Why did TikTok conquer the world so quickly?

Why-did-TikTok-conquer-the-world-so-quickly

Autorin: Yuanyuan Xiao 

TikTok, known in China as Douyin, is a mobile short video application that allows users to create and share 15-second videos with music clips. Douyin was launched on the Chinese market in September 2016 by the private Chinese company ByteDance, which also owns Toutaio, one of the largest Chinese AI-powered news and information content platforms, and has an implied value of between $90 and $100 billion, according to a recent Financial Times report.

In August 2017, the international version of Douyin was released with TikTok and in November of the same year, ByteDance acquired Musical.ly, a community application for short music videos, for about $1 billion. In July 2019, TikTok reached more than 1.5 billion MAU (Monthly Active Users) worldwide and was the most downloaded non-game app worldwide in February 2020 with around 113 million installations - followed by WhatsApp, ZOOM and Facebook. Looking back, it took less than 4 years from market entry to this success. TikTok is also the only Chinese social network that is also successful in the western world.

TikTok encountered many challenges and obstacles on its way to becoming the market leader, such as sharp criticism, resistance and bans in various countries, and was ultimately able to prevail in the end. But: What were the reasons for the app's success, or rather, what were the key factors that made TikTok's triumphant advance possible?

To make TikTok known and successful worldwide, an effective business strategy had to be developed. In this context, the guiding idea was to apply advanced experience and to take root in local conditions. From market launch in 2016 to market leadership in China in 2018, Douyin's development path in the domestic market can be summarized in three stages:

  • Stage 1 “Product iteration and function enhancement” (09.2016 - 04.2017):
    During this stage, Douyin focused mainly on extending the functions and continuously improving the usability of the product, with the app version being updated approximately every ten days. In the meantime, the product was almost never advertised externally, but the features of the product were nevertheless quickly recognized by the public.
  • Stage 2 “Product marketing and promotion” (05.2017 - 12.2017):
    During this stage, Douyin focused on promotion and operation, such as sponsoring famous entertainment shows and inviting stars and other famous persons to increase popularity and attract a large number of users.
  • Stage 3 “Content quality improvement” (since 2018 until today):
    Already in the course of the first two phases mentioned above Douyin has become extremely popular in China. In order to consolidate and specifically expand the market position, the focus in the third phase has focused the continuous improvement of the quality of the content. This has led to the fact that the quality is considered by the public to be higher compared to other domestic competitors.

Douyin used its domestic experience to enter foreign markets, but adapted its marketing strategies to local conditions due to the different circumstances in each country. In addition, the company relied on targeted acquisitions in order to avoid having to develop overseas markets step by step. In 2017, for example, Douyin acquired its direct competitor Musical.ly for around 1 billion dollars, which reached 100 million MAU before the takeover. Musical.ly was then integrated into the TikTok app and existing Musical.ly users were migrated directly to a new TikTok account. With this strategy, TikTok quickly achieved a breakthrough in the US market. 
Another key factor in the worldwide success of TikTok is its sticky product design. The differences to other social media such as Facebook and Instagram become clear at first glance. TikTok's unique features and characteristics include:

  • Easy to start and use: Compared to other apps, TikTok makes it easier to edit and upload content and videos. In addition, the onboarding process is also different, i.e. no registration or tutorial is required, but you simply go straight to the content of the app, which immediately attracts attention. This approach particularly appealed to the Generation Z audience.
  • Immersive interface design: The full-screen design ensures an immersive experience, i.e. the video is played on the entire mobile phone screen and can be switched by scrolling up and down, which enhances the intuitive feeling while watching and also increases curiosity about the next video, since you don't know what the next video is.
  • Algorithm-driven feed: By combining a self-controlled feed with algorithmic observation and conclusion, the algorithmic feeds are based on the one hand on the videos that the user has already viewed or with which he has already interacted. On the other hand, when you start the app, the page "for you" opens, which contains almost endless material, instead of being limited to your own network, i.e. if you don't change the settings, videos will be shown at random.

Another reason for the app's success is the participatory content that requires user interaction. It is crucial that the content and form are as balanced as possible in order to maintain constant stimulation. For this purpose, TikTok combines user-generated content (UGC) with innovative skills to save the user from having to set up classic networks and to get him or her directly involved in the action.

The future will show whether TikTok will be able to maintain and establish itself at the top in the fast-paced digital world in the long term. However, the success story of the app so far is impressive and encourages us to think more deeply about our own business, perhaps by taking the following questions and points as a first possible inspiration:

  • How can content and form be sensibly combined to achieve the effect "one plus one is greater than two"?
  • How can a product localization strategy be implemented with sufficient flexibility and adaptability?
  • How can one's own business be simplified, made more effective and generally driven forward in a more targeted manner by relying on intuitive experience and trying things out - in keeping with the motto "less is more"?
  • How can one's own business be thought bigger and could it be useful to make one's own way of thinking more open and integrative, e.g. with regard to influencer marketing and technological innovations?
  • What role do sustainability-oriented, people-oriented technologies and applications play in future business?

Many influencers and B2C companies now use TikTok to market themselves or their products in a very targeted manner. For example, a famous Chinese Internet celebrity - Viya Huang - used TikTok live streams to sell a rocket launch service for $5.6 million in five seconds, 814 apartments in 20 minutes, 430,000 kg of rice in one minute and 65,000 books in a few seconds.

Unlike B2C, the B2B sector has a much higher entry threshold and few relevant target groups that can be reached via TikTok. Accordingly, most B2B companies are not so interested in using TikTok. This does not mean, however, that B2B companies should not at least consider whether using TikTok for their own business could be useful. For those B2B companies that help B2C companies in particular to better realize their marketing and sales through short videos and live streams, it might be worth taking a first little trip into the TikTok world.

However, it always takes courage to break through the existing limits of knowledge and ability when it comes to creating the first practice for trying out new things.

Unternehmensentwicklung
E-Mail ue@btc-ag.com