Tencent's Taking the Facebook Approach to Fight Back Against TikTok
ByteDance's TikTok has taken the world by storm, but nowhere is it more popular than in its home country, China, where it goes by Douyin. Douyin has over 500 million monthly active users sharing and viewing short-form videos of themselves. The app's robust growth puts ByteDance in a position to take on the dominant social media and app company in China: Tencent (OTC: TCEHY).
Tencent's WeChat (Weixin in China) had 1.15 billion global monthly active users as of the end of September. Its Moments feature, which is similar to Facebook's (NASDAQ: FB) newsfeed, has been a big driver of its ad revenue over the past couple of years. Social advertising revenue grew 32% in the third quarter, compared to 13% for the overall online advertising segment.
So the growth of Douyin and its push into social advertising represents a considerable threat to one of Tencent's biggest growth drivers. To stem that threat, Tencent is using a strategy comparable to Facebook's attempts to thwart Snap's (NYSE: SNAP) Snapchat and other smaller competitors. It's leveraging its massive user base and co-opting features from its smaller rival to prevent its users from spending as much time in other apps.
Source Fool.com
