Advertisement
ByteDance
TechBig Tech

TikTok owner ByteDance bids farewell to ‘boundless’ expansion as Beijing tightens grip on Big Tech

  • ByteDance’s major reorganisation is a natural transition for the maturing business, as it weathers a tightening regulatory environment, said analysts
  • China’s increased scrutiny on Big Tech casts a shadow over ByteDance’s ventures into online education, fintech and video games

Reading Time:3 minutes
Why you can trust SCMP
0
Beijing-based ByteDance announced a business restructuring this week that includes separating TikTok into a stand-alone unit. Photo: Shutterstock
Coco FengandTracy Qu
TikTok owner ByteDance’s sweeping corporate restructuring, announced earlier this week, will put an end to the company’s aggressive expansion and herald a new era of consolidation for the world’s most valuable unicorn, said analysts.
The reorganisation will see ByteDance divide its sprawling algorithm-driven business into six units, two of them consisting of TikTok and its Chinese sibling Douyin. Chew Shou Zi, the former Xiaomi executive who was appointed TikTok’s CEO in May, will relinquish his dual role as ByteDance’s finance chief to focus on TikTok.

The other four units will be work collaboration unit Lark, business service unit BytePlus, gaming unit Nuverse, and education technology unit Dali Education, said ByteDance co-founder and new CEO Liang Rubo in a memo.

Experts said the move signals that ByteDance, founded by Chinese entrepreneur Zhang Yiming almost 10 years ago, is ready to emerge from the experimental phase and focus on strengthening existing assets.

“The company was boundlessly expanding in different sectors and testing different products just to see which one eventually works out. This required a lot of capital support and the ability to bear losses,” said Zhang Yi, chief executive at Chinese market research firm iiMedia. “Now it is more about improving its business based on what they have, which means reorganising product lines and consolidating resources.”

ByteDance, which made its name by building a series of artificial intelligence-powered apps including TikTok, Douyin and news aggregator Jinri Toutiao, has in recent years sought to diversify its revenue stream by branching into education, finance and gaming.

In a letter to employees in March 2020, ByteDance founder Zhang Yiming singled out education as one new direction that the company was seriously exploring, stressing that he was willing to wait patiently for the new business to bear fruit.

In the same year, ByteDance bought a domestic online payment license by acquiring the parent company of third-party payment service UIPay. In March this year, the company acquired Moonton Technology, the developer of the biggest mobile game in Southeast Asia, Mobile Legends Bang Bang, marking its biggest investment yet in an industry dominated by Tencent Holdings.

Advertisement