Meet the Chinese ‘Unicorn’ hot on the heels of Alibaba

Growth | International | Reports | Technology

Guest article by Steve van Belleghem @StevenVBe

People all over the world look to the tech giants in Silicon Valley, such as Google or Apple, for the emerging tech trends.

The area serves as a global centre for innovation in the fields of technology and social media, and these companies have transformed customer expectations and behaviour.

However, in recent years we have seen areas in the East rising up to become the ‘go-to’ destinations for big opportunities in tech. For example, I recently led an “innovation tour” to China and visited a region that is reportedly now involved in the production of as much as 90% of electronic devices being imported all over the world.

China’s AI-Powered News Platform

When we talk about Chinese tech companies, most people think of Alibaba and Tencent – widely regarded as two untouchable giants in China.

However, Bytedance, which was founded in 2012 and is now giving Alibaba and Tencent something serious to think about in the field of content.

Bytedance is the parent company of China’s most popular media site, Toutiao. The word “Toutiao” translates as “headline,” and their slogan is “The only true headlines are the things you care about,” which gives a clue as to what makes them stand out from the crowd.

Toutiao is a new style of media app which uses Artifical Intelligence in order to source and curate daily news via its 4000 partner sites. Some of the content is created by traditional journalists and some comes from social influencers, which are increasingly important in China.

But the real differentiator is that Toutiao uses bots to make automated content tailored to the needs and behaviours of individual users. Users of the app have information that they have an interest in pushed to their homepage using a complex algorithm.

Through the technology of their AI Lab, Toutiao learns each user’s feedback and preferences from every interaction – time spent on an article, what time of day the user reads different content, comments, favourites, likes, dislikes and more. The result is a user experience that is more personalised than that offered by their competitors.

Amazing Level of Usage

Toutiao is now widely regarded as the most addictive media platform in the world. The average user of the app spends 74 minutes per day on the channel, which is particularly impressive when compared with the 50 minutes people spend on average on Facebook and 30 minutes on Snapchat.

It also gets double the daily views that BBC Online receives globally.

Toutiao specialises in short video clips lasting around 10 seconds, which are often funny and engaging so the user can easily watch one after another.

However, it is the combination of AI and personalisation that has really created such an addictive user experience on the platform – it doesn’t just publish content, it pushes it to the individual user in a targeted way.

The app is able to cut through dozens of pages of results on new outlets for the user, solving the perceived problem of ‘too much choice’. No longer do you need to search for the content you like – Toutiao brings it to you, and it is an undeniably convenient experience.

Record-breaking Monetisation

Toutiao has grown quickly to become one of the most used media apps in the world in just a short time. What is perhaps more impressive than the levels of usage, however, is the speed at which Bytedance have been able to monetise the platform.

If you compare the first four years of monetisation of Toutiao with that of other leading tech platforms, including Facebook, Tencent, Twitter and LinkedIn, Toutiao is streets ahead. In fact, only the early years of Google’s monetisation come even close to its rate of growth, but Bytedance have mastered the art of monetising media in a way that has never been done before.

Of course, the impressive growth of Toutaio hasn’t gone unnoticed from investors, and Bytedance is rumoured to be planning to IPO in 2019.

However, while you would almost expect Alibaba or Tencent to be involved, Bytedance are independent and a true competitor to the Chinese tech giants, so it will be interesting to watch if and how they fight back.

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