TikTok accelerates global E-commerce expansion.
According to a recent memo disclosed to its investors, ByteDance’s revenue soared by more than 30% in 2022, exceeding USD $80 billion. In 2021, ByteDance's revenue was approximately USD $60 billion, an increase of nearly 70-80% compared to 2020.
Domestically, ByteDance competes with companies such as Alibaba, Tencent, and Meituan, all of which were competing for consumers' attention and willingness to pay under the changes in the epidemic in recent years. Additionally, as a result of the economic downturn, each company is taking unprecedented cost control and efficiency enhancement measures. Specifically, Tencent's fiscal year 2022 revenue is CNY 554.6 billion, a 1% decrease compared with CNY 560.1 billion in the fiscal year 2021. At this pace, ByteDance will soon surpass Tencent in revenue in the next fiscal year 2023 without splitting the business.
Internationally, ByteDance's double-digit growth has surpassed most of the global Internet giants, including Meta Platforms and Amazon.com. Meta's revenue in the fiscal year 2022 was USD$116.6 billion, a decrease of 1% compared with USD $117.9 billion in the fiscal year 2021. Throughout 2022, Amazon's net sale was USD $514 billion, a year-over-year increase of 9%.
With TikTok's future in the US hanging in the balance, this article takes you through ByteDance’s two latest progress in the overseas market - Tiktiok Shop and Lemon8, shedding some light on the world’s most valuable private tech firm’s competitive outlook on the global platform.
Southeast Asia- Tiktok Shop
In the short-form video sector, TikTok, as the leader, has 1.3 billion monthly active users around the world. Not only is it still growing rapidly, but it has also started a new exploration in the revenue model, and started a new exploration in the revenue model, bringing the domestics model such as "live streaming commerce (Chinese: 直播带货)" into the system and promoting it overseas.
Statistics show that in 2022, the Gross Merchandise Value (GMV) of TikTok’s live streaming commerce for the whole year exceeded USD 4.4 billion, a two-fold increase from 2021. At the same time, starting from April 2022, TikTok has officially launched a cross-border e-commerce business in Thailand, Vietnam, Malaysia, and the Philippines, and its GMV in the first half of the year has exceeded US$1 billion.
In February 2023, TikTok Shop (Chinese: TikTok 商城) has been launched in Thailand and the Philippines and will be opened to more Southeast Asian countries in succession, providing cross-border merchants with a new scene for bringing goods. This is also the full implementation of the TikTok Shop in Southeast Asia after first trying it out in Indonesia in October 2022.
ByteDance chose to first launch the TikTok Shop business in Southeast Asian countries such as Indonesia, Thailand, and the Philippines for a good reason. In the past year, Southeast Asia is undoubtedly the fastest and largest growing market for TikTok Shop. According to third-party data, Indonesia has the highest GMV in the whole year by country and has become the largest market among TikTok e-commerce’s opened sites so far, while the Philippines will become the fastest-growing market in the fourth quarter of 2022. By the end of 2022, among the six cross-border business sites that TikTok has opened globally, five were in Southeast Asia.
Based on the interface shown on the official website, TikTok Shop is highly likely following the model of Douyin Mall (Chinese: 抖音商城). It places the search box in the most prominent position at the top of the page, under which are "New customer offer" and "Flash sale". The main part of the page is a double waterfall of products commonly used by traditional e-commerce companies such as Tmall (Chinese: 天猫) and JD.com, presenting mainstream cross-border business categories such as beauty makeup, women's clothing, and 3C electronics, as well as special category areas such as Muslim Products launched for specific countries/regions.
Using Douyin as a reference point, TikTok’s short videos and live broadcasts can stimulate users' potential interest, after which they can make the transaction in the individual TikTok shop (similar to the window display and order payment of Douyin Store (Chinese: 抖音小店)). This is the common “product to people’ link. However, the setup of TikTok Shop mall has opened up the link of "people to product’. In other words, while the short videos and live broadcasting capture consumers' unplanned needs, the TikTok Shop’s shelf-type, all-category-coverage e-commerce satisfies customers’ planned needs. The online mall will help TikTok attract more consumer groups, improve the user shopping experience, promote traffic conversion, as well as welcoming more merchants and products.
US – Lemon8
Last week, multiple news media reported that Lemon8, the ‘lifestyle community’ app created by ByteDance, made it into the top 10 most downloaded apps on the US App Store.
In foreign media and industry experts' eyes, its photo-heavy layout and peer-to-peer reviews suggest a cross-over product of Instagram, Pinterest, and Amazon, and often described as ‘Instagram rival’ or ‘ByteDance’s Plan B’ under the circumstance of TikTok’s potential ban in the US. For any Chinese, it strokes a resemblance to Xiaohongshu (Chinese: 小红书)， the Chinese social commerce platform with 260 million monthly active users, the ‘lifestyle bible’ that youngsters to share life hacks on everything from dieting to dating.
According to app intelligence provider Apptopia, Lemon8 debuted on iOS and Android in March 2020 in Japan and has since gained 16 million global downloads. It is estimated that the app currently has 4.25 million monthly active users.
ByteDance decided to launch Lemon8 first in Japan and later extend to Thailand due to their well-developed beauty, clothing, and home furnishing industries, while its official debut in the US and the UK in March this year further demonstrates its global ambition, as well as compensation for the potential loss during the TikTok crisis in the states. Still in its infancy in the US market, in order to acquire more high-quality users and content creators more efficiently, Lemon8 has adopted three major methods: advertising, leveraging social media, and creator incentives.
Hundreds of creators in the US have been sent outreach messages - “ByteDance, the parent company of TikTok, invites you to become a launching creator on their new Lemon8 platform before it officially rolls out in the United States!” – inviting them to sign up and many have done so, which will help Lemon8 populate the platform with a sea of content this spring.
According to The Straits Times report, once Lemon8 selects the initial creators in the US, they will receive guidance on topics and aesthetics to post throughout April's content accumulation; phase; in May, the app will focus on user and creator following accumulation; in September, it will focus on commercialization opportunities, such helping creators make money from brand and agency deals, and potentially all forms of advertising.
ByteDance is one of the domestic companies with the most experience in globalization efforts, and TikTok is a rare pan-entertainment application that has truly entered the global mainstream market. With its latest overseas effort showing progress, we might be seeing the TikTok raging success being replicated.