ByteDance, the owner of TikTok, has been laying the groundwork for its all-in-one app for years. At present, the Chinese version of TikTok, Douyin, can provide food delivery, travel booking and a variety of other services. With the help of a new product, the company wants to compete with the leader in the field of super applications – WeChat.
ByteDance’s core business is social media apps, and most of its $80 billion annual revenue comes from advertising. Last year, the company started offering grocery delivery in major cities like Beijing and Shanghai. For example, if the Douyin app shows the user a cheeseburger or a popsicle, it can direct the user to schedule a delivery or get a discount coupon. Users can also search the app for cinemas, bars, and beauty salons.
The so-called all-in-one app model is popular in China thanks to WeChat, which combines elements of WhatsApp and Instagram*, PayPal and other services in a single service. None of WeChat’s competitors offer such a wide range of services. However, Douyin’s experiment with grocery delivery raises the possibility that the app could become WeChat’s main competitor.
ByteDance has been laying the groundwork for its own one-stop service for years. The company is engaged in video games and online shops, and is now more dedicated to commerce, delivery services, booking of airline tickets and booking of hotels. According to ByteDance, Douyin’s 700 million users have increased their spend on these services sevenfold over the past year. GuoSheng Securities Co. estimates that Douyin will be able to secure 300 billion yuan ($42.1 billion) worth of transactions by 2025. If it succeeds, ByteDance will become a serious competitor to the largest Chinese Internet companies such as Tencent Holdings Ltd. and Alibaba Group Holding Ltd. Providing a wide range of services could help ByteDance expand the “everything for everyone” model via TikTok to other markets as the company clarifies its subtle policies in the US and European markets.
The company sees its recommendation algorithms as the main advantage. At Douyin and TikTok, these systems are designed to ensure that users scroll through short videos for as long as possible. It’s likely that the same algorithms are good at directing customers to the goods and services they are most likely to buy. For example, users watching winter sports videos can get links to buy snowboards, ski tickets, and cheap flights to Hokkaido.
Meanwhile, WeChat is attempting to penetrate the heartland of the Douyin with its short video service Channels. WeChat tripled the number of viewers of the service in 2022 and generated more than 1 billion yuan ($139.7 million) in advertising sales in the fourth quarter.
* It is included in the list of public associations and religious organizations for which the court issued a final decision to liquidate or ban activities on the grounds provided for in Federal Law No. 114-FZ of July 25, 2002 “On Combating Extremists”. has met activity”.