TikTok has seen a meteoric rise to the top of the social media food chain in recent years. Even catching the eye of the US government. But where did the company come from and how was it able to grow so fast?
TikTok has grown out into a worldwide phenomenon. TikTok was downloaded 2.6 billion times globally in December 2020. This is a major shift within the online media landscape because TikTok would become one of the most popular Chinese apps that have reached a significant audience outside China. May it be through an altered version of its native Chinese version Douyin.
As the company grew to fame, it gathered such a large following that different governments around the world stepped in to decide what to do with it. Did it pose a security threat? And what made it so appealing to young audiences and marketers alike?
Launching an AI-powered content platform
ByteDance, who owns TikTok, was founded by Zhang Yiming, a media-shy software engineering major from Nankai University. This might come off as odd because most of the popular social media platforms have interesting founders who regularly seek the limelight. The opposite is true for the founder of TikTok. Shaun Rein, who spoke to Nikkie Asia about this mysterious CEO said, ‘There is no benefit to being high-profile, It is always better to be low-profile in China, especially if you are a tech CEO. … Being too high-profile attracts the attention of regulators in China and now, with the U.S.-China trade war, the attention of U.S. government officials.’ Nonetheless, a profile can be created from Zhang Yiming.
Zhang has worked for many companies throughout his career. Most notably at Microsoft and selling his travel search engine Kuxun to TripAdvisor. But the founder had bigger ambitions. Zhang wanted to create a platform that would connect people through recommended content, curated to the personal preference of the user by a sophisticated algorithm. This platform, launched in 2012 as Jinri Toutiao, would be powered by artificial intelligence software. Although at the time, Zhang and his team didn’t have the technical expertise to build such an algorithm. Therefore they tinkered along and optimized the product throughout its development. Over the years ByteDance has seen many investments from big names in venture capital investing, like Sequoia, SoftBank, Goldman Sachs, and Bank of China who saw the potential of the product. The funding helped the company to further optimize its product.
In 2016, ByteDance wanted to strengthen its foothold in the social platforms market and launched its video-sharing platform Douyin. According to Nikkie Asia, ByteDance boosted the popularity of the app by attracting popular content creating from competitors, making them produce exclusive content for the platform. Now you might wonder why ByteDance insisted on locking in internet celebrities. To answer that question we have to look at the Wanghong Economy which is gaining momentum in China. Wanghong stands for ‘internet celebrity’ or in the West better known as influencers. In China, these internet celebrities are an integral part of the digital economy. They gather massive followings, selling products like hotcakes. Tenba Group noted that Papi Jiang, a famous influencer, charges brands $2.8 million per video. So it comes as no surprise that ByteDance wanted to get a front-row seat within this ecosystem. Attaching internet celebrities to its medium, would generate an influx of new users to its platform and ultimately pull advertisers away from rival platforms. In a power move, Bytedance purchased Chinese rival Musical.ly in 2017 for $1 billion. Integrating the user base into its platform.
While the hype was mostly off the radar for everybody in their 20s and above, Generation Z was flocking to the social media app. In 2019, The New York Times noted that TikTok’s popularity comes from its native algorithmic approach to the content it serves to its users. Instead of finding a hybrid solution like YouTube, Twitter or Instagram, that serves you a mixture of popular content, content you might have missed, most recent, and so on. Sometimes leaving users like they are test subjects, getting content that does not suit them, or view one video and then see similar content till our civilization will collapse. TikTok, on the other hand, is purely algorithmic, tracking your every move in, and outside, of the platform making sure that the content you receive is tailored to your tastes. This can be traced back to the origins of ByteDance and its platforms, which heavily rely on curated content. This new approach glues users to their screens and lets them return, day in, day out.
To strengthen the hype even further, TikTok launched the Creator Fund in July 2020. A $200 million program to help popular users boost their content across the community. TikTok said about the fund, ‘Through the TikTok Creator Fund, our creators will be able to realize additional earnings that help reward the care and dedication they put into creatively connecting with an audience that’s inspired by their ideas.’ We can read between the lines here, because of how altruistic it all might seem, strengthening the grip with your users by giving them monetary incentives, is the best way to build a recurring community.
In the same year, TikTok announced its biggest ad campaign to date in the United States. The ‘It starts on TikTok’-campaign ran on television, on well-known channels like ABC, NBC ESPN, and TNT. Digital media like Spotify and Hulu and social media channels Twitter, Instagram, and the platform itself. TikTok backed the theme in a press release by saying, ‘Every new story created on TikTok is the start of an exciting journey.’ Further elaborating, ‘What begins as seconds of authentic creativity often turns into much more: careers blossom, memes develop, hobbies flourish, communities coalesce, and obscure songs climb to the top of music charts. Once a story For You, it becomes a story for her, for him, for them, for us.’ The story unfolds in a variety of formats. A 30-second ‘brand anthem’ as Variety dubbed it and an extended 60-second digital ad on video platforms like YouTube.
The advertising campaign could be considered a home run. The platform grew faster, adding millions of new users. Two years before the campaign Tiktok had 680 billion monthly active users and Wallaroo Media estimated the app to have increased to 1 billion monthly active users in January 2021. It is now part of the social media behemoths like Facebook, Snapchat, and Twitter, that dominate western markets. This was the first time in history an outside force can compete with the American giants in the global theater.
Shaking up the social media landscape
In 2020 it became obvious why other social media platforms like Snapchat and Facebook saw TikTok as a threat. Its user base was predominantly young teenagers in the ages from 10 to 19 years old which represented 32.5% of the user base in the United States, followed by 20 to 29-year-olds, who represented 29.5% of the users. One of the many appeals of TikTok that attracts younger users is the possibility of stardom and not only its algorithm that curates the best content. It only takes a glance at the most popular users on TikTok.
In complete Facebook fashion, the platform tried to stop the exodus of teens that were moving to TikTok with an app that would hopefully appeal to this demographic.
US-based dancer Charlie D’Amelia has over 100 million followers. The same goes for Addison Rae garnering over 2 billion likes on her videos and 75 million followers. But followers are just one part of the equation. Having a large audience attracts brands who want to tap into the engaged fanbase. In July 2020, one of the most popular TikTok’ers, the D’Amelio sisters and Addison Rae signed lucrative brand deals, outside the platform. Addison Rae and her mother would host the weekly, ‘Mama knows Best’-podcast exclusively on Spotify. The D’Amelio sisters launched a cosmetics product line called Morphe. The brand is marketed towards Generation Z, who according to Tubefilter, prefer a more minimalistic look. And coincidentally also one of the largest audiences of the platform.
In complete Facebook fashion, the platform tried to stop the exodus of teens that were moving to TikTok with an app that would hopefully appeal to this demographic. In 2018, Facebook launched the app Lasso, a lip-syncing app that enabled users to create short dance videos. Or anything in between. But The Verge noted that ‘Facebook has been oddly quiet about Lasso’s launch, with no official statement on its website.’ Although, it didn’t take long before Facebook discontinued the app two years later. The company told Techcrunch Lasso was a bet to see whether it would be a valuable addition to the Facebook portfolio, but unfortunately, the product didn’t receive the anticipated pick-up. But you and I know that Facebook wouldn’t just give up after one try. A month later after the discontinuation of Lasso, it launched Reels in 50 countries on iOs and Android.
Reels, just like Lasso and its rival TikTok, enables users to create up to 15-second videos and add lip-syncing to their favorite pop jams. And just like Stories, Reels became an integral part of the Instagram interface. The Verge spoke to the product director of Instagram, Robby Stein, who said that TikTok put the lip-syncing genre into the mainstream and Instagram puts its twist on the functionality. Building Instagram for a selected number of core features. Like we’ve seen with Snapchat and Stories, Facebook emulates many elements from competitors to make sure they do not pose an existential threat to the company. Because Facebook knows, the relationship with users is thin and once a better alternative comes around, this connection breaks, and the community will crumble.
ByteDance versus the Government
TikTok has experienced meteoric growth over the years, but sooner or later, it will get noticed by higher powers. And although the founder might stay away from the public and journalists, the app is caught in a geopolitical tug of war. On August 6, 2020, the Trump administration released an executive order that would block TikTok and the messaging app WeChat from distribution within the United States. According to the administration, TikTok posed a security threat as its parent company ByteDance was closely affiliated with the Chinese Communist Party.
In the opening paragraph, I said that ByteDance became a geopolitical pawn with TikTok. It became the symbol for Chinese foreign intervention. But this wasn’t the first time the company wandered into the spotlight. In 2018 Zhang issued a public apology on its news platform Touitou, announcing the permanent shutdown of its content sharing platform Neihan Duanzi. According to the statement, the content was not representing communist values. Zhang said that the company was too focused on pushing new technologies, forgetting the values of socialism. To ensure that parent company Touitou would adhere to the communistic views, a blacklist system would be set in place to counter rumors and vulgarity. So it might not come as a surprise that the US government was watching the rise of TikTok with a certain reluctance, as Zhang has shown that in the past it would bow to the party.
In 2018 Zhang issued a public apology on its news platform Touitou, announcing the permanent shutdown of its content sharing platform Neihan Duanzi.
In 2021, TikTok came under more scrutiny, after a 10-year old girl from Italy allegedly died from asphyxiation from the so-called black-out challenge that was going around on the platform. Not only is this a very sad turn of events, but it also goes against the terms and conditions of the company, which does not allow the registration of users under the age of 13. The local privacy authority has ordered the platform to block all unverified user accounts up to the 15th of February of 2021.
While TikTok claims to do all it can to protect its users, it’s not the first time it offended its terms and conditions. A year earlier it was fined $5.7 million by the Federal Trade Commission in the United States for allowing uploads of users under the age of 13. In a press release, the Chairman of the FTC Joe Simons said, ‘The operators of Musical.ly—now known as TikTok—knew many children were using the app but they still failed to seek parental consent before collecting names, email addresses, and other personal information from users under the age of 13.’ Further stating, ‘This record penalty should be a reminder to all online services and websites that target children: We take enforcement of COPPA very seriously, and we will not tolerate companies that flagrantly ignore the law.’
It remains to be seen how TikTok will handle the issues that come their way. At the time of writing the legal actions against the platform set in motion by the Trump Administration have been put on hold by Biden, whose staff still needs to investigate the matter before taking any steps.
TikTok proved to be a worthy adversary
ByteDance has become a multibillion-dollar tech giant who through its apps dominates the Chinese news and social media scene and can give the current dominating platforms a run for their money. ByteDance saw the potential within China, where internet celebrities are the new movie stars. It attracted popular influencers to its platform and in doing so, skyrocketed its popularity.
But as many will know, with great power, comes great responsibility. TikTok on its outer layers looks like an innocent social media app. And in many ways, it does. Members can post funny lip-syncing videos, share them with friends and popular members can generate serious income. Yet, its founder has previously shown that his company needs to abide by the rules of the Chinese government. In doing so it caught the eye of local authorities around the world. How the company handles data, is still shrouded in mystery.
Now you might wonder, at the end of all this, how the app was able to penetrate the Western market. That’s always a difficult question to answer. The easiest explanation is the fact that ByteDance has been pumping many millions of dollars into advertising and its community, making sure it’s grabbing the attention of as many internet users as possible. Another more abstract reason is the diversification that a lot of influencers are putting into their online business. Overreliance on one platform is always a risky strategy and as influencers fluidly move around, their following comes along with them. Because when one medium falls flat, another is available to stay engaged with their fanbase.
And in doing so, an organic flow of users moving around between platforms gains momentum. Consumers like novelty and are eager to explore the next big hit. May it be a fad or permanent. We can also not understate the flashy design language that TikTok is using in its videos that catches the eye of the viewer. Creating appeal. A wow-factor so many consumers crave. The algorithm serves only the best and most relevant content when opening the app. The future is unsure. TikTok may have become pandora’s box of privacy-related issues or just another advertising platform with great targeting options for advertisers.