Burst of growth makes TikTok worth watching
ByteDance’s latest round of private share transactions has taken the social media behemoth to a valuation of over $104bn. TikTok, the video-sharing app, and South East Asian twin Douyin allow you to interact and follow other musers.
In 2017, ByteDance bought the lip-sync app Musical.ly and merged TikTok with Musical.ly’s 200-million users.
TikTok’s app allows users to create and share 15-60 seconds of videos enhanced with music tracks and movie sound bite clips. It’s creative, engaging and full of raw unfiltered emotion; pretty much the opposite of the vanity app Instagram. It’s the first Chinese tech business to operate in more than 155 countries, joining an exclusive club previously dominated by Silicon Valley businesses such as Apple, Facebook and Google.
It’s enjoyed exponential growth and was the most downloaded social media app in the first quarter of 2020 with 315-million app downloads. In the three years since it launched, ByteDance has registered more than 1.5-billion monthly active users. In comparison, Facebook and Instagram took around six years to accumulate a half a billion monthly active users.
Again, if we bring it down to the TikTok level, the app boasts more than 800-million monthly active users. TikTok did in two years what Facebook and Instagram did in six.
TikTok, which began in China, has seen its US user base more than triple thanks to the lockdown. In the first quarter of 2020 as TikTok became the most downloaded app on the Apple App Store.
TikTok users are also young, 41% of them between the ages of 16 and 24, making them attractive to advertisers. In comparison, 23% of Instagram’s users are. While Instagram encourages largely passive scrolling through images and videos, TikTok’s bread and butter is participation. Nine out of 10 TikTok users are on the app several times a day; the average time spent on TikTok in 2019 was 52 minutes. This number has now gone through the roof.
Last year, TikTok announced a partnership with Giphy, allowing the company’s videos to be used as GiFs on any platform that uses GiFs. This means videos are easily shared and embedded across other social media platforms like Twitter, Facebook and Instagram. TikTok has figured out how to draw Facebook’s 2.6-billion users, ripping off every other social media company’s innovations.
Facebook responded in November 2018 with its Lasso app, allowing users to create fun short videos; it appears to be off to a slow start or it might have bombed. Estimates suggest the app has fewer than 1-million downloads and its lead product designer left the company for Netflix shortly after its launch.
The question is: can Facebook figure out how to replicate TikTok’s magic sauce the way it stole Stories from SnapChat, or will an imitation lack authenticity and be a watered-down version of TikTok?
Either way, there are three potential paths for Tik Tok:
● It ends up like Snapchat, carving out a nice niche but never gains anything resembling big-tech status.
● It’s a flash in the pan like Vine. ● It becomes a viable competitor to Facebook.
If the third possibility comes true, we could see Facebook shed a lot of value the same way Facebook sucked the air out of traditional media.
Put another way: is TikTok about to Facebook Instagram? We’ll see. I’m more excited about the prospects of ByteDance coming to town.