Page 17 - Forbes - Asia (June 2018)

WeChat has also been adding more video elements, such as
allowing users to upload longer clips to their friend circles to
increase engagement.
But as people spend more time on Douyin, their attention
is being diverted from WeChat—where Tencent wants to keep
them for more selling. According to Questmobile, a Chinese
data analytics irm, short-form video accounted for 7.4% of
the total time Chinese people spent online in March, up from
1.5% a year ago. Meanwhile, instant-messaging services, pri-
marily WeChat, are down to 32% from 37% in the same peri-
od. “Short-form video apps like Douyin are putting pressure
on WeChat,” says Zhang Xueru, an analyst at Shanghai’s 86 Re-
search. “hey are all competing for users’ leisure time, but it is
now increasingly occupied by Douyin.”
ByteDance and Tencent are taking their clashes to court. he
two companies recently iled a series of lawsuits against each
other for defamation and unfair competition, with Tencent de-
manding one yuan ($0.16) in damages and public apologies on
ByteDance’s platforms. ByteDance is asking for 90 million yuan
in damages, accusing Tencent of purposely blocking its con-
tent on the popular QQ messaging app. ByteDance founder and
chairman Zhang Yiming, 34, also engaged in a rare online spat
with Tencent founder Pony Ma, accusing the latter’s Weishi app
of plagiarizing Douyin’s model. ByteDance and Tencent didn’t
respond to Forbes Asia’s requests for comment.
Meanwhile, Douyin has other issues. In Hong Kong the app
has been drawing a backlash for what some consider inade-
quate protection for underage children, who are uploading clips
containing violent and sexually suggestive scenes to gain on-
line fame. What’s more, the state-run People’s Daily is calling for
stricter oversight of the app, ater press reports that some users
were seriously injured by imitating Douyin videos. Douyin re-
sponded publicly by saying some dance or sport moves “are not
suitable to be imitated by all users,” urged parents to take care,
and said the app would include “risk warning systems.”
hese come as ByteDance is already mired in a regulatory quag-
mire. China’s Ministry of Culture and Tourism has just launched a for-
mal investigation of the company for publishing a comic series that it
said distorted Chinese history. (ByteDance took it down with an apol-
ogy.) In April, authorities also told the company to permanently shut
down its popular joke-sharing app Neihan Duanzi, which the coun-
try’s media watchdog criticized for promoting “vulgar and improper
content.” In a public apology letter, Zhang said the product “walked the
wrong path” and promised to hire 10,000 people to police his sites.
Competition is also heating up. In addition to Tencent, China’s
internet giants are all tapping short-form video to capture young
Shake it till you break it: Music app Douyin lets users have their
15 seconds of fame, sounding a sour note for rival Tencent. users. he Baidu-backed iQiyi, for example, recently launched its
own mini-video app Nadou, using artiicial-intelligence-based sot-
colade previously held by Facebook’s WhatsApp, according to ware to analyze online trends and edit related clips. his may force
U.S. research irm Sensor Tower. ByteDance to bolster marketing to promote its own service, poten-
he popularity is being felt at Tencent. he Shenzhen tech tially hurting margins, 86 Research’s Zhang says.
giant has been building its own entertainment empire, oten “hey need to generate more good content to build an online
using the super-app WeChat to direct people to Tencent-of- community,” Zhang says. “Regulation is one thing, but what de-
fered text or video services such as Weishi, a mini-video plat- termines how far this product can go is whether it can add more
form the company revived in April ater launching it in 2014. social elements, so users can become better engaged.” F

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