How TikTok excels in hooking its users with AI – Matthew Brennan

 

Matthew Brennan

Bytedance, the mother company of Douyin and TikTok, became the first to use artificial intelligence to hook their users in an unprecedented way, says China internet expert Matthew Brennan to Play Crazy Game. The TikTok algorithms turns its users into addicts, in the same way drugs do, says Brennan.

Play Crazy Game:

According to Matthew Brennan, a technology expert and author of the book Attention Factory, Chinese ByteDance, creator of TikTok, knew very well what she was doing when she developed the app.

The author claims that TikTok uses one of the most sophisticated recommendation algorithms in the world and that its resounding success did not happen by chance. “Living in China, I saw firsthand the growth of Douyin (TikTok’s name in that country) in 2017, and the impact it had on everyone around me,” he says.

Behind the application is a highly efficient technological engine, capable of automatically auditing the millions of videos published, categorizing them one by one with keywords. First, each video is released to a few hundred active users for a kind of test. Then there is a crossing of information, the so-called metrics, which map the number of views, “likes”, comments, average viewing duration, shares, etc. All to identify the most popular content and send it to the next level, where it will be released to thousands of active users. The process repeats itself and, according to the result, the content continues to be sent to the next level, released to ever-larger audiences, reaching into the millions.

“ByteDance was the first Chinese internet company to fully dedicate itself to the then-new recommendation technology and to commit to the difficult task of creating a tool that challenges the status quo of human curation. The initial gamble paid off. The foundations of TikTok’s success were laid many years before the app itself was built, and it’s no coincidence that ByteDance was the company that created it,” says Brennan.

All the success of TikTok comes down to the recommendation tool, as it is what hooks the user to content that they like, giving them the false feeling of controlling what they see by moving their thumb up, triggering an infinite scroll bar, where you lose track of time.

By falling into recommendations, the user submits to what the application wants him to see. The more the tool gets it right, the more likely the user is to stay online, ingesting the little reward pills that, like any other drug, will become increasingly irresistible and uncontrollable.

To better understand how the chances of the tool getting it right are high, making the content addictive, we can make an analogy of how recommendations between humans are and how the tool works. Normally, when we read a book that we believe is of interest to someone, we recommend reading it, but buying the book, actually reading it and giving us feedback is a long process, which is 100% at the person’s discretion, and may even not work. in nothing.

The algorithm doesn’t work that way. Brennan explains that it has so-called “machine learning”, that is, it has the ability to learn by tracking user behavior. “What makes TikTok so addictive is that it learns what you like and what you don’t. And it does it very quickly because in one minute you can watch five or six videos. In that time, you have to discard or watch the video, revealing your preferences. In this way, ByteDance can get a lot of information in a very short time”, clarifies the author and adds: “It is an extreme customization”.

The way the algorithm works, the control that the user has over what he sees is practically non-existent. While the person thinks they are making their own choices, they do not realize that they are only providing information on the “substances” that should be put in their addictive reward pills.

More at Play Crazy Game.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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How China’s Tiktok became a global gamechanger – Matthew Brennan

 

Matthew Brennan

Bytedance’s Tiktok has become a global gamechanger, and extraordinary achievements from a China-based company, says innovation analyst Matthew Brennan, author of Attention Factory: The Story of TikTok and China’s ByteDance at Spectra 2021.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Tiktok, Bytedance: the Attention Factory – Matthew Brennan

 

Matthew Brennan

Internet watcher Matthew Brennan, author of “Attention Factory: The Story of Tiktok and China’s Bytedance,” discusses at BW Dialogue Tiktok and Bytedance, and looks at how much the Covid-19 crisis has changed the industry.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Low-hanging fruits are gone for China’s tech firms – Matthew Brennan

 

Matthew Brennan

Growing and making profits on the internet has been relatively easy for China’s tech firms when the industry took off, says veteran Internet watcher Matthew Brennan to the state-owned CGTN. But those easy gains are over now the government stepped in to regulate the industry and massive growth is harder to get, he adds.

CGTN:

In mid-2016, word started to go around that the Chinese internet had started to enter the “second half of the game.” The number of internet users in China exceeded 1 billion by June this year, making it the country with the largest internet user base in the world. But the rate of growth is slowing, from a 20-percent year-on-year growth rate before 2011 to single-digit growth in recent years.

“The bonus period of consumer internet is now fully over,” said Matthew Brennan, a China-based technology analyst. “The lower-hanging fruits are gone, and the growth opportunities are either going international or going into lower-tier cities.”…

“Before, it was very wild in terms of how those companies operated,” said Brennan. “Now it’s a matter of restoring orders.”…

Attempts to develop the industrial internet also surfaced, with a series of policies introduced to use technology to transform China’s industrial base. In November 2017, China’s State Council issued a guideline on deepening the “internet plus” advanced manufacturing to develop the industrial internet.

Given that China is moving up the value chain, there is a strong emphasis on manufacturing from the government’s perspective, said Brennan. “China has a considerable advantage in manufacturing, having been the world factory for many decades now. Keeping that advantage makes a lot of sense.”

More at CGTN.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers request form.

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Tiktok and the attention economy – Matthew Brennan

 

Matthew Brennan (right)

Internet expert Matthew Brennan, author of Attention Factory: The Story of Tiktok and China’s Bytedance discusses the role of Tiktok in generating the attention economy, at the launch of his book in India, with Abhijit Bhaduri.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Shein: global aspirations in a tense regulatory climate – Matthew Brennan

  

Matthew Brennan

Fashion firm Shein developed a new global position, managing through domestic regulatory difficulties and tense relations between China and the US. Internet watcher Matthew Brennan looks at CNN Business how a new kid at the block is faring and looks in many ways like the successful Tiktok.

CNN Business:

Shein positions itself firmly as a global business, with an emphasis on distribution: It ships to more than 220 countries or territories. Its website has no mention of its backstory or even where it’s based, stating only that it is “an international” firm. In recent months, that has led to some suggestions that the retailer deliberately downplays its Chinese roots amid rising biases and political controversy.

“Given the current climate of geopolitical tensions, it can … make sense for Chinese entities to lay low,” said Matthew Brennan, who writes about Chinese mobile technology and is the founder of research firm China Channel. “They just want to do business. This is something that they don’t want to have to deal with. And so I don’t think we can blame Shein for taking that option.”…

Shein has made a name for itself by blitzing social media users with its affordable and trendy clothing catering to young women, including $6 crop tops and $9 minidresses. Similar to Boohoo and ASOS, the company relies heavily on influencer marketing, teaming up with internet stars and celebrities like Katy Perry and Nick Jonas to expand its reach.

The brand is especially popular with Gen Z shoppers on TikTok, where it has become a trend for users to post $1,000 Shein “hauls,” or large purchases. That kind of buzz comes on top of Shein’s affiliate marketing programs, which reward influencers handsomely for spreading the word about its products.

The company is also savvy about keeping users on its platform. Last September, it held a virtual fashion show exclusively on its app, which likely helped it pick up more users, noted Lexi Sydow, head of marketing insights at App Annie. Grammy-nominated singer Ellie Goulding was among the performers.

“They’re just so far ahead in terms of user experience,” said Brennan. “They mix together media and entertainment into the experience, and user-generated content and reviews.”

One of its key differentiators, however, is a concept that analysts are calling “real-time retail.”

They say that Shein has come up with an in-house algorithm that trawls the web — including its own massive customer database — to find out what fashion items are trending on search, and what people are responding to on competitors’ websites…

Shein concentrates on exports, naming Europe, the United States, Australia and the Middle East as key markets. Shein does not publicly break down what its top markets are.

It has recently also seen momentum in Latin America, with app downloads in Brazil skyrocketing 988% in the 12 months to June, compared to the previous year, according to App Annie.

The brand also remains a fan favorite in India, although its platform was booted out of the country last summer amid a crackdown on dozens of apps. Last month, it returned to India through Amazon’s Prime Day shopping festival, leading to excitement among customers.

In some ways, Shein’s rise could be compared to that of TikTok, according to Brennan, who authored the book “Attention Factory: The Story of TikTok and China’s ByteDance.”

“I see so many similarities,” he said, reflecting on how the short video app was regarded before it became a global sensation.

“It was viewed as something that was just for Gen Z. It was sort of viewed as frivolous entertainment … I think the competitors were looking at it similarly, and not taking it as seriously as they should have. And I’m sure that platforms like YouTube and Instagram much regret that now.”

More at CNN Business.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Speed: Shein’s new trend in e-commerce – Matthew Brennan

 

Fashion firm Shein makes inroads into the global market with a smart approach to please its consumers: an unbelievable speed focusing on social media, says e-commerce expert Matthew Brennan to Drapers’ Online. Brennan says that once an item is trending, Shein simultaneously increases social media activity for these products to boost sales further. (currency in British pounds)

Drapers’ Online:

Shein’s appeal is trendy, own-brand designs at ultra-low prices: jewellery starts at 50p, mini-dresses at £5.49 and trench coats can be bought for just £28.49.

The “new in” category for womenswear on its website is updated daily. On 11 August, its website showed 6,531 new products for that day. By comparison, Boohoo’s “new in today” category lists just 177 products and Asos 3,563 products, but neither state what time period this is represents. Asos also includes products from third-party brands.

Shein achieves this through an agile network of suppliers in China, which reportedly get designs to market in as little as three days, says Chinese ecommerce expert Matthew Brennan. In a deep-dive of the business on American business blog Not Boring, Brennan says Shein produces small quantities initially, but if an item sells well, it ramps up production for what he calls “real-time retail”, to describe the etailer’s quick response time to trends. Brennan says that once an item is trending, Shein simultaneously increases social media activity for these products to boost sales further.

More at Drapers’ Online.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Fast fashion is changing an industry – Matthew Brennan

 

Matthew Brennan

Fashion firm Shein has been attracting quite some attention. But behind them, a new industry trend is emerging: fast fashion. E-commerce expert Matthew Brennan explains at Marketplace how the fashion industry is changing fast.

Marketplace:

Matthew Brennan: Real-time fashion refers to the model that Shein’s developed whereby you’re in the Shein app, and you put something in your cart. When they upload a new item, they can actually update the systems that they have in the back end, whereby the action that you take can immediately have an effect on the factory floor. So, everything from the website back end through to the supply chain management system is all linked together.

Kai Ryssdal: But the moral of the story is they’re wired to get it from your phone to being made in lightning speed.

Brennan: Yeah, exactly. For fast fashion, speed is really important, and if you’re able to quickly spin up when an item is doing well, that gives you a sustainable advantage over your competitors.

Ryssdal: You write that Shein is the fastest-growing e-commerce company in the world. If it’s so fast-growing, how come it’s not better known?

Brennan: Shein’s extremely well known within the demographic that it targets. You speak to a woman under the age of 30 in North America, they will usually tell you it’s a brand that they’re very familiar with, typically. But outside of that demographic, you’re right. It’s much less well known.

Ryssdal: Do you think this, what they are able to do, could happen anywhere that wasn’t China, which has the labor force infrastructure for this, it’s got the industrial infrastructure for this? This is sort of China-specific, right?

Brennan: They certainly do have an advantage in the supply chain for China. China’s not the cheapest place to manufacture anymore. You can go to markets like India or Bangladesh; the labor costs are definitely lower in those markets. But China still has an overall advantage in terms of the speed and flexibility, and the overall package of infrastructure is still best in class.

Ryssdal: Let me dig into the whole demographic thing a little bit, of which I am clearly not a member, and that’s fine. But as we started getting ready for this interview, I went to the Shein site, and I clicked around, and there’s a little tab that says, “Men,” and I clicked on that. And look, it’s nothing that I’m ever going to wear. But the question is, are they looking to grow beyond women under 30?

Brennan: Sure. I think you know, when you look at something like this, you start with, you know, appealing to one demographic, and then you can start to expand out from that. So, that’s exactly what we see Shein doing. If we roll back the clock just a few years ago, yes, it was nearly all just women’s fashion. Today, that’s not true. The categories are much more varied. They have men’s fashion, they have household items for your kitchen. So, in several vectors here, we can see that they are clearly expanding their offerings.

Ryssdal: So look, if you’re the new guy running Amazon, now that Jeff Bezos just wants to go into suborbit, are you worried?

Brennan: You could be, you could be. I mean, I don’t want to mislead you into thinking that Shein is on the scale of Amazon. It’s certainly not right now. But if you could think about this, you know, how would a disruptor to Amazon arise? You know, they’re using a model, their model is very, very difficult, perhaps impossible for Amazon to copy, and they’re coming in with a price advantage. You know, if you roll back the clock three years, and if you’d said, you know, could a company come in and compete with Facebook? Most people in Silicon Valley would have said no, that’s not possible. TikTok from China has proven that’s possible. So, it’s not beyond the realm of rational imagination that Shein could do something similar.

More at Marketplace.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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How Shein keeps an edge on its competitors – Matthew Brennan

 

Matthew Brennan

Fashion firm Shein belongs to a new breed of ultra-fast fashion brands that keeps an edge on its more traditional competitors, says innovation expert Matthew Brennan at the Vox. Why is Shein going to crunch fashion companies like Zara?

The Vox:

Toward the tail end of the 2010s, “ultra-fast” fashion brands — Asos, Boohoo, Fashion Nova, and now Shein — emerged as viable competitors to the dominant fashion empires of the previous decade. Last October, Reuters reported that investors think “Zara … is going to be crushed by fast fashion 2.0.” These ultra-fast fashion companies are able to reach millions of young shoppers directly through social media without the need for physical retail space, and relied on search traffic and customer data to foreshadow trends.

But by virtue of Shein’s location and software technology, the retailer developed a speedy edge on its competitors. Matthew Brennan, a Beijing-based writer and analyst of Chinese technology, likened its pace to “real-time” retail. That means Shein is constantly gathering and analyzing customer data and uses that knowledge to craft new designs — within as little as three days.

“Each new design is basically a bet because Shein can estimate how well a product is going to do, but it doesn’t know for sure until it sells,” Brennan explained. “Compared to its fast fashion competitors, Shein is able to take more bets, but at a lower risk. It’s able to place very small initial orders with these factories, about 100 or even smaller.” These batches were much smaller than Zara’s and that of ultra-fast fashion retailers like Boohoo, which reportedly ordered about 300 to 500 units per style. If a specific top goes viral overnight on TikTok, for example, Shein will be able to instantaneously ramp up production on the garment and place additional orders depending on demand.

Shein has spent years cultivating relationships with Chinese garment factories and manufacturers, whereas most Western brands generally outsource this work. Inditex is similarly situated close to a garment production center in the northeast region of Spain, but according to Brennan, business in China moves much faster.

“Shein doesn’t work with very large factories but [with] small to mid-sized workshops that pick up orders daily,” Brennan said. “It’s very much like an Uber system, where new orders are coming into factory owners’ phones and they receive the order. It’s very scrappy, but efficient.”

More at the Vox.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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What Shein has been doing right – Matthew Brennan

 

Matthew Brennan on Shein

E-commerce firm Shein from Nanjing has been operating much under the radar, until last week it last week came with plans of an IPO in New York with a valuation of US$47 billion. E-commerce expert Matthew Brennan, author of “Attention Factory: The Story of Tiktok and China’s Bytedance” explains at Yahoo Finance what Shein has been doing right.

Matthew Brennan at Yahoo Finance:

 This company is a very savvy operator in terms of acquiring users through social media platforms. They were early to Pinterest. They were early to TikTok. They were actually the most talked about brand on TikTok globally the last year. But to be honest, price is a bigger driver. This platform, Shein, the prices on there, it makes Amazon look positively expensive. I don’t know if you have any personal experience of this, but if you talk to anyone on there, the prices are significantly lower than you would expect. And that’s really attractive to their target customer base…

Their model is actually quite innovative. And it’s difficult for their competitors to copy because the thing about fashion is, fashion is very volatile, especially fast fashion. And so if you’re able to operate faster than your competitors in terms of assessing and identifying new trends and getting those garments spinning up, SKUs that are doing well, faster than other people, then you are able to reduce markdowns. And you are able to lower your costs and increase– reach more customers.

That’s what Zara’s done, essentially. From the 1990s, they basically invented fast fashion and created their system, which works for a store network. In the last, say, decade, we’ve seen a new breed of DTC platforms. Brands like Fashion Nova and, in the UK, Boohoo and Asos– which are already publicly listed companies– are doing quite well. Shein, we can view as just taking this up another level. They are faster than the ultra fast item in real-time retail.

In terms of the– they’re taking the data that they’re seeing on their app in, say, America and using that and connecting that directly to the Chinese factory floor. In terms of when people start putting items in a basket in America, they know, OK, we’re going to sell more of this. And they immediately run that through to the factory floor and start ordering more and ordering materials. And the algorithms automate everything. So it’s really quite an innovation that they’ve managed to achieve…

The reason why they’re able to get that price is because the supply chain is unbelievably efficient. They don’t technically own the factories, but they’re so closely linked up with their supply chain management software, that it’s almost– it works effectively as they did, if they did. They’ve been criticized for a variety of things, as you rightly pointed out. There is questions over the sustainability of fast fashion and the environmental impacts. I think those are things that we do need to look at.

But in this context of the target consumer that they’re reaching, obviously, there are people concerned about these things. But it seems that, at least for the people who are buying on Shein, they’re less concerned about the environmental impacts and more concerned about their immediate needs to stay on top of the fashion trends within their social circle.

There’s also been complaints about suspicions of them using things like child labor. I think that those are a little bit hard to believe, given where they’re based in Guangzhou being one of the highest GDPs in China. And so, yes, we do need to look at these issues. But overall, I think these are wider questions about the fast fashion industry that could be applied to many, many companies.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Why Bytedance’s CEO Zhang Yiming left – Matthew Brennan

 

Matthew Brennan

When Zhang Yiming, founder and CEO of successful internet giant Bytedance, left last week his post, speculations on a relation with the government crackdown on internet firms was easily made. Internet analyst Matthew Brennan, who wrote a book on Bytedance, says there might be a link, but different from what was mostly suggested, he says in Marketscreener.

Marketscreener:

People who work with him say Mr. Zhang is introverted and prefers engineering over handling government relations. ByteDance is expanding into online shopping and education, areas that have come under fresh government scrutiny recently, and the increased government engagement would be unappealing for Mr. Zhang, one senior employee at the company said.

“It’s always been the case that a big part of any top CEO’s job in China is government relations, and I doubt Yiming is very comfortable schmoozing with officials,” said Matthew Brennan, a China tech analyst who has published a book on ByteDance.

Mr. Brennan said ByteDance’s overall strategy was unlikely to change and Mr. Zhang had long ago started preparing for a transition. Over the past two years, the founder has gradually transferred management responsibilities to other staff, appointing leaders for its China operations, Mr. Brennan said.

Most recently, Shou Zi Chew, the chief financial officer, was named CEO of TikTok.

Mr. Zhang steered the company through turbulent times in the U.S. The U.S. government last year investigated whether TikTok poses a risk to national security over concerns that China could have access to the personal data of American users; the Trump administration issued an executive order last year that would ban the app unless it found an American buyer.

The order was never enforced and the Biden administration in February shelved plans requiring the sale.

Mr. Brennan said ByteDance would lose a leader known for his cool head and persistence.

“That really helped last year with them holding out and not selling TikTok — perhaps another CEO would have been more emotional,” he said.

More in Marketscreener.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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How Tencent is reinventing itself as a B2B platform – Matthew Brennan/Ashley Dudarenok

 

Matthew Brennan and Ashley Dudarenok

China’s digital landscape is changing fast. Internet watcher Matthew Brennan and marketing guru Ashley Dudarenok discuss how internet giant Tencent is reinventing itself as a B2B platform, and much more.

Matthew Brennan and Ashley Dudanenok are both speakers at the China Speakers Bureau. Do you need them at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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Bytedance will be larger than Facebook – Matthew Brennan

Matthew Brennan (right)

Internet watcher Matthew Brennan, author of Attention Factory: The Story of TikTok and China’s ByteDance dives into the background of Bytedance, the mother company of Tiktok, and explains why the Chinese company will outflank Facebook in the near future.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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China’s culture of overwork is unlikely to subside – Matthew Brennan

 

Matthew Brennan

The shock was all around when a worker at China’s leading IT firm Pinduoduo recently collapsed and died under the pressure of overwork. But despite the fierce reactions, IT analyst Matthew Brennan, author of Attention Factory: The Story of Tiktok and China’s Bytedance, does not expect the culture of overwork in China’s IT firms will disappear, he tells Vice.

Vice:

 “China’s private sector economy is fast-paced, dynamic, and in many areas, intensely competitive. The lucrative and rapidly expanding internet services sector amplifies these characteristics, taking them to a whole other level,” Matthew Brennan, a China-based tech analyst and co-founder of digital marketing consultancy China Channel, told VICE World news.

As the tech industry’s toxic work culture gains prominence in the public consciousness, there is now greater pushback from Chinese employees. In 2019, a GitHub-based protest movement called 996.ICU saw software developers challenging the exploitative practices that run rampant in the industry (ICU is short for Intensive Care Unit). In the 996.ICU GitHub repository, people shared workplace anecdotes, exposed unreasonably demanding tech companies, and designed a software license that forces companies to comply with local labor laws.

Despite such isolated incidents of activism, however, Brennan thinks that the culture of overworking in China is “unlikely” to subside anytime soon. “Business in China’s internet industry is conducted like a brutal guerrilla war in which developers, engineers, and operations staff work themselves to death under grueling schedules in which speed of execution is everything,” he said.

And in this system, tech employees are often “willing to be chewed up and spat out of the system by their mid-30s in exchange for generous compensation or the chance to strike it rich with an IPO.”

More in Vice.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

Are you looking for more experts on China’s digital transformation? Do check out this list