About This Source - Bloomberg QuickTake: Now
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Bloomberg Quicktake: Now published this video item, entitled “TikTok Owner ByteDance Eyes $185 Billion Business Ahead of IPO” – below is their description.
ByteDance, the owner of TikTok, is mounting a challenge against Alibaba in the e-commerce arena. Zhang Yiming built ByteDance into the world’s most valuable private company via a string of blockbuster apps like TikTok that challenged Facebook and other incumbents on their own turf.
The 38-year-old AI coding genius, searching for ByteDance’s next big act, has set his sights on China’s $1.7 trillion e-commerce arena. The co-founder has hired thousands of staff and roped in big-name sponsors like Xiaomi impresario Lei Jun to drive what he calls his next “major breakthrough” into global business — selling stuff to consumers via its addictive short videos and livestreams. That endeavor will test not just Zhang’s magic touch with app creation and ByteDance’s AI wizardry, but also investor reception ahead of one of the tech world’s most hotly anticipated IPOs.
His startup is already starting to make waves in an industry long controlled by Jack Ma’s Alibaba Group Holding Ltd. and JD.com Inc. It sold about $26 billion worth of make-up, clothing and other merchandise in 2020, achieving in its maiden year what Alibaba’s Taobao took six years to accomplish. It’s shooting for more than $185 billion by 2022. Douyin, TikTok’s Chinese twin, is expected to contribute more than half of the firm’s $40 billion domestic ad sales this year, driven in part by e-commerce.
“Short video platforms have so much traffic that they can basically do any business,” said Shawn Yang, managing director of Blue Lotus Capital Advisors. “Douyin is not only in ads, but also live-streaming, e-commerce, local life services and search. This has a lot of room for imagination.”
A burgeoning e-commerce business could help the firm surpass its $250 billion valuation when it goes public, countering concerns around Beijing’s crackdown on the country’s internet behemoths. Preparations are said to be underway for a listing that would be one of the world’s most anticipated debuts. The startup is working with advisers on the offering and is choosing between Hong Kong and U.S. as the listing venue, people familiar with the matter have said. While ByteDance won’t handle sales or merchandise itself, it hopes to sell more ads to merchants, boost traffic and take a cut of business.
The internet giant is a late entrant to China’s social commerce scene, where influencers tout products to fans like a Gen-Z version of the Home Shopping Network. The format, pioneered by Alibaba as a marketing tool in 2016, developed a life of its own last year when Covid-19 spurred demand for at-home entertainment. Last year, Alibaba’s Taobao Live generated over 400 billion yuan ($62 billion) of gross merchandise value and Kuaishou Technology’s social platforms hosted 381 billion yuan of transactions, more than double Douyin’s.
ByteDance is counting on its artificial intelligence-driven, interest-based recommendations to help its e-commerce business catch up. In a splashy coming-out party for the one-year-old business last month, executives explained that the company intends to replicate its success with using AI algorithms to feed users content in online shopping. By scrolling an endless stream of social content, now connected with physical goods more than ever, Douyin users won’t be able to resist their impulse to buy, they said.
ByteDance’s ambitions aren’t limited to Alibaba. The firm has also started to let users book hotels and restaurants through Douyin, offering lifestyle services similar to super-apps like Meituan and Tencent’s WeChat.
Douyin’s e-commerce foray in China may offer a roadmap for TikTok, which has begun testing the waters in online shopping through tie-ups with WalMart Inc. and Canadian e-commerce firm Shopify Inc. Back in December, Zhang told global employees that e-commerce, when combined with live-streaming and short videos, offers an even bigger opportunity outside China, according to attendees who asked not to be identified. The company has also been quietly building a team of engineers in Singapore to grow TikTok’s nascent e-commerce operations.Bloomberg Quicktake: Now YouTube Channel
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Hong Kong, officially the Hong Kong Special Administrative Region of the People’s Republic of China (HKSAR), is a metropolitan area and special administrative region of the People’s Republic of China on the eastern Pearl River Delta of the South China Sea. With over 7.5 million residents of various nationalities in a 1,104-square-kilometre (426 sq mi) territory, Hong Kong is one of the most densely populated places in the world.
Hong Kong became a colony of the British Empire after the Qing Empire ceded Hong Kong Island at the end of the First Opium War in 1842. The colony expanded to the Kowloon Peninsula in 1860 after the Second Opium War and was further extended when Britain obtained a 99-year lease of the New Territories in 1898. The whole territory was transferred to China in 1997. As a special administrative region, Hong Kong maintains separate governing and economic systems from that of mainland China under the principle of “one country, two systems”.