It's hard to find a replacement for Zhang Yiming on TikTok

It is very dangerous for a company's business to rely on only one product. After the development of Tiktok was hindered, ByteDance launched Lemon8. Although the development momentum is very good, it is not so easy to become a substitute for Tiktok.

As TikTok faces increasing pressure around the world, potential "replacements" are beginning to emerge.

Recently, ByteDance's overseas picture and text community Lemon8 has received a lot of attention. According to statistics from mobile data company Data.ai, since September this year, the number of downloads of this APP in the US Apple App Store has remained high, ranking first in the lifestyle APP category and in the top 20 of the overall list; it ranks in the top 7 on the Android app store.

Lemon8's predecessor, Sharee, was launched in March 2020. Its first overseas expansion was to Japan, followed by Southeast Asian countries such as Thailand, Indonesia, and Malaysia. After changing its name, Lemon8 entered the European and American markets in 2023. With the continuous increase in the number of users and popularity, Lemon8 is regarded by many as the "overseas version of Xiaohongshu" created by ByteDance.

In addition to Lemon8, ByteDance also has a number of apps for overseas markets.

Gauth (formerly known as Gauthmath) is one of the star products of ByteDance's overseas expansion. This educational app was launched at the end of 2020. It mainly searches for questions by taking photos. In the early stage, real people answered the questions, and now it has added generative AI functions. As of March this year, Gauth has more than 4.5 million weekly active users; based on this, its MAU (monthly active users) is about 10 million.

Another APP that has attracted much attention is CapCut, the overseas version of Jianying. It was also launched in 2020. As TikTok swept the world, CapCut, which is deeply tied to it, also caught a ride. According to data from mobile data monitoring company SensorTower, CapCut's MAU has exceeded 300 million, accounting for more than 80% of the global mobile video editing market.

In addition, ByteDance's overseas APPs also include Fanno, an e-commerce platform that has entered many European countries, Resso, a streaming music application, Fizzo, an online literature platform and Fizzotoon, a comics platform that focuses on the Japanese market, BuzzVideo, the overseas version of Xigua Video, and Vigo Video, the overseas version of Volcano Video.

These apps are spread across different segments such as graphic and text communities, online education, video editing, cross-border e-commerce, music, online literature, short videos, etc., targeting different markets and have accumulated a large number of users over the past few years.

This makes people wonder whether ByteDance is already preparing a "Plan B" for TikTok?

Over the past three or four years, TikTok has continued to surge in the global market, with significant progress in user scale, content ecology and commercialization. But at the same time, the geopolitical risks it faces are becoming increasingly severe.

In the United States, TikTok still faces regulatory requirements to be forced to divest from ByteDance, otherwise it may be banned from the App Store in January next year. At the same time, more than a dozen states have filed lawsuits accusing TikTok of failing to protect teenagers. TikTok has strongly opposed this, believing that many of the claims are inaccurate and misleading.

In Europe, TikTok has been fined in the Netherlands, Italy, Ireland and other countries, with the Irish regulator fined as much as $370 million. TIkTok had to set aside $1 billion for these fines.

ByteDance will not easily give up TikTok, its crown jewel.

On the one hand, TikTok has launched appeals and countersuits around the world, and on the other hand, it has mobilized creators and users to resist attacks. In March this year, TikTok pushed a pop-up window "Prevent TikTok from being shut down" to 170 million users, trying to win public sympathy and reverse the trend.

At the same time, TikTok is reducing its dependence on a single market. In Southeast Asia, Europe and other places, in addition to cultivating content and user ecology, TikTok is also improving its commercial infrastructure.

However, with less than four months left before the deadline of "either divestiture or removal from the shelves", ByteDance may need to prepare a "replacement" for TikTok in advance to deal with the imminent crisis.

The popularity of Lemon8 seems to indicate that ByteDance’s “Plan B” has already found its target. However, in terms of user scale, Lemon8 is still two or three orders of magnitude behind TikTok, and its profitability is even further behind. As for smaller apps such as Gauth and CapCut, the possibility of “taking over” TikTok is even slimmer.

The bigger problem is that Lemon8 and others’ growth depends on TikTok’s traffic pool. If TikTok’s situation is irreversible, whether Lemon8 and others can succeed or not is not the only question. At that time, how to find a new growth paradigm will be a more urgent problem than becoming a “TikTok alternative”.

Under this circumstance, ByteDance should perhaps change its overseas expansion strategy and leap from the mature "short video overseas expansion" to a new stage of "AI large model overseas expansion".

01

Except for some individual apps such as TikTok, ByteDance's "overseas army" has a common feature of having a loud voice but limited size.

Take Lemon8 as an example. Attracted by the gimmick of "dominating the charts", many people took it for granted that it was recreating the magic of TikTok and sweeping the American Internet. But in fact, Lemon8 has been online for three years and its growth rate is not fast.

Lemon8, renamed from Sharee, focused on Japan in the early days. Six months after its launch, the cumulative downloads exceeded 1 million times, and its performance was quite satisfactory. In 2023, Lemon8 began to enter the European and American markets. With the substantial increase in advertising, Lemon8's downloads increased by an order of magnitude.

According to data from market research company Appfigures, as of September this year, Lemon8 has been downloaded 16 million times worldwide, of which about 6.4 million times came from the United States. Based on this, it can be inferred that Lemon8's MAU is about one million.

Although the number of users has increased significantly compared to the initial launch, Lemon8 is still a small player in the field of picture and text communities in the European and American markets. Among the two leading platforms in the same track, Instagram has more than 2 billion global users and Pinterest is close to 500 million, neither of which can be matched by Lemon8 at this stage.

Apart from Lemon8, ByteDance’s other overseas apps cannot be considered industry leaders.

In the first half of this year, by virtue of the popularity of generative AI, Bytedance's photo search app Gauth became popular again. Although Gauth has tens of millions of MAUs, it can only compete with Chinese overseas competitors such as Question.AI.

In fact, the most popular question-searching service used by elementary and middle school students in the United States is Photomath. This APP was created in 2014 and acquired by Google in 2022. It has been downloaded more than 300 million times and supports 30 languages.

ByteDance's Fanno, which focuses on European e-commerce, was launched at the end of 2021, and it seemed to be competing with SHEIN, AliExpress, etc. However, due to the high entry threshold for merchants, Fanno started high and ended low, and within less than half a year, there were rumors of its elimination and dissolution. Fanno subsequently denied the rumor, but the APP basically disappeared after 2022.

In addition, ByteDance tried to capture the Japanese youth market around 2022 by launching Fizzo and Fizzotoon to develop online literature and comics. But to date, there is still little news about these two apps.

The streaming music service, which was once highly anticipated, has become a failure for ByteDance's overseas expansion.

In March 2020, ByteDance launched Resso in India and Indonesia, attempting to compete with online music giants such as Spotify by relying on TikTok. Three years later, Resso has gained hundreds of millions of users worldwide, with over 250 million downloads in India alone.

After the initial run-through model, ByteDance will gradually shut down Resso in mid-2023 and replace it with TikTok Music. In addition to serving users in Indonesia and Brazil, the new service has also entered Australia, Mexico and Singapore.

However, under the influence of multiple unfavorable factors, TikTok Music quickly fell. Earlier this month, TikTok announced that it would shut down TikTok Music on November 28. ByteDance's attempt to challenge Spotify's throne ended in failure.

The only exception is CapCut. As TikTok's official editing tool, CapCut's user base has soared in the past few years and it has almost no rivals.

However, CapCut is a tool-type APP, and the common feature of this type of APP is that it has a large number of users, but limited monetization capabilities and commercialization space. How to more closely integrate with generative AI and highlight the content creation attributes is still a challenge that CapCut must overcome.

02

Before TIkTok encountered a crisis, although Lemon8 and others were not growing very fast, they had the potential to build the ideal "Big TikTok".

Take Lemon8 as an example. From the end of 2023 to the present, TikTok has provided multi-dimensional support for this app, including encouraging users to use the #Lemon8 tag and post related content; launching expert activities with different themes, using celebrities to demonstrate the gameplay and functions of Lemon8, and then guiding fans to download and install the APP; and so on.

Correspondingly, Lemon8 will also tilt its marketing budget towards TikTok, on the one hand, placing a large number of information flow ads, and on the other hand, cooperating with TikTok influencers to publish their own videos or invite them to join its own platform. In addition, Lemon8's ads also appeared in CapCut.

In addition, Lemon8 has connected with TikTok at the product level, allowing creators to share to TikTok with one click, thereby reducing the pressure on influencers to operate multiple social media accounts at the same time.

These attempts have achieved considerable results. To date, the cumulative number of views of TikTok's #Lemon8 hashtag has exceeded 4 billion, and the user scale of Lemon8 has also grown significantly.

If Lemon8 and others continue along this path of close cooperation with TikTok, a huge and prosperous "Big TikTok" will emerge, and it is expected to replicate the operating model of the domestic "Big Douyin".

Since the organizational structure adjustment of ByteDance at the end of 2021, Douyin has become the core of ByteDance's content ecology, and Toutiao, Xigua Video, search, and Baike have all been brought under its wing. The "big brother" Douyin is not only a traffic pool that exports users to the "little brother", but also a core scenario for accepting and meeting user consumption needs and completing monetization in different ways.

Ideally, TikTok can build an overseas version of "Big Douyin" and replicate Douyin's dual flywheels of users and monetization.

In terms of commercial infrastructure, TikTok has made great progress in recent years, especially the rapid development of live e-commerce. According to data released by TikTok earlier this year, as of December 2023, TikTok Shop has gathered more than 15 million sellers; during this year's summer promotion, TikTok ran several million-dollar live broadcast rooms in the European and American markets, and the trend of influencers bringing goods is gradually emerging.

On the other hand, sister apps such as Lemon8 are still in the growth-first stage, with few commercial moves. For "Big TikTok", in the long term, the main value of Lemon8 is to deepen its niche track and extend the footnotes of the entire ecosystem to graphics, music, online literature, education and other scenarios, which will not only provide impetus for TikTok to further expand its scale, but also stimulate more commercial potential.

But more than four years after ByteDance’s overseas expansion, “Big TikTok” has not really taken shape. Apart from Lemon8 and CapCut, apps like Gauth have little interaction with TikTok, so there is no mutual assistance.

There are reasons for Lemon8 and others. Most of the tracks they are in have strong competitors that control the majority of the market share, and they are protected by global giants such as Meta and Google, so it is difficult for latecomers to rewrite the situation.

In addition, compared with domestic netizens, overseas Internet users are not used to being confined to the ecological jungle of a certain giant, and the cross-platform aggregation effect based on the same account system is not obvious. Lemon8's advantage of relying on TikTok cannot be directly converted into growth in various indicators most of the time.

The geopolitical pressure faced by TikTok and the entire ByteDance group has dealt the final blow to "Big TikTok". With TikTok unable to take care of itself, ByteDance has lost the opportunity to replicate "Big Douyin" globally, and Lemon8 and others can only return to the normal state of fighting on their own for the time being.

03

During TikTok's heyday, ByteDance did not have a strong desire to create a second overseas hit.

Around 2020-2022, it laid out a series of overseas apps, but did not invest fully. Lemon8, Gauth and other products have been overseas for many years, but have never received the ByteDance-style "great effort to achieve miracles" treatment. Most of the time, their focus is on determining positioning, polishing products, and running through models, while users and traffic are in a state of natural growth.

The relatively relaxed growth environment has given Lemon8 and others enough time and space to explore on their own. But now, as the possibility of TikTok being removed from the shelves increases, ByteDance's "little brother" going overseas seems to have to move forward with a heavy burden.

Lemon8's rapid growth this year is related to the increase in advertising, which coincides with the US's siege of TikTok. This may make people wonder whether ByteDance has chosen Lemon8 as a security backup for TikTok.

From the product perspective, Lemon8 is an easy choice. Adding short video and live streaming functions to a text and picture community is not a very high technical difficulty; after all, Douyin has long supported text and pictures, and Xiaohongshu is also working on video.

Coupled with Lemon8's previously accumulated brand and users, as well as ByteDance's financial strength, if Lemon8 is "promoted", it will indeed have the opportunity to achieve rapid growth in a short period of time and increase its user base by an order of magnitude.

But from a longer-term perspective, letting Lemon8 "take over" TikTok is not the most imaginative choice.

As mentioned above, as a latecomer, Lemon8 has to face particularly strong opponents, and its appeal among overseas netizens is far less than that of its competitors. If the video module is forcibly added, Lemon8's positioning will become more ambiguous, which is not conducive to its long-term development.

In addition, in the short video market dominated by TikTok, Meta's Reels, Google's YouTube Shorts and even X platform are all eyeing it. If TikTok is forced to withdraw, the first to share the market will be these local leaders, not other small and medium-sized apps under ByteDance. Even if Lemon8 wants to inherit the mantle, it will be unable to do so.

If ByteDance cannot find a seed player for "TikTok 2.0", it might as well jump out of the old battlefield and make a big move in the field of generative AI.

Since the second half of 2023, ByteDance has been promoting its domestic AI big model business while also frequently making moves in overseas markets, launching the AI ​​chatbot Cici (corresponding to Doubao), AI Bot building platform Coze (corresponding to Kouzi), AI plot interaction platform AnyDoor (corresponding to Maobox), AI smart store ChitChop, AI camera PicPic (corresponding to Ali Miaoya camera), etc.

Among them, Cici has been launched in 36 countries and regions around the world, covering Japan, South Korea, Southeast Asia, the Middle East, Africa, South America, etc., and once ranked first in the Google App Store in Argentina and Peru.

Compared with Lemon8, products such as Cici are less relevant to TikTok and have far fewer users. However, these applications based on large AI models have many similarities with CapCut, which is focusing on AI-generated content. By connecting with each other, the latter can inject a large number of new users into Cici and add weight to its own content ecosystem.

This overseas growth paradigm, which does not rely on the power of TikTok, is exactly what ByteDance urgently needs to cope with global storms.

If ByteDance can take a step forward and complete the transition from short video overseas expansion to AI overseas expansion, the problems that have plagued this local giant aiming for globalization will be significantly resolved, and ByteDance will have the opportunity to bypass unknown reefs and return to the efficient path of technology first.

References:

Jinduan, "Rumors and Truth about the Byte Version of Xiaohongshu"

Sanyi Life, "TikTok Music is about to close, ByteDance's music dream is shattered"

The number one AI player, "ByteDance AI goes overseas, will it rebuild TikTok in the AI ​​era?"

AI Whale Selection Society, "Byte Edition Sora's Overseas Public Beta, This Time It's Not the Wolf That Cried"

Peng Xiaoxian, "ByteDance and Xiaomi, will they create the 4.0 era of "online literature going global"? "

Written by: Yan Fei Editor: Wang Jing This article is written by the author of Operation Party [Alphabet List], WeChat public account: [Alphabet List], original/authorized to be published on Operation Party, and any reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.