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2 The Success of TikTok

Tang Mingfeng

Abstract :TikTok is one of the most popular short-video sharing platforms in the world.It originated from Douyin,the Chinese version of TikTok.Both Douyin and TikTok are under the same umbrella of ByteDance,which was created in a four-bedroom apartment in Beijing in March 2012.TikTok was launched outside the mainland of China in November 2017.It became the most-downloaded social software in AppStore in January 2018.The success of TikTok results from its cutting- edge algorithm,funny and interesting content as well as efficient dissemination of short videos and live broadcasts are made available to all types of reviewers.The external environment before 2019 was also in favor of the development of short-video sharing platforms including TikTok.However,the operation of TikTok faces challenges in foreign countries after 2019,particularly in the US TikTok has taken a series of actions to handle the challenges.

Key words :short video;ByteDance;challenge;management environment

Part Ⅰ Case

As technology in mobile communication continues to develop from 3G to 5G,its fee has become more affordable,and internet services have become accessible everywhere.Short videos have gained popularity among people acquiring information and enjoying entertainment.The boom in the short video industry in the world is a result of the following aspects:

(1) An increase in access to the internet and the increase in social media users.In January 2022,the global total internet users were 4.95 billion with a growth rate of 4% over the past year.5.31 billion people on the planet were unique mobile phone users,1.8% higher than that of last year.4.62 billion people with a growth of 10.1% were active social media users.By December 2021,1.032 billion Chinese had been connected through the Internet.The internet penetration rate reached 73%.Currently,1.029 billion people use mobile phones as their Internet terminal,975 million people are internet video users,and 934 million people are short videos users.In China,the older netizens aged 60 years and above numbering 119 million have an internet penetration rate of 43.2%.

(2) The advantages of the short-video platform are many:among them are a wide audience,faster information dissemination,diversified forms of communication,free from time and space restriction,low content- creating barrier,fragmented entertainment time,high interactivity,live broadcasts,accurate and customized recommendation,creativity inspiration,etc.These advantages cater to the living habits of the public in the present day.Many users would like to create their own videos or reproduce popular videos to attract other users and gain fans.Watching or creating short videos has become a lifestyle for many people.Those born after 2000 as well as those born between 1990 and 2000 particularly favor short videos.As more and more old people retire and have more leisure time,many have become short video lovers.Besides individual users,companies,universities,governments and other entities have also become short video users.Numerous official accounts including those opened by key opinion leaders (KOLs),key opinion customers (KOCs) and celebrities (e.g.famous film stars,singers and scholars) operate well on short video platforms.

(3) Comparatively loose regulations on social media before 2010.Global social media tools like Facebook,Twitter and Instagram were founded in 2004,2006 and 2010 respectively.Even though the US Department of Homeland Security has set up a Social Network Monitoring Center to monitor social media information,the Center has begun routine monitoring of social networking sites,online public forums,blogs,and messages boards through its branches since June 2010.This was followed by the European Union,UK,Germany,China and other countries issuing a series of regulations to monitor social media in response to the public's concern on transparency and data protection.In 2019,China's cyberspace administration proposed to strengthen its regulations on the security of social networking platforms.

(4) The slowing down of global economic growth.Annual global GDP growth kept going downward,declining from 3.3% in 2018 to 2.6% in 2019 due to the rising trade barriers,renewed financial stress,and sharper-than-expected slowdowns in several major economies.The outbreak of Covid-19 in 2020 heavily affected the world economy with a negative GDP growth rate of-3.1% due to the closure of factories,disruption of global supply chain,rising transportation cost and others.In spite of a strong rebound in 2021 thus attaining a growth rate of 5.9%,the global economy has slowed down since 2022 amid fresh threats from Covid-19 variants and a rise in inflation,debt and income inequality.A downward trend in economic growth has caused a decrease in new job creations and a higher unemployment rate.People who lost their jobs have to think of new ways to earn money for their survival.TikTok thus offers opportunities for people like artists to develop their imagination and creativity and create commercial value.For example,more than 5 000 artisans sell their hand- made souvenirs through Douyin.Over 90% of them can have a steady income in this way.Self-quarantine at home during the Covid-19 also allows people more free time to review and make short-videos.

Douyin and Kwai (known as Kuaishou in China) are without doubt the two giants of the Chinese short video industry.These two platforms own the majority of both the high- quality content creators and users.The cliche “ fans are the treasure” holds true of this industry.It is obvious that the cost of switching to another platform is unbearably high.Because of the attention attached on the two giants,it causes their users to become particularly loyal.Both Douyin and TikTok are under the same umbrella of ByteDance,which was created in a four-bedroom apartment in Beijing in March 2012.Douyin (the Chinese version of TikTok) was launched in China in 2016 and quickly became a popular short-video sharing platform.By the end of 2021,it had 710 million daily active users and was one of the two most popular apps in China.In November 2017,TikTok was launched outside of the mainland of China.In August 2018,TikTok merged fully with musical.ly.thus unifying the two platforms.In January 2018,TikTok became the most-downloaded social software in AppStore.Just 4 months later,according to The New York Times,TikTok's global active users surpassed 500 million.TikTok continued to gain its popularity among American users in 2019 and 2020.At the beginning of 2020,TikTok's American users on average spent 1 hour on it.By contrast,American users spent less than 50 minutes on Facebook.Thanks to its cutting-edge algorithm,funny and interesting content as well as efficient dissemination of short videos and live broadcasts were made available to all types of reviewers.TikTok,known as Douyin in China,has become one of the most popular short-form video platforms globally.The annual users of TikTok attained 1.466 billion in 2021.Nowadays,TikTok is available in over 150 countries with over 1 billion users and has been downloaded over 210 million times in the United States alone.

However,the great success of TikTok in the United States has caused anxiety in Trump's administration.Donald Trump implemented the “ America First ”strategy when he took over as President of the United States.In September 2020,Donald Trump announced on security grounds that unless TikTok sold its properties in the US,it would be banned in November 2020.At that time,daily active users of TikTok in the US numbered more than 100 million.Before the order was activated,TikTok sued the US government and the order was suspended twice on 28th September 2020 and 30th October 2020.During the process,TikTok came up with a plan.TikTok would establish a partnership with Oracle,the biggest software company enterprise.Oracle would cooperate with TikTok as its “reliable tech provider”.The order from Donald Trump was finally and officially postponed by lawyers in December 2020.As data from the Sensor Tower demonstrates,in January 2021,TikTok maintained its popularity.It ranked second,occupying 17%.

It is worth mentioning that on 9th June 2021,at local time,President Biden of the United States rescinded Trump government's ban on the two social media applications,TikTok and WeChat,and decided to issue an administrative order with a broader scope of application reviews operated by foreign countries to replace it..In fact,in order to deal with various allegations and crackdowns on the pretext of security,TikTok Group has taken a variety of measures,including storing US user data on Oracle Cloud to eliminate concerns about data integrity from relevant US regulators.A backup is placed in Singapore and no US user data is stored in China.TikTok has never shared user information with the Chinese government.The United States,however,took advantage of its world leading position to suppress Chinese enterprises with security issues.It is reported that the 1.7 trillion federal spending bill signed by US President Biden also contains regulations prohibiting the installation of TikTok in the electronic equipment of the federal government.In addition,some local state governments in the United States also introduced similar local laws.Mao Ning,the spokesman of the Chinese Foreign Ministry,said that spreading false information and using it as an excuse to suppress relevant Chinese enterprises has become a common practice of the United States.China firmly opposes this and hopes that the United States will take a more responsible approach to respect and abide by the international rules of fairness,openness and non- discrimination.Meanwhile,the TikTok short video team is paying close attention to the user information security protection works.It not only leads the industry in ensuring the transparency of user privacy policies and guaranteeing users.right to know about user information,it also strengthens user information protection.TikTok has adopted technology and management ability such as the use of encryption technology,and this is no less than that of its industry peers;it also ensures anonymous processing and other reasonable and feasible means as well as the best commercial efforts to protect user information security.At the same time,TikTok's short video has also established a special security department,security management system and data security process to ensure network information security.At present,“TikTok” has passed the evaluation and filing of national information security level protection (Level III),and passed the international authoritative ISO 27001 information security certification.To strengthen the trust given by users and regulation authorities,TikTok has committed to take further actions to protect user information.

After knowing the external management environment of TikTok,it is necessary to have a look at its internal situation.TikTok's parent company is ByteDance.ByteDance owns an extremely flat organizational structure:1-14-91.Zhang Yiming,founder and CEO of ByteDance,directly supervises 14 top managers,and these 14 top managers lead another 91 middle managers.

As a product of ByteDance,TikTok inherits many of its successful non-R&D innovation results.For example,one of the core competencies,the recommendation algorithm,is based on machine learning and big data processing.The marvelous performance of Today's Headlines has proven both the effectiveness and efficiency of this algorithm.Every single person has their customized home page according to their liking since“there are a thousand Hamlets in a thousand people's eyes.” Besides algorithm,the middle platform of ByteDance,which was created by Alibaba initially,is also the key to TikTok's success.The setup of the middle platform is to summarize common needs and then provide them with a pack of solutions.There are a few“ big” middle platforms (User Growth,Algorithm,etc.) and several“small” middle platforms (Livestream,Music,Special Effects,etc.) in the whole system.Big ones serve as the foundation,and small ones are like bricks supporting specific products like TikTok or Today's Headlines.Middle platforms are the allocation of certain resources,providing help and guidance to the frontal teams.This organizational structure allows frontal teams to make brave attempts on their thoughts,cultivating a unique organizational culture which are direct,positive,open,creative,inclusive,etc.From the managerial aspect,managers do not eliminate all disagreements since some are constructive ones;in fact,they welcome disagreements.Managers can accept ambiguity,tolerate impractical ideas,risks and conflicts,offer minimum external controls,focus more on ends rather than means and provide positive feedbacks.

TikTok has realized the huge resource advantage by virtue of its open multi-functionality,open business capability,rich solutions and perfect service support.In addition,its huge customer pool,multi-industry cooperation ecology,and multi-terminal service support allow TikTok to have strong cooperation benefits.As the largest unicorn Internet enterprise,TikTok's position in the Internet is obvious to all.However,TikTok still needs improvement.It can't be described as mature yet.Positive and healthy spirits need to be advocated more.For example,some uploaders waste tremendous food in order to pursue exaggerations.In any aspect,this phenomenon conveys wrong,misleading values.Regulations and supervision need to be further complemented.The focus should be on the quality of video contents rather than the number of viewers.The problems mentioned above are what TikTok should consider solving next.

Part Ⅱ Discussion Questions

Question 1: According to the case,what external environmental factors do you think make TikTok successful?(Use the PESTGD Model to analyze)

Question 2: Why did the US government prohibit all devices managed by the United States House of Representatives to using TikTok?What should TikTok do to handle this restriction?

Question 3: What kind of organizational culture does ByteDance have?Please describe it.

Question 4: What do you think the situation of the short video industry is now?Please use Michael Porter's Five Forces Model to address this question.

Part Ⅲ References

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[3] JUN G.Research on the marketing innovation of “Live+Short Video” in the culture and tourism industry in we media era [C].E3S Web of Conferences,2021.

[4] SHEN J J.Analysis on the trend and development of future short-videoindustry [C].Proceedings of the 2022 7th International Conference on Social Sciences and Economic Development,2022.

[5]陈青.传统手工艺文化抖音短视频传播策略探究[J].重庆科技学院学报(社会科学版),2021 (4):90-95.

[6]佚名.封杀抖音国际版!美国政客急了:这是中国毒害美国的“精神鸦片”[EB/OL].(2023-01-03)[2024-01-20].baijiahao.baidu.com/s?id=1753965405200747523&wfr=spider&for=pc.

[7]佚名.重视用户信息安全抖音获南都“年度隐私政策透明奖”[EB/OL].(2019-01-21 )[2024-01-20].baijiahao.baidu.com/s?id =1623258117253286287&wfr=spider&for=pc.

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