similarities with its main competitor. The app tried returning to its roots, making a heavy push to promote short vertically-shot 15-second videos and introducing lip-syncing features and other special effects that looked similar to Douyin.
Moreover, in June 2018, after the authorities criticized the app for spreading inappropriate content, Meipai was pulled from China’s iOS and Android app stores by Meitu for 30 days.
Nevertheless, Douyin was not the only app grabbing China’s larger market share. Other social networks were gaining popularity by addressing the same target audience, those young women from higher-tier cities.
In particular, Little Red Book 小红书 has been gaining popularity in the beauty niche, recording a 40% increase in the number of users since the end of 2017. In the beginning, Meipai was the most popular platform for beauty bloggers, to which Chinese consumers turned for tutorials and advice before Xiaohongshu took the stage over.
Meitu Technology Co. Ltd., actually owns many beauty applications and its original app is used by numerous women in China to beautify their photos. Therefore, after Little Red Book succeeded in grabbing the beauty audience, the Xiamen company has realized this should be the future of both Meipai and Meitu.
Fully aware of Meipai’s downturn, Meitu美图 reinvented itself and launched an alternative, which is now able to compete in the Chinese social media market. The photo editing app is thus transformed into a proper photo-social platform, where users from both higher and lower-tier cities, as well as overseas users, can share their content and follow the latest trends through different kinds of contents such as photos and Meipai-like videos.
With over 455 million MAU, Meitu surely has the numbers to lead the Chinese social media scene, especially for what concerns the beauty niche, having an impact on the she-conomy as well. According to the company, which also makes smartphones that integrates its beautification apps, Meitu is going to build a whole “ecosystem around beauty,” making a foray into beauty-related smart hardware.
Nevertheless, Douyin’s rise and Meitu’s temporary focus on its original app does not preclude Meipai from keeping its position as one of the most popular short video apps in China. Many Chinese wanghongs – internet celebrities – holding thousands of followers on Weibo now use both Douyin and Meipai for their video content and tutorials, especially for what concerns cosmetics. For example, Weibo’s travel influencer 貓力 Molly also has a successful Meipai profile, which counts 418.000 followers.
The reason all these apps still find their spot in the limelight is that they still ride the wave of short video content’s success as one of the latest forms of communication. But above all, as well as many other applications, Meipai turned into an e-commerce platform, allowing purchasing functions on its videos.
Users now can create products links that pop up in the middle of videos, which are more appealing than previous product links on the platform. Similar types of on-screen product links have appeared in many live-streaming apps such as Taobao Live and Yizhibo, but Meipai has been the first to use these particular pop-up links on a video platform.
As about 95% of e-commerce activity in China is made through mobile devices, live-streaming has indeed become a powerful tool for the online retail industry.
Therefore, the video app that was formerly overshadowed by Douyin actually turned out to be a revolutionary tool for fashion and beauty brands, because of both the entertainment and the social components. Moreover, Meipai, as well as Douyin and Kuaishou, has its official sub-platform for advertisers and celebrities as part of its business, and it offers services like data analysis and resource sharing.
Meitu’s video app may have experienced some setbacks since the launch date, but while the main company is going big on social media, Meipai managed to adapt to the situation upgrading its offer with e-commerce features, rocking the competition both in China and abroad.
When it comes to online shopping, not only has China set a new model but it is now exporting it beyond its national borders. There is no going back from Chinese social commerce but Southeast Asian companies like M17 are showing the intention to catch up
Despite being quite new for Western customers, social commerce is definitely a thing in China. When it comes to the Chinese shopping experience, buying on an ecosystem made of e-commerce platforms and social networks is not only normal but it is also obvious.
However, this latest trend has now spread far beyond national borders. Today, even the most popular social networks, as well as major e-commerce websites, are striving to merge entertainment, social engagement, and retail into a single platform. Some more successfully than others.
After years of Western technological leadership, especially American, it is now Chinese digital innovations to export technological trends to the rest of the world.
Facebook has thus introduced its own marketplace and Instagram has followed the same path providing brands with special tags that allow the user to buy the product. With a two-year delay from the Middle Kingdom, international most popular apps quickly switched from simple social media to trusted stores.
After years of Western technological leadership, especially American, it is now Chinese digital innovations to export technological trends to the rest of the world. The Chinese way of doing e-commerce is certainly a model that other countries are trying to copy, even if foreign attempts come slowly and have a less social impact.
But what is social commerce and how is China exporting this trend abroad?
Social commerce is the direct result of the recent drastic change in Chinese consumers’ behavior. With the rapid penetration of smartphones into Chinese lives, many aspects of the daily activities have changed and the one that changed the most is how they do and conceive purchases. What we once knew as e-commerce – an act of purchase by the user who chose to buy through an online platform – is now inevitably changed into a social activity closely linked to social networks.
This new way of doing online shopping can no longer be defined as e-commerce. Today we talk about social commerce or conversational commerce, a “hybrid” that comes from the combination of social networks, messaging applications, and shopping platforms. In particular, in China, it means getting in touch with people who share the same interests rather than just an act of purchase. Online shopping is thus perceived as a way of doing social engagement.
WeChat has already responded to this need by creating a communication-based ecosystem where retailers meet the customer by creating a relationship based on trust that is very different from that built by classic e-commerce companies.
Besides WeChat, there are some other Chinese applications which are less popular in the Western world but which represent the real forerunners of social e-commerce as we now know it such as Pinduoduo and Xiaohongshu.
The growing enthusiasm for this kind of online shopping is only likely to further grow as also worldwide users now started to express interest in social commerce. It is estimated that 70% of Chinese born after the Millennial generation will directly go on social media to purchase products or services this year.
In 2017, roughly one-quarter of US internet users had purchased a product they had discovered on a social media platform, according to Cowen and Company. No surprise, the highest occurrence was among millennials. Today, 84% of shoppers review at least one social media site before purchasing. Therefore, allowing users to buy on social media has now become one obvious solution so much so that a partnership between Snapchat and Nike to promote the new Air Jordan III “Tinker” after the NBA All-Star game had the shoes sell out in a record 23 minutes.
The Asian Dragon thus turned out to be not only a model for its growing technology but it also exports its digital innovation and M17 Group is another company, which has taken a cue from the Chinese experience to boost its online shopping.
Similar to social commerce channels, live-streaming also gives consumers the opportunity to engage with merchants about their products live and is proving to be a lucrative channel for customer conversion. Today, e-commerce penetrates the majority of live-streams whether through fashion show broadcasts or via internet celebrities reviewing the latest cosmetic product, enabling consumers to buy what they see on the screen in real-time.
The Taipei-based live technology and content company M17 Entertainment Group has recently joined the brand-new “live shopping” trend. In May, the company’s founder and CEO Joseph Phua announced the launch of HandsUP service, a B2B live and social commerce SaaS (Software as a service) product, marking its official foray into the digital commerce sector.
Established in 2017, M17 grew to become the biggest live technology and entertainment content player in developed Asia within two years. It has offices in Taiwan, Singapore, Hong Kong, Japan, South Korea, Malaysia, and the US. With an existing user base of over 60 million people and 15,000 content creators and influencers, M17 seeks to pave the way for the next generation of live and social commerce.
According to the founder, the core technology, mechanisms and product innovations in HandsUp are the creations of the dynamic “Migo” company, which M17 acquired in 2018 and whose team shares the group’s mission to enable global connections through live technology and entertainment.
The group’s content creators and their social communities are now connected with HandsUP sellers in order to provide them an easy selling tool through these communities. The talents’ ability to stream and sell simultaneously increases efficiency for sellers and eliminates intensive man-hours spent compiling orders manually, in addition to minimizing errors, which greatly simplifies the shopping flow.
The service harnesses live content and interactivity to create an all-in-one platform which aggregates “+1” comments from various social media platforms to complete orders. With just one click, sellers can sell live through multiple social platforms, facilitate order-taking across social platforms in real time and automate transactions based on comments captured. Therefore, leveraging the company’s proven live stream technology experience, the service aims to simplify the process of social discovery and live-selling for the seller, as well as the live-social shopping experience for the buyers.
The HandsUp service thus integrates live-streaming, social communities, and e-commerce, as well as the power and know-how of influencers and Key Opinion Leaders, to unlock the immense market potential of live social commerce. According to M17 Group, which also includes dating giant Paktor and GaiGai, the company is expected to generate over $300 million in revenue this year.
China has already moved away from the Western model of operating e-commerce and live-streaming as separate entities for some time now. But instead, the Chinese trend to integrate live-streaming, e-commerce, and social communities to unlock the market potential of live social commerce is now influencing the global e-commerce market.
Beijing has managed to expand the social commerce trend abroad, influencing the customers’ behavior, as well as the companies’ tech development, way beyond its national borders.
With M17, Southeast Asia has demonstrated that the Dragon has set a brand-new model, from which e-commerce companies now can develop their own commercial strategies and innovative technologies. Joseph Phua has leveraged Chinese experience, further developing the starting model, showing that there is room for Southeast Asia to join the Dragon in its seek for digital transformation.
There is no going back from the Chinese model. But the question now is: are the Western countries able to catch up?
Douyu, last July 2, had already worked with the US Security and Exchange Commission (SEC)
China again on the New York Stock Exchange. The live streaming platform Douyu, the Chinese streaming platform, is, in fact, ready to be listed on the New York Stock Exchange. The date, as reported by the Chinese financial blog Zaozhidao, is that of July 17th. However, the announcement appeared to be in the air, especially after Douyu, last July 2, worked with the US Security and Exchange Commission (SEC) to include earnings results for the first quarter of 2019.
In the last year, the Chinese company, as can be seen from the data, recorded an increase of 123.4% on an annual basis and 18 million RMB in the net profit in the first quarter of 2019. Previously, moreover, IFRA had had reported that Douyu could have launched its IPO this week already.
The listing on the stock exchange is also a challenge to the American rival Huya
Douyu submitted his IPO application to the SEC in April 2019, after it was assumed he was preparing for an IPO in the United States for more than a year. The company had initially planned to start its roadshow on May 6, but decided to postpone it due to market turbulence.
Douyu’s strong performance in the first quarter of the year suggests the likelihood that the Chinese company will maintain its advantage over its US rival, Huya, with additional financing from its IPO.
ECommerce Nest 
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