In what looks like a tit-for-tat response to Tencent’s hard yet failed catchup in short video sector by launching a series of homogenous apps, Chinese tech unicorn ByteDance is reportedly launching a WeChat-like social messaging app as the two companies are vying for a bigger pie in the country’s social media sector.
Local Chinese coverage said last weekend that ByteDance had acquired domain names including flipchatapp.com and flipchat.cn in preparation for the launch of its messaging app, named FlipChat, or飞聊, literally meaning “flying chat” in Chinese. The company hired away some WeChat employees to work on this secret project.
Beijing-based ByteDance runs some of the most popular Chinese news app and short video apps, including Toutiao and Douyin (known as TikTok outside of China), which are posing substantial threats to Tencent’s social media dominance.
Tencent’s social media supremacy hasn’t been seriously challenged for a long time, until ByteDance came to the battleground with its short video apps – including Douyin, Huoshan and Xigua – that target different segments of users.
Douyin swept through the Middle Kingdom with its creative and eyeballs-grabbing short videos uploaded by amateurs as well as MCNs, consumed by a whopping 500 million monthly active users (MAU) as of mid-2018. The app’s rapid rise rattled the nerve of Tencent, which has made a series of attempts – such as resurrecting Weishi and rolling out a long list of video apps – including Intoo, Sukan, Shanka, etc – to catch up in a sector now ByteDance tightly gripped.
Besides the short video triumph, ByteDance apparently has a bigger ambition for China’s online social market, for instance, online messaging, a market currently monopolised by Tencent through WeChat.
The rumoured launch of FlipChat is not ByteDance’s first assailment on Tencent’s WeChat. The company was reportedly beta testing an enterprise IM Lark earlier this year. An internal staff told media at that time that “we have been testing the product internally for a year… but we don’t know when it’ll be commercialised (for external use).”
Lark has not made a splash in China’s enterprise messaging market yet. However, the minor hiccup isn’t deterring the content aggregator from trying again. And this time, instead of outflanking WeChat from the enterprise angle, ByteDance is entering into a face-to-face competition with WeChat on the consumer front.
Tencent’s WeChat has a 1 billion MAU as of now.
Ambition or delusion
As one of the best-funded unicorns in China, ByteDance is all but no lack of money. According to public information, the company has raised more than US$3 billion in six rounds of financing with a $75 billion valuation price tag, making it the highest valued tech company on a list compiled by market researcher CB Insights ranking global tech unicorns.
Probably the only thing that could dwarf ByteDance’s glamorous valuation is its own ambition.
Though the company is mostly recognised by its Toutiao news aggregator and Douyin/TikTok short video apps, both are runaway successes domestically and globally (for TikTok), it doesn’t sit on the laurels.
Underpinned by its top-notch A.I. and machine learning technologies, it has either self-developed or acquired a wide array of mobile apps that do not always complement each other or have little if not zero synergies amongst each other.
On the consumer side, there is one Q&A app Wukong Wenda (think of something like Quora or Stack Overflow), an e-commerce service Fangxingou, a stock trading app Namei Stock, a cloud-based photo album app Shiguang Album, etc.
On the enterprise services side, there are cloud-based time management, document sharing and team collaboration tools.
Outside of its home market, the company also has stakes in India’s Dailyhunt and Indonesian BABE; both are Toutiao-like content aggregators for local markets.
In addition to a sprawling array of apps and services, the company is doubling down on A.I. which is its core competence.
The Information reported recently that the company is setting up its venture capital fund of RMB10 billion (US$1.4 billion) specialising on artificial intelligence and media content. Part of the fund, around RMB2 billion (US$289 million) will be out of its own pocket with the remaining portion to be raised from local government-led funds and national investment banks.
David Li Xuelin, founder of Nasdaq-listed live streamer YY, is already placing his bet on FlipChat that the app will hit the jackpot. Though not everyone is as optimistic as he does.
A source close to Tencent told 36Kr, our parent company, that “FlipChat isn’t going to pose a real threat to WeChat… some companies started to have the delusion that triumph will be subsequently coming along after one or two product successes.” This person went on to explain that “It’s easy to have cutting-edge technologies, but social isn’t just about technology, it concerns things beyond tech.”
The most recent challenger to WeChat was an app dubbed Zidan Duanxin, meaning bullet messaging, which billed itself as “as fast as a bullet” for efficient communication.
The app managed to gain a warm initial reception, earned it the top place on the free downloads chart on Apple’s China app store for a few days after its official launch in September, but the momentum died down quickly, making it the latest toll in China’s social messaging market.
Editor: Ben Jiang
Winner, winner: Early StageWinner, winner: Early Stage
Indonesian fisheries e-commerce startup Aruna wins Alipay-NUS Enterprise “tech for good” challengeIndonesian fisheries e-commerce startup Aruna wins Alipay-NUS Enterprise “tech for good” challenge
Indonesia voted. What’s the incoming government’s biggest digital economy homework?Indonesia voted. What’s the incoming government’s biggest digital economy homework?
Acquisitions are a way to grow: Carousell co-founder and CEO Quek Siu Rui with an outlook post-Naspers dealAcquisitions are a way to grow: Carousell co-founder and CEO Quek Siu Rui with an outlook post-Naspers deal
Woman brings JD founder Richard Liu to Minnesota civil court, accusing him of rapeWoman brings JD founder Richard Liu to Minnesota civil court, accusing him of rape