Case study of TikTok: Global Dominance in 4 years

With this piece, we take a look at the case study of TikTok starting 2017 till today. The topic has picked some steam in the recent times after ByteDance (parent of TikTok) was recently in talks with the Microsoft after its bid to purchase the TikTok Business in the U.S. The talks ended after TikTok rejected the Microsoft’s bid and instead approved Oracle’s bid. It will be interesting to see what holds for them in the future.

Anyway, does it not surprise you that an app that is merely 4 years old has now become a sought-after for huge giants like Microsoft and Oracle?

The beginning of the journey

ByteDance was founded by Zhang Yiming in 2012 in Beijing. But his first app was not TikTok and instead a news app called Jinri Toutiao (loosely translating into “Today’s Headlines”). It is a massive popular news aggregator making use of AI to make recommendations to its readers.

And no, even his next app wasn’t TikTok and instead it was a Chinese version of TikTok called Douyin, launched in 2016 in China.

But this app was a success and it gave the idea.

In 2017, ByteDance went on to acquire Musical.ly. They combined the capabilities and power of both these apps, to rebrand themselves to what we call “TikTok” today. They also acquired Flipgram, a US video app later in order to gain users in the US market.

It is important to note that TikTok was not the first short video platform, no. The first video platform was Vine, which was invented by accident. A few other apps were launched after Vine (You can take a look at the timeline) but TikTok was the only app to achieve this amount of success.

What was different? Well, a few things. One of which was the TikTok’s unbeatable AI Algorithm, which is valued worth more than $20Bn. And the second was their partnerships in the right geographies.

The Growth of TikTok

TikTok soon became a force to reckon with. Only 2 years post their Global launch in 2017, TikTok surpassed 1 billion downloads globally on Apple Store and Google Play store in March 2019. And by November 2019, it surpassed 1.5 billion downloads globally. Look at the rankings below:

This growth seemed a little unnatural to the US authorities. So, when TikTok planned to expand their business into the US in a big way, they were investigated. The authorities claimed that this expansion had some sort of Politics involved and that the Chinese app can use the data to monitor and compromise confidential data.

case study of tiktok

But that did not stop TikTok. The entire thing was perceived as a part of the “Ongoing US-China trade war”. Again, what helped them here was their earlier acquisition of an American short-video company Flipgram.

growth of tiktok - quarter by quarter downloads

It clocked 2 billion downloads globally in April 2020. This growth attracted a lot of the best talents around the World. Former Walt Disney streaming chief Kevin Mayer joined TikTok as their CEO in May 2020.

Case study of TikTok: Global Dominance in 4 years
The Bummer: India bans TikTok

What most brands couldn’t do in years, TikTok did in 3 or less years. TikTok was one of the very few apps that cracked the rural code in India. It had around 800 million monthly active users and contributed about 30% of the total global downloads in the World. It became an attractive place for the brands to market their products in the areas they earlier weren’t able to. And with the AR-infused features of TikTok, this only became more interactive for the users.

There were a few notable things that happened during this time as well, the YouTube vs TikTok war. Where the Indian YouTube community waged war against the TikTok community. There were abuses, attacks, and what not. TikTok was even bashed on Google Play store where its rating was dropped to near 1 star. This was later fixed and brought back to normal because these negative ratings were motivated sentiment and hate.

Case study of TikTok: Global Dominance in 4 years

But TikTok did not stop. It continued its growth trajectory. And then came the ban hammer. June turned out to be a dark month for TikTok and its parent ByteDance when the Government of India banned 58 Chinese apps, including TikTok.

The alternatives

Post the ban, a lot of other similar apps joined the race to newly scattered market. It was a sight to see! Every big player out there was fighting to get a share of this free market. Mitron is one of the apps that made an early entry, made in India, it is very similar to TikTok. Instagram launched Instagram Reels. Even YouTube came in with their own Short video feature.

The ban did some serious injuries to TikTok and made the apps position vulnerable in other markets, like the US. It sent a message to various countries that if “internal security” is a concern, a ban can always be incorporated. Even Australia scrutinized TikTok for risks that it poses to data security.  Let’s take a look at its position in the US.

The stance in the US

A month after TikTok’s ban in India, the US president Donald Trump, calling TikTok a “Threat to national security”, gave an ultimatum to TikTok to sell their US business to a company in the US. He signed an executive order that if it failed to do so before 15th September, they will be banned in the US.

Taken this vulnerable position of the app, Microsoft in the US offered TikTok an opportunity to sell their US business to Microsoft in August 2020. These talks were made public by the company. However, looking at the ban prospects of the company, a few top executives including the CEO Kevin Mayer resigned from the company. Only making TikTok further vulnerable.

And Early on today, 14th September 2020, Oracle confirms a deal with ByteDance as their “Trusted Tech” partner in the US. While we’re yet to see the details, this partnership is poised to vanish some data security concerns given that a US company will now be involved in the technology and data security.

While the future seems a little uncertain for TikTok at the moment, we believe right partnerships are to be made in order for them to avoid becoming obsolete in the near term.

There was also a word in town that TikTok made a phone call to Mr Mukesh Ambani in August 2020. If something really were to happen here, there’s no doubt that TikTok will return to the Indian market and even stronger with the support of the Richest man of the continent.

Author:

While the author of this piece is Yash Thakker, the piece is done in collaboration with Finkrypt a really interesting page with cool infographics about the latest content. Take a look at them. If you liked the content, feel free to share it with your friend on WhatsApp.

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