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The backstory: We've heard plenty about TikTok, the app that's all the rage among Gen Z (and some millennials). Behind TikTok is the Chinese tech giant ByteDance, which has quickly become a world force since its inception in 2012. ByteDance, known for its algorithm-driven content recommendation, expanded beyond TikTok into platforms like Toutiao and Douyin (the Chinese version of TikTok). But TikTok has faced global scrutiny over security concerns, leading to bans in countries like the US, Canada, the UK, New Zealand, Australia and Nepal.
Douyin, with around 600 million daily users, has become a major player in Chinese e-commerce, rivaling other Chinese tech giants like Alibaba and Tencent. Douyin transformed into a comprehensive platform, offering everything from purchases to meal deliveries. In 2022, ByteDance's earnings even matched Tencent’s at US$80 billion.
More recently: Last September, the video platform expanded its reach by launching TikTok Shop, an online marketplace targeting the US e-commerce market. Meanwhile, ByteDance is eyeing big investments in Southeast Asia, which is home to over 630 million people – and half are under 30, making it a crucial market for TikTok.
Last month, the Wall Street Journal reported a nearly doubled operating profit of nearly US$6 billion for ByteDance in the first quarter of 2023.
The development: ByteDance's second-quarter 2023 report, disclosed by The Information and anonymous insiders, reveals a revenue spike for ByteDance to US$29 billion, marking a 40% increase from the previous year. The report also takes a deep dive into ByteDance's first-half sales, hovering around US$54 billion, with the figures slightly trailing behind Meta’s US$60.6 billion.
ByteDance is a private company, so it doesn’t have to release its financial details. But if this report is correct, that means the company outperformed Tencent and Alibaba, two other Chinese tech giants, in the same period.
“We're going to invest billions of dollars in Indonesia and Southeast Asia over the next few years," said TikTok CEO Shou Zi Chew at a forum it organized in Jakarta back in June.
“We have high exposure for our products by using TikTok Shop,” said Muhammad Zidan, a merchant who uses TikTok Shop, about Indonesia’s decision to ban e-commerce transactions on social media platforms. “The government should find a win-win solution because we will also experience a lot of losses. ... The ban will have a huge impact on us.”’
“Neither a ban of TikTok nor a divestiture of TikTok from ByteDance does anything to address national security concerns about data transfers,” said TikTok in a statement touting the benefits of Project Texas, TikTok’s response to questions about US national security concerns.