ByteDance is the world’s most valuable private company, with popular apps such as TikTok is now ready to challenge ECommerce King Alibaba.
38-year-old AI coding genius, Zhang Yiming in a bid to challenge Alibaba, has hired thousands of staff and roped in with the likes of Xiaomi Corp. After making waves in the industry controlled by Jack Ma’s Alibaba Group Holding Ltd. and JD.com Inc. They managed to cash in $26 billion from the sale of make-up, clothing, and other merchandise in 2020 in their maiden year, this took Alibaba six years to accomplish.
After the success of ByteDance of TikTok, the company now plans to sell stuff via short videos and streams. This will not only test the skills of the developers but also ByteDance’s AI wizardry and decide the fate of its upcoming IPO.
ByteDance is a late entrant to the Chinese social commerce scene, a segment Alibaba thrived as a marketing tool in 2016. The company is relying on its artificial intelligence-driven, interest-based recommendations to help its e-commerce business catch up. Though it will not handle sales or merchandise itself, it plans to sell more ads to merchants, boost traffic and take a cut of the business.
Kang was hired by ByteDance in 2017, has reaped rewards to Zhang when it comes to breaking new ground for the company. Earlier he worked on the ByteDance Helo app, one of India’s most used social platforms for sharing video content prior to the ban imposed on Chinese apps by the Indian government on national security grounds.
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Later he was appointed as e-commerce head, they opened doors for users to have their own in-app stores. This prevented their rivals like Alibaba and JD. com Inc from their own in-app stores, by banning live streamers from selling items listed on third party sites.
Additional staff was recruited to fight counterfeit, online matchmaking system that helps connect merchants with influencers and their agencies and physical bases to house live streamers and merchandise are also in place just like Alibaba.
ByteDance has a number of celebrity endorsers such as Lei, the Xiaomi founder, who hosted live streams promoting his Mi TVs and smartphones. Zhou Huang chose Douyin Storefront for her jewelry, skipped conventional platforms such as Alibaba, and chose to go with ByteDance. She managed to achieve a fan base of 20000 by creating videos that offered practical tips such as choosing the right size when buying a bracelet online.
ByteDance makes a bulk of its earnings in the form of advertising revenue, which has boosted its move into the e-commerce business. With the increase in the number of users on Douyin, their market spending with the platform has also increased. According to ByteDance eCommerce may surpass gaming to become its biggest contributor to ad sales.
Michael Norris, a senior analyst with Shanghai-based market research firm AgencyChina. “It’s more about getting a greater share of advertising spending from brands that would otherwise be spending money on platforms like Alibaba. This is where the threat to Alibaba comes from.”