ByteDance aims to get a piece of the action in recommendation where red is in the leading place
Douyin, the Chinese version of TikTok under tech giant ByteDance, officially launched a brand-new recommendation mobile application named “Kesong” (Chinese: 可颂) on July 8, 2022.
Recommendation is an indispensable factor of the online economy, which is known as "seeding" or zhongcao in Chinese. A person is seeding when he/she recommends and shares a product or experience they have which makes users have a feeling of "I like it".
According to the research report on recommendations on three major platforms, 74% of users have bought products which were previously recommended by others, and over 80% of users will complete the purchase within a week after being recommended.
A bunch of tech conglomerates such as Alibaba (BABA:NYSE), Tencent (0700:HK), Meituan (3690:HK) all launched their own applications, aiming to share the profits in this field. Also, ByteDance is not resigned to playing second fiddle.
However, this is ByteDance’s fourth attempt. Early in 2018, it launched an app called “Xincao” (Chinese: 新草); in 2021, a new function of recommendation through pictures and texts was promoted inside Douyin; in 2022, the first-level entrance of recommendation was tested again.
Kesong, designed as a graphic content community, is similar to Red — a lifestyle platform which integrates community, content and commerce. The latter is often described as an "Instagram-meets-Pinterest-meets-Amazon" platform.
With a masonry layout of the double columns, Kesong presents recommended feeds on users' homepages, which also helps the newcomer to further divide user groups, cultivate consumption habits, and form a stable recommendation environment.
Different from Red, Kesong supports one-key login with the account of Douyin, which enables the data sharing of the former posts and account information.
The reason why big names are betting on the recommendation industry is that it is critical to consumption conversion and monetization. Take Red as an example, its revenue composition includes advertising and e-commerce. From the data of 2020, Red’s advertising revenue was USD 600 to 800 million, accounting for 80% of the total revenue; e-commerce GMV topped USD 1 billion, accounting for nearly 15%-20% of the total revenue.
The launch of Kesong by ByteDance shows its ambition of the recommendation economy, and it may work to provide an effective monetization channel for Douyin's two major businesses — interest in e-commerce and local lifestyle.