Caixin
Jul 09, 2020 06:56 PM
BUSINESS & TECH

Four Things to Know About What Makes TikTok Tick

TikTok is at the vanguard of a new generation of software coming out of China, and is one of the first to find success internationally.
TikTok is at the vanguard of a new generation of software coming out of China, and is one of the first to find success internationally.

In less than three years, short-video app TikTok has grown from humble origins to become one of the most popular apps in the world, becoming the most downloaded nongame app in May. So far it has been downloaded over 2 billion times and garnered over 800 million monthly users.

Known in its home China market as Douyin, the addictive app is at the vanguard of a new generation of software coming out of China, and is one of the first to find success internationally. But that success has also brought international scrutiny and even controversy. Last week, the app was banned in India, and it has been criticized in the EU for its data protection policy.

The following are four essential things you need to know about this global phenomenon.

What are TikTok’s origins?

In 2016, the fast-rising tech unicorn ByteDance launched an app called Douyin, a Chinese answer to Musical.ly, a U.S. social media platform allowing users to create videos where they were lip-syncing and dancing. A year later, ByteDance purchased Musical.ly for about $800 million and rebranded it TikTok in 2018.

In its infancy, TikTok, the overseas version of Douyin, was widely regarded as a lip-syncing app with many of its popular videos centered on people mimicking songs. But now the app has evolved into an online community where people can watch, share and create short videos spanning a wide range of categories like acting out comedy skits and even expressing political views, with options to use various special effects and filters.

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To read a Caixin Global Intelligence profile on ByteDance founder Zhang Yiming, click here

How big is TikTok internationally?

TikTik is now available in more than 150 countries with about 800 million monthly active users, according to social media advertising agency Wallaroo Media. At least 120 million people use TikTok every month in India, which is one of the app’s key markets. In the U.S., the app has about 65 million monthly active users.

In June, TikTok raked in $90.7 million in user spending, taking the crown as the world’s highest-earning nongame app during the month, according to research firm SensorTower.

TikTok has been downloaded more than 2 billion times on Apple Inc.’s App Store and Google LLC’s Play Store. India is the biggest source of those downloads, contributing a share of about 30%, followed by China with 9.7% and the U.S. with 8.2%.

Why is it in trouble internationally?

As it has shot to succeed globally, TikTok has come under increased scrutiny from governments worried about its lax privacy protections and status as a Chinese company. The latest pushback is from the U.S., where TikTok has about 65 million monthly active users. During an interview with Fox News on Monday, U.S. Secretary of State Mike Pompeo said that his country is “looking at” banning TikTok, and he persuaded Americans not to use the app.

The top U.S. diplomat’s warning comes on the heels of TikTok’s removal from app stores in India, where at least 120 million people use the app every month. In its unprecedented ban, India accused TikTok of engaging in activities detrimental to the country’s national security. The measure came against the backdrop of China-India relations being soured by a weeks-long border skirmish that left at least 20 Indian soldiers dead.

Moreover, TikTok is also facing a probe by the European Data Protection Board, which has set up a task force to examine its data processing activities and privacy practices across the European Union after a member of the European Parliament voiced concerns about the app’s potential risks to security and privacy.

Closer to home, TikTok may be the first social media platform to make a decision to quit Hong Kong, with a spokesperson citing “recent events” for the move, without being more specific.

Can TikTok solve its problems?

To address data security concerns, ByteDance has taken a number of measures.

The appointment of Walt Disney’s former streaming head Kevin Mayer as TikTok CEO is considered the company’s biggest move aimed at winning over Washington. TikTok has said that an app “led by an American CEO with hundreds of employees and key leaders here in the U.S.” would provide “a safe and secure app experience for our users.”

In Europe, TikTok is accelerating localization by shifting the responsibility for protecting personal data of its European users from its U.S. entity to its Irish and U.K. branches. The company has also opened a main European office in London, which TikTok is reportedly considering as a possible location of its global headquarters.

Last but not least, TikTok has also established a content moderation committee made up of external technology and safety experts who are responsible for shaping the app’s content policies related to child safety, hate speech, misinformation and other potential issues.

Contact reporter Ding Yi (yiding@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)

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