Why the anti-TikTok law in the US does not make sense – Kaiser Kuo

 

Kaiser Kuo

US lawmakers have started debate on a law that would ban the successful TikTok app.  Political analyst Kaiser Kuo dismisses the effort as misguided at best, he writes in the ChinaFile. “In a sense, the threat of TikTok is real: In this crisis of confidence, and in a state of moral panic that we’ll look back on red-faced a decade out, TikTok is causing us to inflict grievous self-harm.”

Kaiser Kuo:

The bill that got through Congress on Wednesday to effectively ban TikTok—let’s not pretend either that this bill isn’t specifically about TikTok, or that a forced divestiture isn’t tantamount to a ban—is the latest example of a classic pattern of American behavior: In a panicked attempt to preserve the American way of life, we undermine that very way of life. This time, we seem to be falling over one another to sacrifice our openness, a cornerstone of American strength, out of exaggerated fear that a social media app owned by a Chinese company could be our undoing. As usual, this whole episode says much more about us than it does about China. We have a terrible track record of making bad decisions while in the throes of a moral panic, from Prohibition to the Patriot Act. A closer analogy can be found in the Trump administration’s moves to restrict Chinese STEM students and researchers from coming and working in the U.S., and the subsequent China Initiative. Out of a fear that Chinese industrial espionage would confer an advantage on Beijing, we somehow decided that we were better off if all that prodigious Chinese STEM talent went back to China or just stayed there.

If we accept that we ought to take preemptive action against threats to national security, even if they are only latent and potential, any actions should address those potential threats in good faith. In this case, the threats are data harvested by social media falling into the hands of the Chinese, and social media being used by China to advance a hostile agenda. The bill now making its way to the Senate does not address either of these threats. Instead, it takes aim only at one relatively minor potential vector. Not only is the preponderance of valuable data on TikTok out in the open—the content itself, not the metadata—and would be there just the same irrespective of who owned the company, but Beijing can easily either buy valuable data from brokers, vacuum it up from other social media properties, or just acquire it the old fashioned way, through hacking.

That the motive behind this bill is not, in fact, data security is driven home by the refusal of legislators to accept ByteDance’s own proposal, Project Texas, which was devised in consultation with the Austin-based tech company Oracle and The Committee on Foreign Investment in the United States (CFIUS) and would see data localized and housed entirely on servers controlled by Oracle with oversight entirely by U.S. citizens vetted and approved by Oracle. Project Texas would make TikTok the most locked-down, secure social media property in the U.S., if not in the world. The notion that even under that plan, Beijing would still decide to squeeze ByteDance just to acquire data it could obtain far more easily, and in ways that wouldn’t seriously imperil the only Chinese social media company to have enjoyed any global success, is just risible.

And influence? If TikTok is a potent vector for Chinese propagandists, one has to ask: How’s that working out for you, Beijing? Across its years of popularity, American attitudes toward China have plummeted, not improved. If we’re looking for causation, it is clear enough that, if anything, it’s our low national opinion of China driving D.C.’s animus toward TikTok. In a sense, the threat of TikTok is real: In this crisis of confidence, and in a state of moral panic that we’ll look back on red-faced a decade out, TikTok is causing us to inflict grievous self-harm.

More viewpoints at the ChinaFile.

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Why Chinese enter the US through the Mexican border – Ian Johnson

Ian Johnson

A large number of the illegal immigrants entering the US from Mexico are Chinese, and not only poor Chinese, says China scholar Ian Johnson in DW. They mostly rely on dubious information on TikTok and have no clue what kind of adventure they get into, he adds.

DW:

The phenomenon of Chinese people entering the United States via the southern border has come to be described by the term “Zouxian,” which can roughly be translated as “take the risk” — and the term’s broad dissemination on social media platforms has led many young Chinese to do just that.

“They rely on social media more in China for getting their information,” said Ian Johnson, a China expert at the US Council on Foreign Relations. “In the Western countries, you would say: ‘What does the mainstream media say about it?’ But, in China, there is no way to fact- check.” Johnson said it concerned him that so many of those young people have no idea what they are getting themselves into.

Johnson said the situation would not just hit the very poor.

“The economic slowdown is affecting broader ranges of the population, including the lower middle class,” Johnson said. He added that increased political persecution under President Xi Jinping has also fueled a desire to leave China behind.

More in DW.

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How China’s internet platforms differ from those in the West – Sharon Gai

 

Sharon Gai

China’s platforms like Shein, Temu, and TikTok can conquer Western markets, but Western retail apps fail to do the same in China. E-commerce expert Sharon Gai gives some reason for that difference in the Australian network ABC.

ABC:

Sharon Gai is an e-commerce author, keynote speaker, and former head of global key accounts at online retail giant Alibaba.

She says the way retail apps are designed in China is “fundamentally very different” from businesses in the West, which tend to focus more on search functionality.

“So their primary goal is to get you into an app very quickly, and then out of the app very quickly as well,” Gai said.

“In China, shopping apps are oriented around discoverability — how long can we keep you inside the app, how long can we entertain you, [and] how many new brands or products or trends or styles can you discover?”

Gai also said China’s huge domestic ecommerce market — which recorded almost $3 trillion in sales last year — enables platforms like TEMU and Shein to find the best formula for attracting new customers.

But while Chinese apps have been able to adapt their models to dominate US, UK and Australian markets, Western apps are struggling to achieve the same success bringing their business to China.

Last week, corporate social media giant LinkedIn announced it was shutting down its China service, InCareer, after pulling its main platform from China in 2021.

According to Gai, what sets Chinese and Western apps apart is how fast they are able to respond to the market’s needs

She said at Alibaba, the team motto “changing the motor of the aeroplane, when you’re flying in the air” means moving fast to address the market.

Gai says it’s this speed that has allowed Chinese companies to adapt to Western markets and become the preferred platforms for shoppers worldwide.

More in ABC.

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Why low-cost platforms are logical winners – Sharon Gai

 

Sharon Gai

Shein, Temu and TikTok have become winning platforms on the internet, and for a good reason, says e-commerce expert Sharon Gai at the Rest of the World. “Globally you have an economic slowdown, so a lot of consumers are also spending less per platform,”

The Rest of the World:

When Temu launched in September 2022, it also drew people in with low prices. In February, it broadcast an ad during the Super Bowl encouraging viewers to “shop like a billionaire” and fill their virtual carts without having to worry about the cost. That weekend, Temu racked 426,000 app downloads in the U.S., according to digital analytics company Sensor Tower.

“Globally you have an economic slowdown, so a lot of consumers are also spending less per platform,” Sharon Gai, the former head of global key accounts at Alibaba and author of Ecommerce Reimagined, told Rest of World. “When there’s a low-cost e-commerce platform that’s emerged out of nowhere, they are obviously going to like it.”

More at the Rest of the World.

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Going global: key for getting rich – Rupert Hoogewerf

Rupert Hoogewerf

The 2023 Hurun China rich list sees changes, and Rupert Hoogewerf, the Hurun Report chairman and chief researcher, sees efforts to go global as a key factor for growing riches, he tells Reuters. PDD’s Temu, ByteDance’s short-video platform TikTok, and ultra-fast fashion brand Shein he sees as examples.

Reuters:

The founder of PDD Holdings saw his wealth swell by US$13.8 billion (S$18.8 billion) in a year, as a slowing global economy drove more shoppers to the Chinese company’s discount e-commerce platforms Temu and Pinduoduo, an annual rich list showed on Tuesday.

Mr Colin Huang, who founded PDD in 2015 and stepped down as chief executive in 2020, was the fastest riser in 2023’s Hurun Rich List, leaping seven places to be ranked China’s third-richest man, with a US$37.2 billion fortune. It also marked the first time he had broken into the top three ranking.

The growth of his fortune reflects the changing e-commerce landscape both in China, where consumer confidence remains low after three years of Covid-19 curbs, and abroad, where shopping platforms such as Temu and Shein are gaining steam. PDD did not immediately respond to a request for comment.

Billionaire Jack Ma, founder of rival Alibaba, which is currently going through a restructuring and working to fend off competition from the likes of PDD, fell one place from 2022 to the 10th spot.

The number of Alibaba shareholders on the list, which ranks China’s wealthiest people with a minimum net worth of 5 billion yuan (S$952.4 million), fell from 18 in 2022 to 12 this year.

Mr Richard Liu, who founded e-commerce giant JD.com, saw his wealth, and that of his wife Zhang Zetian, fall by US$6.2 billion since 2022 to US$8.26 billion, according to Hurun’s list.

JD.com’s shares fell to a record low earlier in October after banks cut its price targets, citing a weaker-than-expected recovery in consumer spending.

“Going global has been one of the key sources of growth this year,” said Mr Rupert Hoogewerf, Hurun Report chairman and chief researcher, citing PDD’s Temu, ByteDance’s short-video platform TikTok and ultra-fast fashion brand Shein as examples.

The founder of bottled water brand Nongfu Spring, Mr Zhong Shanshan, retained his first place on the list for the third year running, with a US$62 billion fortune; while Mr Pony Ma, founder of social media and gaming giant Tencent, was second, with US$38.6 billion.

More in Reuters.

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TikTok, Huawei’s successes are in the US defined as security risks – Shaun Rein

 

Shaun Rein

“When the Chinese get good at something, all of the sudden, the United States says, ‘This is a national security risk’”, says Shanghai-based business analyst Shaun Rein on the tech arms race between China and the US, where Huawei, TikTok, and others got into trouble in the US, in his interview with Ian Bremmer.

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Why China’s livestreamers focus on Europe and the US – Shaun Rein

 

Shaun Rein

Live streaming is a solid marketing tool in China, but some of the live streamers focus now on TikTok for Europe and the US. Business analyst Shaun Rein explains to AP why that shift is happening.

AP:

Many Chinese hosts on TikTok view the U.S. as an emerging market that has yet to be saturated with livestreaming hosts

“There’s more opportunity for growth to target America because the competition is so fierce in China,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. “Livestreaming in the U.S. is at a beginning starting point. There’s more opportunity to grab market share.”

Rein also said Chinese merchants can often price items higher in the U.S. compared to in China, where product margins are often razor-thin.

Chinese livestreaming hosts try various tactics to stand out and build a loyal customer base. For some, it’s personalized customer service, while others use quirky catchphrases and concoct flamboyant online personalities to keep their customers entertained.

More at AP.

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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.

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US and China continue to dominate Hurun global unicorns 2021 – Rupert Hoogewerf

 

Rupert Hoogewerf

The US and China continue to lead the Hurun global unicorn list for 2021, says chief researcher of the report, Rupert Hoogewerf, although China is slightly behind the US, according to the Free Malaysia Today. “With its flagship TikTok closing in on 3 billion daily users, [ByteDance] has now grown to become a serious challenger to Facebook,” the report said.

The Free Malaysia Today:

China fell further behind the US in the number of startups valued at more than US$1 billion, according to a report published today by China-based researchers. However, the two countries continue to dominate the worldwide list of “unicorns”, as the highly valued unlisted companies are called.

The Global Unicorn Index 2021, compiled by Shanghai’s Hurun Research Institute, showed that Chinese unicorns accounted for 301, or 28%, of 1,058 unicorns worldwide, as of the end of November.

In all, 42 countries had at least one unicorn. Collectively, the companies were worth US$3.7 trillion.

Some 74 new Chinese unicorns were added to the list, compared with 254 in the US, which had 487, or 46%, of the global total. Despite the slower growth in China, the two countries together accounted for nearly three-quarters of the world’s unicorns.

India, which added 33 companies to the list, for a total of 54, ranked third.

“The US and China continue to dominate, with three-quarters of the world’s known unicorns, despite representing only a quarter of the world’s population,” said Rupert Hoogewerf, chairman and chief researcher for the report.

But Hoogewerf added: “The rest of the world is playing catch-up, growing their share of the world’s unicorns from 17% two years ago to 26% this year.”

ByteDance, the parent of video app developer TikTok and Chinese sister app Douyin, was the most valuable unicorn on the list, with its valuation surging to US$350 billion, up from US$270 billion at the end of March last year.

“With its flagship TikTok closing in on 3 billion daily users, [ByteDance] has now grown to become a serious challenger to Facebook,” the report said.

Valued at US$150 billion, online financial service provider Ant Group fell to second place after Chinese regulators blocked its listing last year and ordered a revamp of its payment and lending businesses. The moves were part of Beijing’s antimonopoly investigation into parent company Alibaba Group Holding…

Hurun called 2021 the most successful year for startups, backed by the presence of an entrepreneurship ecosystem comprising affluent business people, world-class universities and, more importantly, venture capitalists.

“The role of investors is evolving to mentorship and scale-up opportunities, rather than just providers of cash,” said Hoogewerf. “The world’s leading unicorn investors are building ecosystems with their portfolio, [which is] hugely attractive to the world’s fastest-growing startups.”

Sequoia led the ranks of US investors, which also included Tiger Fund, Accel and Goldman Sachs. All of these more than doubled their investments in the 2021 unicorn list compared with last year.

SoftBank of Japan, Tencent of China and Temasek Holdings of Singapore were among active Asian investors.

The unicorn list also saw 201 companies removed from the ranking: Of those, 137 went public, 25 were acquired and 39 saw their valuations fell below US$1 billion. Some of the biggest decliners in value included Katerra, a US construction company, and Ucar, a Chinese ride-sharing company.

“For every successful unicorn you see, there are thousands of failed companies, as well as a new generation of future unicorns coming through,” said Hoogewerf.

More at the Free Malaysia Today.

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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.

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Leadership shuffle at Bytedance: a good sign – William Bao Bean

Bytedance, the mothership of both Douyin and Tiktok, has reorganized its leadership and its internal organization, including founder and CEO Zhang Yiming. A good sign at a maturing giant, says Shanghai-based VC William Bao Bean at the Asia Nikkei.

 Asia Nikkei:

The leadership changes are a sign of the internet sector’s maturation, according to William Bao Bean, general partner of venture capital group SOSV and managing director of its Chinaccelator affiliate in Shanghai.

“The role of a leader of a large internet conglomerate, especially in China is twofold: It is investor relations and government relations,” he said. “So the skills of building an amazing product and making users super happy and then monetizing them through a creative business model are not the skills necessarily required to communicate on a quarterly basis to investors.”

More at the Asia Nikkei.

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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.

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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.

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