December 8, 2021

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For China’s Social Media Giants, It’s a Battle for the Ages

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For China’s Social Media Giants, It’s a Battle for the Ages

The fast-growing short video app TikTok regularly commands fearful headlines in the U.S., for everything from being fined by the FTC for illegally collecting personal data of American children, to the bipartisan concern it’s raising among U.S. senators who view the app as a “potential counterintelligence threat.”

Its speedy growth is also grabbing headlines in its native China, but for different reasons.

Owned by Beijing ByteDance Technology Co., the world’s second-most valuable unicorn, TikTok is a spinoff of Douyin, a Chinese short video app with around half a billion monthly active users (MAUs). And just as TikTok has been framed as a threat to Facebook’s U.S. market dominance, Douyin is often named in China as the upstart that could knock off WeChat, the nine-year-old “super-app” owned by Tencent Holdings Limited.

Predictions of Douyin’s victory are based on WeChat’s declining popularity among Generation Z users (anyone born after the late 1990s), who are said to prefer apps like Douyin for their video and live-streaming capabilities—and because their relatives can’t see their Douyin posts, unlike on WeChat.

But can Douyin truly be considered a generational replacement for China’s “super-app”? For many in the industry, Douyin’s role as a WeChat killer is, at least for now, greatly exaggerated.

Different services

Much of Douyin’s threat to WeChat is based on WeChat’s slowing growth and its weakness among younger users.

WeChat’s user growth has slowed recently, partly because the market is nearing saturation—around two thirds of China’s population actively use WeChat—and partly because of a greater diversity in available apps like Douyin that pull younger users away from WeChat, says Adrian Tong, a senior analyst at Media Partners Asia.

Only 15% of people born after 2000 post every day on WeChat, compared to 57% of those born in the 1960s. Douyin has amassed 500 million MAUs in three years; WeChat, which launched in 2011, reached 300 million by 2013 and now has 1.1 billion.

Still, age brackets and growth aside, analysts says major differences between the services mean that the two don’t play the same game .

Douyin features an endless scroll of videos determined by algorithm, not social network, and lacks the social intimacy of WeChat, which is built around personal contacts—school friends, family members, coworkers, and bosses will all be able to see your posts.

“Douyin and WeChat are completely different apps,” says Yuwan Hu, chief operating officer at China market research firm Daxue Consulting. “WeChat is a tool, a daily tool for living […] Douyin is more content-driven, WeChat is not only about content.”

Becoming a super-app

The services offered also differ in scope.

Since its launch, WeChat has transformed itself from a social messaging app to a one-stop “super-app” that incorporates private messaging, social media, e-commerce, mobile payments, ride-hailing, food delivery, business-to-business transactions, and even games.

Many of these services are offered through mini-programs—essentially sub-apps within WeChat that don’t require users to leave the main app to download them, meaning they are effectively competing with Apple’s App Store or Android’s Google Play, and almost form a second operating system within a smartphone’s OS.

Since the mini-programs launched two years ago, Hu says, they’ve become one of WeChat’s “biggest functions,” with 746 million MAUs, or around two-thirds of all WeChat users.

While Douyin is often painted as a younger disrupter that threatens WeChat’s hold on the market, it has struggled to construct a similar ecosystem of e-commerce and social networks.

WeChat is already at “super-app” status; Douyin has ambitions to create a similar in-app ecosystem of e-commerce and social networks, Tong says, “but these new verticals have yet to scale.”

Tong says Douyin’s social features, like video messaging service Duoshan and the group chat service Feiliao, which both launched earlier this year, are still struggling to gain user interest.

“There’ll be some traction, but I don’t think it’s going to crush [WeChat],” Alexander Shapiro, Beijing-based head of strategy for the branding agency PBB Creative, says of Douyin’s efforts to branch into e-commerce and different social media formats. “I still think the bulk of consumers, […] they’re very much convenience- and trust-oriented, and it’s hard to dislodge [WeChat].”

Shapiro says he thinks WeChat may “take a hit” in the next six months as users experiment more with Douyin and advertisers follow, but he estimates that Douyin’s growth will “start to tap out, from a user perspective, probably in the next 12 to 18 months.”

As an anecdotal illustration of WeChat’s centrality to users in China, Shapiro says he rarely checks his email now because most Chinese clients contact him directly on WeChat, and he has worked in offices where coworkers communicate solely through the app, even when company policy suggests otherwise.

Hu, of Daxue Consulting, is more optimistic about Douyin’s “very promising” development. But, Hu says, WeChat remains a central node for e-payments, ordering meals, calling cabs, and communicating with family, friends, and coworkers: “I would call it a national tool.”

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