China’s ByteDance expects to earn half of its revenue from overseas in five years
Operator of news aggregator Toutiao has been acquiring video content apps including Musical.ly
Beijing ByteDance Technology, the Chinese news aggregator that recently acquired a lip-synching video app popular with American teens, said it expects overseas markets to contribute half of its revenue in five years as it expands services to more countries.
Best known in China for its mobile news app, Jinri Toutiao, or Today’s Headline, which has 120 million daily active users, ByteDance is going through an overseas buying spree that recently bagged the popular teen app Musical.ly, to create a global user base to deliver its content.
The Beijing-based company currently earns most of its revenue from China, and is targeting annual revenue of 50 billion yuan (US$7.56 billion) next year, Liu Zhen, senior vice-president of ByteDance, told reporters on Friday.
“The fundamental reason we want to go global is to connect more information with more people and efficiently distribute information with the power of artificial intelligence,” said Liu, who is in charge of global strategy for Bytedance.
The Beijing-headquartered company has reached 200 million daily active users globally by extending its personalised news and video services into Southeast Asia, Japan and South Korea and by acquiring established content products in mature markets such as North America and Europe.
Liu said the company is expected to do more acquisitions and expand into other markets, but she declined to reveal the war chest ByteDance has set aside for overseas expansion, only saying that the company’s business was healthy and well-capitalised.
Founded in 2012, ByteDance’s most-recent valuation of about US$20 billion makes it one of China’s largest tech start-ups that has not received backing from that so-called BAT – Baidu, Alibaba Group and Tencent Holdings. Alibaba owns the South China Morning Post.
Liu attributed the company’s success to the changing reading habits of mainland Chinese, as well as to its AI-enabled personalised recommendation service. The algorithm that powers this service can determine what readers like, which results in a longer user engagement time. Users spend an average of 74 minutes per day on its Jinri Toutiao app, according to ByteDance.
ByteDance acquired short-video app Musical.ly in November in a deal reportedly worth as much as US$1 billion. It also bought News Republic, a news and video aggregation site that is popular in Europe, and in February acquired US video creation app Flipagram.
The company previously said it plans to invest 2 billion yuan to subsidise creators of short online videos as it expects the format to soon dominate the mobile screens of China’s 700 million smartphone users.