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Bytedance set to launch messaging app Flipchat

In 2018, Bytedance emerged an important player in the video sector dominated by Tencent. Now, Bytedance wants to enter another market controlled by Tencent’s WeChat - social network.

Dec 12, 2018 by A. Alfaro
Bytedance set to launch messaging app Flipchat

Bytedance is all set to launch messaging app Flipchat over the weekend. 2018 saw Bytedance--not without controversy--making great strides, thanks to its news-aggregator service Toutiao and short-video apps such as TikTok or Kuaishou, among other services.

However, Bytedance’s success has triggered a bitter brand war. Last spring, Tencent demanded an apology from Bytedance for circulating an article showing Tencent’s videogames in a bad light. Tencent’s CEO Pony Ma threatened to sue Bytedance’s CEO Zhang after the latter said Tencent’s Weishi was a clone of TikTok.

In 2018, Bytedance emerged an important player in the video sector dominated by Tencent. Now, Bytedance wants to enter another market controlled by Tencent’s WeChat - social network.

To that end, Bytedance has even hired former developers of WeChat, according to 36Kr. Bytedance has also registered the domain http://flipchat.cn under the English name Flipchat. (Flipchat’s Chinese name is Feiliao 飞聊). The move suggests Flipchat could also be looking to expand outside China.

“Flipchat has all the ingredients to make it big,” entrepreneur Li Xueling was quoted as saying by 36Kr. Li Xueling is the founder of NASDAQ-listed YY (欢聚时代), a voice-messaging app. He knows what it is like to be a competitor of Tencent. Ten years ago, Tencent’s messaging apps did not offer voice message services, much to the disappointment of gamers. Li Xueling saw a business opportunity and repurposed YY’s services to enable it to send voice messages while playing video games.

WeChat rules the roost in Chinese instant messaging market with 1.08 billion monthly active users. New players like Zidanduanxin (Bullet Message), Echo or Zepeto do pop up from time to time, but very few survive. If Flipchat wants to emulate YY’s success, it should locate a demand WeChat is unable to meet as of now. Bytedance’s primary strength is the smart use of algorithms and artificial intelligence to recommend content for users. The company also has massive amounts of data at its disposal.

Last year, Zhang Yiming revealed his intentions to enter the social network market. The main difference between a news media product and a social media product is the degree of integration between the product and the user. In a social media product, users are both consumers and producers of content, whereas, in a media product, there is a clear distinction between content creators and consumers. Bytedance has succeeded in creating a media empire, but it has not yet linked users and content.

Questmobile, TikTok, Huoshan, Watermelon Video have all eaten into Tencent’s Internet traffic. The engagement for short apps has gone up to 8.8% from last year’s 3.6%. Tik Tok’s unexpected rise has caught Tencent off guard.

Bytedance held its last financing round in November and has a valuation of USD 75 billion. Before getting listed, Bytedance is busy diversifying into fields such as fin-tech and e-commerce. However, the time spent on Bytedance’s apps has decreased 0.1% between June and September. The monthly active users across Bytednce’s apps stood at 254 million with a growth of 14.5% - a tad lower than expected figures.

Bytedance’s services are replaceable compared to Baidu, Tencent and Alibaba. Also, Bytedance has not integrated its services into a single ecosystem.

A. Alfaro

A. Alfaro is a Beijing-based freelance reporter. He focuses on China's politics, culture and society. He can be reached at varofaro@gmail.com. 

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