David and Goliath: Bytedance takes on WeChat
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A lot of people try to compare IT to snap chat, but I think it's actually Snapchat plus instagram plus doing or tiktok right poly in. So I think it's more than just nap chap, that's for sure.

So today, we are going to talk about a very new social messaging APP in china called dorchen, that's trying to do the impossible, which is take on we had so for listeners don't know which is the social messing APP in china and has over a billion monthly active users. So pretty much everyone in china uses IT. It's talk to their friends, also buy things because IT has a mobile wallet. So if you take a cab, you goodbye groceries, you go the restaurant. All these things can .

involve is actually very interesting considering which have got a more dominating position in can ever dream of in the west. And this actually feels like one of those David versus school life fights with a small start up fighting against the dominating ten, a position that no one thinks you can beat.

O so we all say welcome to digit china. I am actually.

yeah k.

welcome to china vines and created together with radio j and.

So according to various studies, china's gaming in the .

street is now, in fact.

the largest in the world.

You may know messaging.

I told the chess chinese outside ma ine's property, only a break place.

so probably never to show me.

Yes, it's take, it's claimed, major deal over in .

china chinese test, given within eight point billion dollars position to buy a major stake, a super sell, forty two .

point three billion dollars in sales clock by a chinese e commerce site in one wild day.

So understand more about the social trends driving the development of doors. Shane, we spoke to Ashley, who is an expert and watches the social media space in china very closely.

Hi guys. My name is I run a digital agency in hong kong and a training company that helps marketers to understand chinese social media.

So doorman has been online for about a month now or A A bit more. And after playing around with IT a little bit, considering I have no friends in tiktok space, you know, because I don't use tiktok daily, I really had a hard time understanding what makes this APP I actually good and how I can compete with reach out.

said we honest, like when I did open the APP, the U I and the U. X. Is still pretty crappy and maybe it's because it's only been online for a month to look like first pulled out, get user feedback and just IT.

The dog at its core is a video sharing APP. So maybe not that difference from tiktok. In some ways, there's a huge button.

You can record short videos using that so you can do like, uh, what you ate for breakfast, your b today, whatever people like to share. And these videos only last for seventy two hours. And then there's another part, which is social messaging, which is pretty shape forward.

You just message your friends. And then the last part is called the world. And as we can browse public videos, so stuff that people are willing to share with strangers.

And there are features that are interesting and a bit unique, but you only discover them through chatting with other people, just stuff if you're not really actively tiktok, for example. But I was messaging a friend, and I I realized that whenever you type a word, I will suggest a corresponding sticker for IT. So for example, if you write like ha ha, a sicker different emerging and memes and sicker related to haha or laughing will pop up. I haven't use IT enough to know whether now this is an annoying feature or if it's cool, but I do think it's interesting. You know, they're taking the trend of Young people using a mog s very seriously or at least are experimenting with IT.

If we make a direct comparison to we chat, what IT feels like for when he comes to the chatting experience in writing text, they try to make IT a little bit more fun than interactive to probably appeal to the Younger target audience. And for the entire APP itself, they also are trying to appeal to a Younger targets audience and therefore kind of videos on snap chat. I type of features are more central inside of only text.

an audio yeah. I think the opportunities that are kind of presented by the Younger generation china is pretty important because WeChat for people like you and meet time no longer Young. So at least not in the world of digital users.

I think we is quite hard to convert us um and it's not that we have to pick one of the other, but I think it's harder for us to a adopt to these new platforms. So I think the Young generation is quite important. And actually, when assigned actually SHE pointed that this out as one of the key trends um that's opening up space for opportunities .

for apps like doshin. In terms of door, right now, they are trying to launch a new APP based on videos and social. They are trying to make a personal so it's not just random people you know commenting on the other's content, but people that you know.

So essentially, they want to relocate this personal tight uh, relationships from which onto dorland. But this is still very far away. So that is why they also started with a Younger market, Younger demographics to they try to release their social pressure because Younger people do not want to publish something that could potentially, in a couple of years from now, part their reputation. They don't want their parents to figure out they don't want, right? So if you publish something and in seventy two hours, it's gone and you are the on the person who can see IT and excess IT and you can also delete and have control over that's attractive to Younger generation.

If you go on a dorchin profile, all you will see are these very famous disappearing stories. Stories has become the swear genre term for disapearance videos, right? So all you see your stories, there's no permanent feed of curated photos or videos like for tiktok.

You do do you have this? So if you like a social influencer, i'll probably have like a nice security collection of my videos. So if if someone goes on to my profile, they want to know what i'm about or my brand is, or why I should watch their videos, I see very clearly from their profile. But on doshin, because everything disappears, you have to constantly create content.

Basically, you share your life on the go without, you know, without over thinking IT. So you're having lunch, your your basically mapping a picture or video, and you put that out there. So you tell all your friends or whoever is watching you that all you're having healthy lunches of a cus on the able.

So IT basically takes a bit of um a bit of that um pressure off um interest of the quality of the content that you put out. So it's not about creating content. It's about documenting what's happening in your life. And people generally enjoy IT, especially those that have something to document and people that watch them, they love watching them because you know they see a real person going through his or her day.

Yeah, IT actually makes sense from so many different perspectives. Uh, number one, obviously, you know, if you ever want to compete with, we chat for any product that got mainstream usage, you need to find one vertical and go after IT first that make IT awesome, right? And from there you can probably grow.

So IT makes sense from, you know bite and perspective to go after Younger generation, considering, you know, the success of had with tiktok. But from the outdoor perspective also, I I really think as comments about social pressure make sense because for an example, you know, we usually refer to timetable. The tinder of china is just a copycat of tinder, but in the chinese society, with the Young people in not a tender like service actually means way more for the Young people, because IT is the same.

It's relieve social pressure. You don't have your mom calling you about if you found the date a yet, or anyone to marry. And instead you can, you know, kind of take power and control over your own life.

While tender in the U. S. Is literally just a tool that makes us more efficient to date, but without tender. In the united states, you still have a culture of dating and people talking to each other at bars, and you know, social happenings where you can actually meet people and IT feels will be the same thing if we are to compare snapp chat for Young people in the united states and the functioned fields for them versus a snapt type of product in china. And what that actually means for the Young people here.

Yeah, I think one of the big grapes people have that we are sometimes is that IT blend your work and personal life. So if you go on your moments or you know the term for which hots news feed, you'll see up from your co workers, people you ve met the world, like, for example, people that have interviewed, you know, inevitably at the moika, probably I see there's a like any social network is a bit harsh to delete people after you don't talk to them anymore.

So you kind of accumulate all these random people from your life, many of whom you don't speak to anymore, right? And when you go on your news feed, that's all together. And if you post something, you have to do something very specific to make sure only certain people see you.

So I know some people will tag people and put them in a different groups in which are. And then you can say i'm going to share this, but only people people from my family group can see IT. Yeah but I think um it's quite annoying, right? So I think that because IT disappears, there's less burden or you know you don't have to think as much about creation or how people will perceive IT.

IT makes more sense for Young people, because if you look at U M, S. User here, I mean, honestly, we have pretty boring lives. We are becoming older. We have jobs. We don't do anything.

And especially we didn't grow up in that type of the social media environment where we actually want to share a lot of dancing videos and funny stuff, you know. So there is less things from our personality that would collide with the kind of image or perception we need to have because of our professional lives. But for a Young person, let's A A university student that just, you know, went that into the professional life, started working at K, P, M, G or whatever. You know what they do on in the personal life and the K, T, V songs they and the content they like is so different verses what you want your colleagues at K, P, M G to see.

Yes, so so far what we've mentioned isn't unique at all. You know, like stories that's pretty ubiquity in western social media, I think is actually fascinating that he hasn't taken off earlier in china, right? Like snapped launched stories in twenty thirteen is twenty nine.

And I think like the direct messaging, obviously not unique. But I think what is different is the A I capabilities and dorchin. So when I was speaking to actually SHE brought up a very interesting point. You know, he was taking a video of her colleague celebrating the birthday. So is like that typical scene where her colleague is sitting in front of her birthday.

And in dorchen, you can put music with the video that you pose, the story that you pose, which is very tiktok like, right? And I will suggest songs for you and actually said that when he tried to upload this video of her colleague sitting from the birthday cake, I think the first song that IT recommended was happy birthday. So that's pretty crazy, because I think that means that the APP recognize that IT was a birthday seen, and that that would be the .

most appropriate. Wow, that's crazy. That's like the things we've been talking about without having one hundred percent confirmation that, you know, tiktok probably has really good A I to understand the videos, to recommend the right videos for people to watch. But this is the next level of that and being able to, in more, less real time, figure out what type of video IT is and therefore, you make the user experience Better and make the content .

automatically Better. Yeah that makes me think again back to two years ago when, uh bite dance, which is the company behind tiktok and dorchen when bite dance had their AI conference in beijing um the head of the eyes lab talking about how image recognition is so powerful because its language agnostic. So even if we went in china and we uploaded a birthday scene like you're in the U S, as long as there is a cake with candles um and they recognize that, then they can they will probably recommend this happy birthday song and so they can tag similar content without having to process what people saying, which I think is really um really cool and also powerful for content creation.

Yeah this is bryant and this is the type of things that actually makes a company build immense, you know unique value and technology. I mean, the more I think about IT, the more IT feels like this is the main strength of the company. They have A I the understanding videos and images Better than anyone else.

And I think IT was interesting is that ashly then said that he tried later on to shoot a video where her colleagues were saying showing you required or happy birthday in chinese, and IT didn't trigger the same recommendation.

And I don't know if that means that the capabilities aren't strong enough or maybe he indicates that by dance is really strong or stronger and image recognition, but because it's been focused on video, um is voice recognition capabilities aren't that strong, which would mean that would make sense, right? Um visually wasn't yeah visually wasn't obvious that I was a birthday video IT was just audio. So I think that's pretty cool. And also, I guess a brief aside was that at the same conference the A I had my way in, he also had something like um it's a way to make use of all the data that the chinese market developed and apply outside of the market. So basically, you train the algorithm on chinese videos um but because images and videos are language nosy, you can use this for the world.

Yeah definitely this example just made my belief about bite dance being able to compete on the global stage you know much, much higher when they actually can implement their knowledge and technology into actual use cases.

So I think it's worth talking now a bit about the many because, to be honest, is very obvious as super early phase. And you know, one of the big downsides take out doesn't really have a good social network. IT doesn't have what people call social graph, so basically a map of people's friends and contacts and that's the core of any social message APP. They don't have that, which is what doshi is .

supposed to be yeah and if I translate these rights, they're trying to kind of do a snap at type of service with disappearing video OS as their main products, supported by instant messaging, of course, to actually build up the social network that can be leverage further.

right? And I also think that even the disappearing videos part has a bit of A A downside. And actually I think actually spoke about this and he made a good point because since I use insured m story so much, i'm kind of bias towards I really like the future, but SHE proud of a really good point.

It's not blogger friendly. It's not good for co else. And we know um from the of label, from the success of we chat or right now 小红 书， bloggers are so important in china to lead a certain behavior, to lead behaviors.

So yeah blogger are not there. Have they not motivated? Uh, that could be a problem at the same time, maybe people are actually GTA get used to that. They get accepted and they can enjoy IT.

On one hand, I think influences on micro influencers, I E, blogger or what not, are super important for the growth of the platform because they create good content. They create a stories that makes you know readers or listeners or what not actually sticky to the product and and stays there and come back for new, great content. But on the other hand, IT makes everything spare me.

For example, I really hate that of my week out, friends, moments experience. There are so many influencers of microinsurance cces on there that somehow has added me, and they're posting all these, you know, IT doesn't feel like real stories. He just feels like advertisement all the time.

And IT feels little bit like dad do. Is trying that angle right? They are trying to create a platform where you only communicate with your friends, nothing more. I I think they're enough platforms like that in china.

So basically, an argument be made has the perfect timing because you have tiktok, 有 小红 书， red, you have weak chat, you have weibo, you have all these platforms and even t, mall and J, D, has a lot of contents platforms. That's only about one to many communication. I someone that really knows make up, they do videos or content, was not for you to learn from them, get inspired.

A reaction to that should be that users also want to have a more private space where they want to communicate with only their friends, where they don't need to feel judge. I need to think about the quality of the video and the content they're posting and actually just community them in a more efficient way. I really feel that the product is very different versus WeChat. Like can we really claim this being we chat competitor part .

me feels that the social message part is overstated. But um they do have a wallet feature inside doors shine so you can link your bank card um you can send red envelopes. So people saying one of the reasons why they launch the january is because they want to catch chinese new year, which was early february this year.

So they could do a bunch of red envelope campaigns like basically incentivizing you to bring your friends in um something else which is also in take endowing probably tiktok as well, is the button that lets you kind of migrate some reach out contacts over. So basically share the special code and a witch attack group and everyone can copy that. And then like open IT, indoor shine and those those contacts are imported anyway, like that is specifically about migrating a reach out context, right? The we chat has tried to block knowing links inside the APP so much to what I just tell about. So I think it's probably only fair for doshi need to do something so pointless like leave rica and come here, you know yeah I mean.

like I think which hat feature is a direct competitor to take talk. They are trying to grab users and they are a bit late or to the game. But you know, they should try because you're losing a lot of users to tiktok or 抖 音 right now。 And I think the right way to go for dog would literally be that, thanks to tiktok, they have built the user behavior among Young people that the first thing you do is to snap a video, is not take a photo that instagram educating the west, or it's not writing a message that which had educated the previous generation. And based on that new user behavior that they were educated hundreds of millions of Young people to do, they are just launching a more private or personal type of APP where you use that same behavior, but to use that in in deeper communication with friends and family.

So we think so far, like I said this as well, and I think you would degree, which is that dolphin is pretty early stage and at this moment, it's not a threat to reach out per say, especially because it's so lacking on the social part. And um even though I grew quite quickly over chinese near I believe IT had something like seven million daily active users around chinese year due to its red envelope or kind of cash gifting a marketing campaigns.

But then a few days later, like a dropped around three million daily active users. So the attention is not that great right now and I think it's because its social functionalities aren't that great. But I I think it's still even knowing that.

I think it's worth discussing because then the company behind door shine, which is or by dance, they have grown tremendously over the past few years. And I think they're one of the few chinese companies that's been able to be so successful overseas. So I think already tiktok is very popular outside of china, right, like it's in number two or at least in the top APP rinky ahead of passenger facebook and instagram too.

I think that's really impressive because again, I don't think many chinese tech companies have been able to first test the product or be successful in china and then so quickly scale overseas and get a very loyal user base. And also, I guess I wanted to add something which is not video or content related. So recently, I think last week doing so, the chinese version of tiktok launch mini games inside of the APP.

So a bit of contacts. Mini games also took off over the past years. So and we had so these are in APP games that you don't download separately, you know, as a separate APP on your phone doing now let you play a lot of different games, including stuff like a super cells clash of clans.

So it's become like an entertainment hope sort of. And I think gaming is an incredibly lucrative space in china, right? Developers can make, uh, advertising revenue inside doing now because if you opened up these many games, which is I think I could be really huge, right? And also gaming makes up more than half of tensor revenue. A gaming is a real cash cow in china. So if doing can make a work, I mean, that's just something else um that they're building off of their incredibly popular .

video sharing up. Yeah I think the main reason that makes me think that bite dance can do an APP that compete with, which is based on everything they've done so far and these companies just so impressive. I mean, first they started with the media APP and you know, if you were a few years back, I ve gone to v and say, hey, I want to do a media in china.

No one would have given you money because you're not supposed to do independent media in this country, right? And especially if you are saying, no, my plan is to reach like hundreds of millions of users and not get shut down. I just love attitude of this company.

You know, they are the smallest company compared to tencent and alibaba and facebook and google, all dots, right? But basically what they are doing is that they are in the west competing heavily with facebook. We know that serious considering how many users have already grab ed and considering facebook have launched copycat, trying to with bite down and tiktok.

And at the same time, they are on their home market in the largest internet market in the world, taking on tencent and taking on wee chat, and also taking on tencent main revenue channel games. I mean, where will this end? You could ask a question or day, maybe trying to do a little bit too much, too fast.

But you know, you gotta love the attitude list. We started this episode with the question, can dorchen compete with we out and can bitten compete with tencent? And considering everything they are doing so far, at least they are trying while competing with facebook in the west.

I believe that china is such a complex market, is more like europe. You know, there are, uh, in china thirty four distinct markets. They can be cds, they can be provinces, they can be municipalities.

So, uh, there are thirty four distinct markets and people you know live in in shanghai and people living in ARM chi and people even to go on so um like different things, different content, different um formats. And that's why uh you know platforms like um total or going or right now doshin have uh huge potential in chinese because IT is so diverse. There are demographic groups from second, third, forth, T, C. That are excited to to adapt um you know storytelling through videos, to adapt new formats, new styles um and you know essentially they have huge pool of these kind of customers.

I think in the whole market. And I think the broad consensus are how people think about china's second issue now is that there's a very few opportunities left. And I think it's not just china, right, like in the U. S, google, facebook or fang, right, like you have these cohorts of incredibly powerful and enormous tech companies that make IT very difficult for startups, a car about a space for them selves so I think with by dance store shana doing tiktok forces tencent which access um I think in china what's interesting is that there are so these opportunities life like that's what by dance kind of shows right .

yeah I mean, I guess the only thing this can be a huge chAllenge for them is if ten sent the facebook, start pushing back very hard at the same time because down the question is whether they have the band with to handle competition from both of them at the same time, consider how much users and how much money and these two companies have.

So thanks again for listening to digital china as usual. If you have any feedback or suggestions we would love to hear from you, you can contact me on twitter. My handle is eva W, X I A O.

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