Platform business – Douyin, A rising star in the Chinese application market

 

Introduction

This essay will firstly include the introduction of Douyin, the operation evaluation of the platform, how does Douyin attracts and maintains its large users, and lastly, how the platform makes money and the drawbacks that the platform brings.

What is Douyin?

Speaking of Douyin, some of us might be more familiar with its international version TikTok. Douyin and TikTok both belongs to a Chinese company ByteDance but have unique features. In September 2016, Douyin was officially launched with its original name A.me. In December, it changed its name to Douyin. (Graziani, 2018) A year later, TikTok was introduced mainly for IOS and Android markets outside of China. Douyin is a short video-sharing app with various types of videos ranging from dance, daily vlogs, and education etc. (“Douyin and TikTok are Released; Douyin for the Chinese Market; TikTok for the Rest of the World: History of Information”, 2017) With the constant updates of the app, the length of videos ranges from 15 seconds to 15 minutes. Up to August 2018, the daily active users on Douyin had reached 320 million. (China Daily, cited in Chen et al., 2020) With the rapid development of Douyin and TikTok, their parent company ByteDance has a market valuation of approximately US$400 billion. (Zhou & Feng, 2021)

Figure 2. The ranking of the most popular social media in 2020 by https://as-pacific.com/en/blogs/douyin-popularity-and-brand-promotion-opportunities-in-china/ is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Based on a work at www.statista.com.

 

The primary fields of operation? / How to use Douyin?

 

With the easily used functions of editing, posting and the creative atmosphere of the platform, Douyin attracts and giving ordinary individuals opportunities to turn themselves into digital influencers within 15 seconds of exposure. When users download the app, videos would automatically play within seconds, by simply swiping up and down for new content, saving the users time on searching content. (“Your Guide to Chinese TikTok » HERE! Dongguan”, 2020) In addition to online browsing the bottomless short videos, users could share or download their favourite content by simply hitting the share/download button on the right-hand side. Different from YouTube, which requires users to edit videos on other editing apps, Douyin provides users with simple editing functions, such as adding on special visual effects, animations, add-ons and stickers when they create content. (Lu & Lu, 2019) This promotes users to create creative and high-quality content. Apart from its simple built-on editing function, Douyin also launched an app called Capcut for users that have further editing needs.

 

 

Besides the endless short videos and editing function, the live streaming function is also popular among users. The live streaming function on Douyin allows users to get in touch with their favourite content producers, giving support to their favourite producers by sending out virtual gifts on the platforms. (This will be described in more detail below) Similar to most digital platforms, Douyin’s algorithm would automatically collect users’ activity data and correspondingly filter and recommend similar contents that users prefer based on their liking list. (van Dijck, 2018) With effective and accurate content recommendations, as well as short videos that are perfect for fragmented time consumption, Douyin has become an efficient way for users to absorb multi-faceted content in a short time.

 

Has the platform operated successfully?

The design of Douyin is in line with today’s fast-paced society where individuals, especially office workers, students and users that are lack time and craves fragmented content during their precious time. The convenience of Douyin has attracted 320 million daily active users (Chen et al., 2020), and 677 million monthly active users in 2020. (Curry, 2021)

 

 

With a penetration rate as high as 98.1%, Douyin is crushing other KOLs in the Chinese market.

 

Besides its 98.1% penetration rate in the Chinese market, Douyin also has approximately 200 million downloads in total. Thus, Douyin is operating successfully without a doubt.

 

BUT How?

• Reaching out to a broader segment of the population by the continuous upgrade

Since the launch of 2016, Douyin has been upgrading itself over time. Its slogan changed from ‘The music video platform of the new generation‘ to ‘Record your beautiful life‘. (Graziani, 2018) As the new slogan said, users are more used to posting videos of their daily life than before. The majority of contents post on Douyin was initially music videos, similar to Musical.ly.

 

However, with the help of the platform’s algorithm and the enrichment of its users’ group, the contents are now more abundant. With data feedback from the users’ activity, users ranging from almost all age groups could find their preferred content when browsing on the platform.

The platform is also creating contests and activities to promote users posting various kinds of videos to the platform. (“Behind Douyin Success Story: How Did It Pull It Off?”, 2019) By creating award-winning activities and contests, it would stimulate users’ creativity and thus enriching the variety of contents post on Douyin, the platform could therefore reach out to a broader segment of the population.

 

• #Hashtag activity, collaborating with popular merchants

 

Douyin’s first partnership with the luxury brand is an American fashion label called Michael Kors. By inviting the brand’s ambassadors including Yang Mi, Ma Chao and KOLs of Douyin, this activity held a #City catwalk challenge for users by wearing Michael Kors’ products when doing catwalks. (Graziani, 2018) Through the personal influence of brand ambassadors and KOLs of the platform, #City catwalk’s activities have greatly stimulated the participation of Douyin users. This hashtag activity successfully attracted 3 million users to post their own 15 seconds catwalk videos with #City catwalk.

 

• #PostiveEnergy, collaborating with the Chinese government

 

Besides promoting hashtag activities, as a company that originates in China, Douyin has seized the opportunity to collaborate with the Chinese government, and actively cooperates with the government to promote users posting videos with the hashtag #positive energy. More than 500 Chinese governmental accounts on Douyin were posting content to promote positive energy that are align with the value systems and the ideology of the Chinese Community Party. (Chen et al., 2020)

The hashtag activity not only helps the platform create a harmonious and patriotic community atmosphere but also helps the government carry forward and spread positive energy content and national ideas. Through the activities mentioned above, Douyin has attracted and retained a large number of active users.

How does Douyin generate money?

• Live-streaming

The live streaming built-in function on Douyin is popular among users. With the live streaming function, users could build a virtual intimate relationship with their favourite content producers. It is one of the ways for the platform to obtain revenues. (Graziani, 2018) To be specific, users could tip their favourite content producers during the live streaming by sending them virtual gifts. Users need to be charged for Dou coins on the platform and then purchase virtual gifts with different prices through the Dou coin balance of their accounts. Users could choose to send different prices of the virtual gifts by their preference, to help their favourite producers increase their popularity and rankings on the platforms. For popular KOLs, the virtual gifts received from their fans could be converted into actual RMB and be cashed out through Alipay. (Graziani, 2018) For there are thousands of KOLs go on live on the platform daily, Douyin could obtain very substantial income every day.

Besides users depositing Dou coins, the platform also generates revenues through cooperation with merchants and KOLs.

 

• Cooperation with merchants and KOLs

Due to the popularity of Douyin, businesses of all sizes are transforming and upgrading to live-streaming sales and cooperate with Douyin for the promotion of their brands and products. To be specific, similar to Google’s algorithm, the more promotion fees paid to the platform, the higher possibility that the account could get exposed. (van Dijck, 2018) Merchants would pay Douyin a certain amount of advertising fees. Douyin would use its algorithm to help brands to promote products to the brand’s target customers. Specifically, users will receive the products’ videos or advertisement photos implanted on their recommendation page. Moreover, there will also be full-screen splash ads that last for 3-5 seconds long. (“Douyin, The New WeChat in China – Digital Crew”, n.d.) In this way, Douyin could generate substantial revenues, for merchants paying numerous promotion fees craving for more exposure.

 

As for individual users who crave higher exposure, Douyin introduces a service called Dou+. Dou+ is a service that could help users to get more exposure for their account, the service allows users to choose whether they want exposure to a particular video or to increase their account’s number of followers. However, Dou+ is a premium service, where users need to pay different prices for certain exposure or followers. By introducing the Dou+ service, Douyin could hence generate decent incomes.

Dou+ service

Source：https://www.pinterest.com/pin/782359766511001720/

 

Concerns

• Users call for greater personal Privacy

In today’s technology-led society, users’ personal data and private information are in the hands of digital platforms. Hence, more and more users are having concerns about their personal information are being exposed. According to the interviews conducted by Lu & Lu, users on Douyin reported that the platform recommends highly relevant ads to them. (Lu & Lu, 2019) To be specific, users may encounter a situation when they might just talk to their friends or families about a particular product, the next second there will be advertisements recommendations of the products on the platform. Thus, this intriguers users to have concerns about the security breach of their personal information.

• The features of the fragmented videos make users, especially adolescence, addicted to Douyin

In today’s fast-paced society where people crave fragmented information during their precious break time, a platform similar to Douyin that provides fragmented information is fairly popular among users. However, this also brings drawbacks for adolescence addicting to the platform. According to statistics, there were 500 million Chinese suffering from visual impairment, and half of the population were aged over 5. Doubtlessly, teenagers spending too much time on the platform would greatly increase their chances of becoming nearsighted and many more other underlying diseases that affect their health. Although the platform has imported corresponding restrictions on the usage for adolescences by real-name authentication and limits their login time between 6 p.m. to 10 p.m. (“China targets video gaming to tackle myopia in children”, 2018) Further restrictions are needed as adolescences may use their parents’ ids for real-name authentication to gain more time to use Douyin. It requires the joint efforts of platform and parents ‘supervision.

 

Conclusion

The convenience brought by Douyin enables users to obtain various news and information in a short period. However, the convenience brought by the platform also brings several drawbacks. The use of Douyin requires users’ self-control and relevant restrictions of the platform to better play the positive role brought by the platform.

 

References

Behind Douyin Success Story: How Did It Pull It Off?. Sampi.co. (2019). Retrieved 10 October 2021, from https://sampi.co/douyin-success-story/.

 

Chen, X., Valdovinos Kaye, D., & Zeng, J. (2020). #PositiveEnergy Douyin: constructing “playful patriotism” in a Chinese short-video application. Chinese Journal Of Communication, 14(1), 97-117. https://doi.org/10.1080/17544750.2020.1761848

 

Curry, D. (2021). Most Popular Apps (2021). Business of Apps. Retrieved 6 October 2021, from. https://www.businessofapps.com/data/most-popular-apps/.

 

China targets video gaming to tackle myopia in children. BBC News. (2018). Retrieved 9 October 2021, from https://www.bbc.com/news/world-asia-china-45366468.

 

Douyin and TikTok are Released; Douyin for the Chinese Market; TikTok for the. Rest. of the World : History of Information. Historyofinformation.com. (2017). Retrieved 12 October 2021, from https://www.historyofinformation.com/detail.php?id=5298.

 

Douyin, The New WeChat in China – Digital Crew. Digital Crew. Retrieved 13. October 2021, from https://www.digitalcrew.agency/douyin-is-a-popular-app-among-the-youth-in-china-an/.

 

Graziani, T. (2018). How Douyin became China’s top short-video App in 500 days. WalktheChat. Retrieved 7 October 2021, from https://walkthechat.com/douyin-became-chinas-top-short-video-app-500-days/.

 

Lu, X., & Lu, Z. (2019). Social Computing and Social Media Design, Human Behavior and Analytics. In 11th International Conference, SCSM 2019 Held as Part of the 21st HCI International Conference, HCII 2019 (pp. 233-244). Orlando; Springer. Retrieved 12 October 2021, from https://link-springer-com.ezproxy.library.sydney.edu.au/chapter/10.1007%2F978-3-030-21902-4_17#citeas.

 

Thomala, L. (2021). China: penetration rate of top influencers by platform 2021 | Statista. Statista. Retrieved 8 October 2021, from https://www.statista.com/statistics/1245379/china-penetration-rate-of-mega-influencers-by-platform/.

 

van Dijck, J. (2018). The Platform Society as a Contested Concept. Oxford. Scholarship Online. https://doi.org/10.1093/oso/9780190889760.003.0002

 

Your Guide to Chinese TikTok » HERE! Dongguan. HERE! Dongguan. (2020). Retrieved 11 October 2021, from https://www.heredg.com/2020/03/your-guide-to-chinese-tiktok/.

 

Zhou, X., & Feng, C. (2021). Value of TikTok maker ByteDance approaches US$400   billion for new investors, sources say. South China Morning Post. Retrieved 13 October 2021, from https://www.scmp.com/tech/big-tech/article/3128002/value-tiktok-maker-bytedance-approaches-us400-billion-new-investors.

 

This work by Luyi Liang is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.