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ByteDance’s success comes as it faces pressure in the US over censorship concerns. Photo: Getty

TikTok owner ByteDance becomes second-largest digital ad player in China behind only Alibaba

  • ByteDance comes in second behind Alibaba but ahead of Baidu in China’s digital media spending market by revenue
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TikTok’s owner ByteDance has overtaken Baidu to become China’s second-largest digital ad player, accounting for 23 per cent, or 50 billion yuan (US$7.1 billion) of all digital media spend in the country in the first half of 2019, leapfrogging Baidu and Tencent and behind only Alibaba.

The owner of the global short video hit app, which is facing pressure in the US over censorship concerns, achieved 113 per cent growth in ad revenue in the first half compared to the same period last year, according to the China Media Inflation Trend Report 2020 conducted by consultancy R3.

Alibaba Group Holding accounted for 33 per cent of all digital media revenue, worth 72.1 billion yuan, in the first half with Baidu in third place with 17 per cent, or 36.9 billion yuan of revenue. Tencent Holdings was fourth with 14 per cent.

Alibaba is the parent company of the South China Morning Post.

ByteDance’s TikTok has become one of the very few Chinese-owned apps to achieve success outside China. TikTok currently ranks second after American subscription video on-demand streaming service Disney+ in the entertainment category in the US iPhone app store, according to data provider Sensor Tower.

This Chinese-backed news app is beating ByteDance in US app store rankings

TikTok, valued at US$78 billion late last year, has repeatedly defended itself against US allegations saying that it stores US user data locally with backup redundancy in Singapore.

Despite the political pressure, Western social media giant Facebook has taken note of ByteDance’s rapid rise and expansion overseas. Instagram, owned by Facebook, launched a new TikTok-like video-music remix feature in Brazil this month.

“We're trying to first see if we can get it to work in countries where TikTok is not already big before we go and compete with TikTok in countries where they are big,” Facebook founder and CEO Mark Zuckerberg said of the new service, in a leaked audio recording in October.

The Chinese company taking on Spotify and Apple Music

Zuckerberg, in the two-hour recording of him speaking to employees, praised TikTok as the first Chinese internet product to successfully go global.

Founded by former engineer Zhang Yiming in 2012, ByteDance booked better-than-expected revenue of between 50 billion to 60 billion yuan (US$7 billion to US$8.4 billion) in the first half of this year, according to a September Reuters report, citing people familiar with the situation.

For more insights into China tech, sign up for our tech newsletters, subscribe to our award-winning Inside China Tech podcast, and download the comprehensive 2019 China Internet Report. Also roam China Tech City, an award-winning interactive digital map at our sister site Abacus.

This article appeared in the South China Morning Post print edition as: ByteDance is China’s second-biggest digital ad player
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