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TikTok pulls out of Hong Kong

Last week India banned 59 apps from Chinese developers including TikTok. The ban means big losses for ByteDance and influencers.

As Forbes reported;

“ByteDance has invested more than $1 billion to build its vast Indian user base, and now faces losses of as much as $6 billion, as hundreds of millions of users are cut off.”

The latest hit to TikTok came on Monday night from the US Secretary of State. TechCrunch reported that the US is “certainly looking at” banning the app over security concerns.

In the latest move, the app pulled out of Hong Kong. So far their efforts to distance themselves from China aren’t really paying off. It remains to be seen if their political struggles will curb their seemingly unstoppable revenue growth.

TikTok’s absence in India is helping other platforms fill in the gap with their clone apps as TechCrunch reported.

TikTok is baring it all

TikTok is no stranger to underhanded policies.

From discriminating moderator guidelines that discourage content with people deemed ugly, poor or disabled to listening in on your conversations even when you’re not using the app.

But TikTok wants you to forget about it.

This year they hired an ex-Disney executive as their CEO. They also made him the COO of ByteDance, the China-based parent company that owns the app.

They’ve also opened a Transparency Centre in California which is open to the general public.

TikTok is inviting experts and users to visit them in person, share their concerns and see its policies and processes in practice.

ByteDance wants to show people and governments in the EU and the US that it’s distancing itself from China.

Disclosing how its algorithm works or getting incorporated in the Cayman Islands isn’t likely to curb the suspicions around China’s influence over the app anytime soon.

Conspiracy theories around Chinese companies aren’t novel but there’s more to this story.

We’ve gotten used to having our tech made in California and only ‘harmless’ American companies hoarding our data.

But times are changing.

As more Chinese apps and technologies grab global audiences, it may be the time for the developers, users and policymakers to adjust attitudes and policies for a world less centred around America.

I know what you’re thinking: “What’s going on with TikTok and am I missing out?”

For the uninitiated TikTok (formerly known as allows users to share 5-60 second long videos.

Launched in November 2017, it was the most downloaded app in January 2020 and is now the sixth-largest social media network in the world by monthly active users.

What are people doing on TikTok?

Over half of the active users on TikTok are 13-24 years old who spend an astounding 46 minutes per day on the app. Far more than Instagram or Facebook.

TikTok gives you many reasons to stay on the platform including live streaming, video edition, lipsync, duets and much more.

Because it has so many younger active users, TikTok recently added Safety Mode and Screen Time Management to help parents keep their teens safe on the app.

ByteDance, the company that owns TikTok, describe their app as a mobile-first product that is powered by machine learning.

Nothing new there, right? But the app’s enviable engagement has more to do with its algorithm than anything else. 

What’s so special about TikTok’s algorithm?

Every social media network has its own flavour of machine learning algorithms designed to make us stick around as long as possible. TikTok is particularly good at it.

So good, in fact, that Facebook has created a rival clone app called Lasso that’s being tested in markets where TikTok isn’t big yet. 

When you log into TikTok for the first time, your video feed starts playing the second you open the app. There’s no need for you to even set preferences to start using the app.

The algorithm does that and more for you by learning your preferences and delivering recommendations based on your behaviour.

How do TikTok and its content creators make money?

TikTok has already started several viral trends and launched the careers of many content creators. As an app, TikTok has a commercial model that’s built on rewarding creators in real-world currency by using an elaborate in-game system of Coins and Diamonds.

Users can purchase Coins that can be used for buying virtual goods. Diamonds are earned by content creators and can be redeemed for cash.

TikTok’s revenue from in-app purchases grew to $50 million in Q4 2019. That’s pocket change as far as social media apps go, but at 310% YoY increase in revenue, TikTok is set to top the $100 million mark in 2020.

What you need to know as an advertiser

Let me tell you, as an elder millennial I can’t stand TikTok. But as a marketer, I feel that we need to keep a close eye on this one.

TikTok has the highest number of users in China, followed by India and Brazil. It’s relatively new in the US and UK but has a rapidly growing user base. TikTok even recently launched a TV ad in the UK.

Advertising on TikTok is very similar to Facebook and Instagram. The app offers 4 different types of ads including:

  • Brand Takeover
  • In-feed Native Video
  • Hashtag challenge
  • Branded lense

The average CPM on TikTok is $10 with a minimum ad-spend of $500, which doesn’t necessarily make it an attractive channel for smaller, more frugal businesses.

That’s not to say that TikTok can’t be an effective channel for the right kind of brand and the right kind of advertising. 

TikTok’s users aren’t just familiar with the brands’ advertising, they’re actually more willing to purchase from brands that are supported by the community around them.