For many years, when it comes to e-commerce, there has been one undisputed leader — Amazon. However, as consumers began changing their buying behaviour, newer brands began to pop up to upend the online shopping juggernaut. Take Shein for instance, the Chinese company that only recently took the world by a storm for its ultra fast fashion approach has overthrown Amazon, topping the chart as one of the most downloaded shopping apps in the world in 2021.

In fact, Shein is not the only one. According to the newest data from Apptopia, two other e-commerce companies leapfrogged Amazon in the global rankings: Shopee, based in Singapore, which serves Southeast Asia and Latin America; and Meesho, based in India, which specializes in social e-commerce for categories including fashion and home products.

All data is iOS + Google Play combined, except for data from China which is iOS only. Source: Apptopia

The US e-commerce giant came in fourth place overall in global shopping app installation last year. Just the year before, Amazon had the most app installs worldwide. It is fair to note though that Amazon is still first in Apptopia’s US rankings for shopping app installs in 2021. This is given considering data from Statista that shows the Seattle-based company holds 41% of the US e-commerce market in 2021.

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Singapore-based Shopee came in first with a total 203 million downloads while China-based Shein came in second with 190 million downloads and the company has been a growing force in the fast fashion market. India-based Meesho took the third spot with 153 million downloads.

Amazon, Shein, Shopee vs social commerce

At this point, online is growing at a torrid pace. New data from fintech and payments research specialists Kaleido Intelligence has found that B2B and B2C e-commerce spend on physical goods and digital services will reach US$6 trillion this year, up from US$4.8 trillion in 2020. 

But it is shopping on social media platforms that will top the chart as it is currently growing three times faster than traditional e-commerce platforms. In fact, it is on pace to reach US$1.2 trillion globally by 2025, according to a study by Accenture. Most of that growth (62%) will be driven by Gen Z and millennial shoppers.

“The social commerce opportunity will nearly triple by 2025. Growing at a CAGR of 26%, the social commerce opportunity will reach $1.2 trillion by 2025. This accounts for 16.7% of the US$7 trillion e-commerce total spend,” Accenture said in a separate report.

The report also believes that China will remain the most advanced market both in size and maturity, yet the highest growth will be seen in developing markets such as India and Brazil. As for the US, social commerce is expected to more than double, reaching US$99 billion by 2025.

The post Shein, Shopee and Meesho overtake Amazon in 2021 appeared first on Tech Wire Asia.

For years, Apple has been using Qualcomm modems in its iPhones before shifting to Intel’s when its relationship with the former started to sour. Following that, news began to surface that the iPhone maker may just create its own modems to cut reliance on Qualcomm.

However, things might take a different turn now as Apple is said to have selected Taiwanese chip giant TSMC to make its 5G iPhone modems instead.

According to Nikkei Asia, quoting people familiar with the matter,  Apple plans to adopt Taiwan Semiconductor Manufacturing Co’s 4-nanometer chip production technology to mass-produce its first in-house 5G modem chip from 2023 onwards.

Additionally, Apple is also apparently working on its own radio frequency (RF) and millimeter wave components to pair with the modem.

That is on top of an in-house power management chip that Apple is producing specifically for the modem. For context, all of the components in the latest iPhone series are provided by Qualcomm.

This isn’t an isolated move by Apple, however. The company has been attempting to reduce its reliance on Qualcomm for several years and the latter has also recently confirmed that its share of iPhone modem orders will drop to about 20% in 2023.

Both companies finally settled a lengthy legal battle over patent royalties in 2019. To be fair, the modem chips segment has long been dominated by Qualcomm, which has built a large patent wall around the technology, as well as Taiwan’s MediaTek and China’s Huawei Technologies.

Intel, which supplied modem chips to Apple alongside Qualcomm since 2016, dropped out of smartphone modem chip development and sold the business to Apple in 2019.

“In addition to saving money on fees it currently pays to Qualcomm, developing its own modem would pave the way for Apple to integrate TSMC’s chip with its in-house mobile processor, multiple sources said,” according to the report by Nikkei.

Apple’s relationship with TSMC isn’t a new one. In fact, the Taiwanese chip titan has been a vital partner for Apple in its strategy of designing more of its own components, and is the sole producer of iPhone processors and M1 Mac processors. 

The move would eventually give the US tech giant more control over its hardware integration capability as well as boost the chips’ efficiency.

“Currently, most mobile chip developers integrate 5G modem systems onto the processor chip,” added the Nikkei report.

Here’s what TSMC is providing Apple with

Modems in smartphones such as Apple’s connect to cellular networks and let devices browse the web, download apps, and make phone calls.

It requires more layers of engineering than some other types of processors. Apple began in-house work on modems about three years ago, and the part typically takes at least two years to build and another year and a half to test.

Basically, for the new 5G iPhone modem, sources told Nikkei that Apple is using TSMC’s 5-nm chip production to design and test-produce the chip.

It will then use the even more-advanced 4-nm technology for mass production. For a phone to go on sale globally, it must be qualified to work on many local networks, a process that requires rigorous field testing by expert engineers.

So with these in mind, it seems that it will take some time after 2023 for the commercialization of Apple’s own 5G modem.

The post Apple: Bye Qualcomm, hello TSMC? appeared first on Tech Wire Asia.

For the past one year, Foxconn, best known for assembling electronics, has been actively announcing partnerships and plans to produce electric vehicles (EVs). The iPhone maker even has ambitions to turn its nascent auto segment into a 1 trillion New Taiwan dollar (US$35.78 billion) business in the next five years. While it took time for its plans to take shape, the company is off to a great start with the unveiling of three EV models recently.

Two weeks ago, the Taiwanese company introduced two passenger EV models — Model C sports utility vehicle, Model E sedan — and a Model T electric bus prototype during its annual Foxconn Technology Day event in Taipei. Its first three EVs will be made via a joint venture between Foxconn and Taiwan-based automaker Yulon Motor, known as Foxtron, the company said during the event.

The company said in a statement that Terry Gou, its founder “has always believed that the adoption of electric vehicles would inevitably be a global trend by the simple fact that it has become the world’s largest and most expensive smart electronic device.” 

From an iPhone maker to an EV maker

To recap, over the past year, the Taiwanese company has forged one partnership announcement per month, in turn “creating a Hon Hai electric vehicle supply chain and distribution network,” Chairman Young Liu said in a company statement. He says Foxconn, formerly Hon Hai Precision, now has an “electric vehicle supply chain and distribution network.”

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According to a report by Forbes, quoting analysts, it said “a share of the global EV market should easily fall to Foxconn now because the three EV models follow a string of related joint ventures since 2014. Those endeavors give the firm expertise that it can combine with its giant factory infrastructure in Asia.”

Among the slew of deals Foxconn has gotten itself into includes with US-based EV startup Fisker and Chinese automaker Geely. Separately, there were even a venture with Stellantis that allowed Foxconn to develop automotive cockpit software and another, with Gigasolar Materials, which gave Foxconn expertise in EV batteries and their components.

“We have done almost one collaboration project each month in the past year to ensure our supply chain capability and potential markets [for EVs],” Liu said at the event. “We are no longer the new kid in town.” For 2020 alone, Foxconn’s total revenue was NT$5.35 trillion, and as per Nikkei’s report, it estimates that its EV-related business will contribute more than NT$10 billion this year for the first time.

Liu reckons that regional manufacturing will be a major trend for the EV industry as producing cars close to the markets where they are sold will help manufacturers keep costs down. That said, he claims that Foxconn will soon announce the details of its EV production plans for Europe, followed by India and then the South American market.

To top it off, just last week, Indonesia’s government said that Foxconn “plans to build” electric vehicles and batteries there. Indonesia’s Investment Coordinating Board (BKPM) released a statement, quoting Liu saying Foxconn “plans to build a comprehensive electric battery and electric vehicle industry in Indonesia” for two-wheel and four-wheel vehicles. “We will not only assemble, but we want to build a whole industry for Indonesia in Indonesia,” Liu said, according to the statement.

Separately, Liu said all plans in different nations will involve partnering with local governments or government-recommended enterprises. In terms of overseas forays, Foxconn recently acquired a manufacturing plant from Lordstown Motors in the US state of Ohio, which the company will use to produce full-size electric pickup trucks for the American market from April 2022. 

To serve Southeast Asia, Foxconn is also building a production facility in Thailand with state-backed oil and gas company PTT whereas in China, the company is collaborating with Zhejiang Geely Holding. Overall, Foxconn has set a target to provide components or services for 10% of the world’s EVs by between 2025 and 2027.

The post iPhone maker Foxconn aims to turn EVs into a US$35 billion business appeared first on Tech Wire Asia.

Leading smartphone maker in China, Oppo, is officially the latest major mobile phone manufacturer to walk down the self-sufficiency path, as it plans to develop its own high-end chips for flagship mobile phones. The move complements that of Google, when it released the Pixel 6 and 6 Pro, its first phones with a custom system-on-a-chip (SoC) called Tensor. 

Other smartphone giants namely Apple and Samsung are also designing their own smartphone chips, as did Huawei before US sanctions decimated its mobile business. The move by Oppo, according to Nikkei Asia, is to mainly reduce the company’s reliance on foreign semiconductor suppliers, such as Qualcomm and MediaTek.

What makes Oppo’s venture more interesting is that it plans to partner with Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), the world’s largest semiconductor maker, to use the latter’s advanced 3nm process technology for the chips. To top it off, Oppo would be part of TSMC’s second batch of customers using this cutting-edge technology, after Apple and Intel.

Oppo may influence other smartphones in China

Oppo is the fourth-largest smartphone maker in the world by shipments, according to IDC, and it is also China’s biggest Android smartphone vendor, holding a 10% share of global smartphone shipments in Q3 2021. To top it off, Oppo ranks fifth worldwide, according to data from research firm Canalys.

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Given that the phone maker shares a supply chain and ownership with Vivo, Realme and OnePlus, Oppo-developed chips could quickly find their way into phones from multiple brands.  The two people with knowledge of the development also told Nikkei Asia that Oppo plans to use its own mobile SoC in phones that will make its debut in 2023 at the earliest. 

Besides the smartphone SoC, Oppo is reportedly also developing its own Image Signal Processor (ISP) for its smartphone cameras. Brands such as Xiaomi and Vivo have launched their own ISP chips given how more users now prioritize camera capabilities in their selection process for new smartphones.

However, Nikkei also said, Xiaomi, one of the first Chinese smartphone makers to set up a semiconductor design team, back in 2014, currently does not use any in-house processors for its smartphones. In fact, most Xiaomi flagship smartphones and current Oppo phones use Qualcomm’s high-end Snapdragon chipsets.

The post As China struggles with a chip shortage, Oppo develops its own appeared first on Tech Wire Asia.

Consumers would be paying more for electronics starting next year as foundries are raking up semiconductor chips prices by as much as 20%. The most recent price hike is being done by the world’s biggest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC). 

It would be TSMC’s biggest price hike in a decade, with most of its most advanced chips to see a 10% increase in price, while less advanced chips used by customers like automakers will cost about 20% more. According to Wall Street Journal, the higher prices will generally take effect late this year or next year.

As it is, TSMC controls over half the global foundry market, making chips for the likes of Apple, Nvidia, and Qualcomm. Known for its cutting-edge tech and high quality, the Taiwanese company normally commands production fees around 20% higher than its rivals, according to industry insiders.

It is however fair to note that prices of semiconductors have been climbing since the last quarter of 2020 amid a global supply crunch. Smaller foundries have repeatedly ramped up their own prices and United Microelectronics, the world’s third-largest player, now charges more than its bigger compatriot for some services, four industry executives told Nikkei Asia.

Why hike the prices of semiconductor chips?

Experts reckon there is a range of factors to these higher prices, including higher material and logistics costs, as well as the race by device makers to secure adequate chip supplies. It has especially been the case since the chip shortage first began to bite late last year.

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All this would mean the prices of chips for consumer products would rise too unless brand-name companies decide to absorb the higher costs. As it is, chip shortages have driven up prices for laptops, which are in high demand because more people are working remotely.

Already, graphics processor giant Nvidia has already warned that supplies of its GPUs will be tight next year: “A supply-constrained environment for the vast majority of next year is my guess at the moment,” Nvidia chief executive Jensen Huang said during an earnings call earlier this month.

Reports even stated the possibility of AMD and Qualcomm raising prices as well, affecting Ryzen CPUs, Radeon GPUs, and the leading-edge smartphones that use the Snapdragon chips. Even consoles like the Microsoft Xbox Series X/S and Sony PlayStation 5 use APUs manufactured by AMD, which are by TSMC may be impacted. 

Another reason behind the price hike would be concerns over lower profitability. TSMC has said it will make US$100 billion in capital investments over three years through 2023. That commitment has fueled qualms about a potential decline in profits as the Taiwanese semicon giant prepares to boost its overseas expansion.

What does this mean, then?

Unfortunately, there really aren’t many alternatives to the world’s largest chipmakers. TSMC’s market dominance gives it more pricing power than suppliers usually enjoy — its chips account for more than half of the global semiconductor foundry market by revenue, according to Taiwanese research firm TrendForce. This makes it the manufacturer of more than 90% of the world’s most advanced chips.

To recall, in April, TSMC executives said that they expected the chip shortage to last through 2023.

All this is the sound of the other shoe dropping—right on your wallet.

Overall, the impact of TSMC’s prices will be felt more obviously from next year, experts say, as the company is still working through existing orders.

In the short term, however, analysts reckon higher prices could push down demand and preserve supply for customers who have no other choice.

So, companies who require more devices — it would be wise to have a more careful look at your budgets in the coming year. 

The post What happens when foundries ramp up prices for semiconductor chips? appeared first on Tech Wire Asia.

Semiconductor foundry Taiwan Semiconductor Manufacturing Company (TSMC) has become the most valuable publicly traded company in Asia, topping tech conglomerate Tencent. Unfortunately, the ongoing chips shortage has caused the Taiwanese giant to have its hands full running its 5nm production facilities at maximum capacity for various clients.

TSMC’s advanced manufacturing nodes are the reason why it is the most sought-out semiconductor company in the world especially amid a global chip drought. In fact, a new report also claims that its 3nm orders have been completely booked. The fact that TSMC is running at full capacity on some of its most in-demand nodes shouldn’t surprise anyone given the ongoing silicon shortage. 

What happens when TSMC is maxed out?

With the company’s fabrication facilities running at full tilt, companies such as Qualcomm have had to turn to Samsung to produce its latest Snapdragon chips, which further strains Samsung’s fabrication capacity.

According to Wccftech, Apple has contracted TSMC to use its N5P node to produce its A15 Bionic chip that will power the upcoming iPhone 13.

Apparently, Apple has placed an order for up to 100 million ‘Bionic’ chips from TSMC, so, considering the ongoing semiconductor shortage, that doesn’t leave much capacity for the incredibly high demand for silicon across pretty much every sector.

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It was already next to impossible for TSMC to undertake any further orders, as it was reportedly forced to give priority to lucrative clients like Apple thanks to the chip shortage. Unless companies have money like Apple, this is bad news for some organizations. Even bigger names like AMD and Nvidia are going to have to fight harder to get the semiconductors they need to power their CPUs and GPUs.

Apparently, Apple will also take advantage of TSMC’s 4nm node to be used in future products, and it has already been reported that the California-based giant has secured the initial shipments for this next-generation manufacturing process.

Qualcomm may switch to TSMC’s 4nm technology for the Snapdragon 898 Plus in late 2022, but only if TSMC has room to accommodate such orders.  There was also a possibility that the Taiwanese firm would be involved in making chips for Google’s Tensor, but it looks like all that responsibility has fallen on Samsung’s shoulders.

Inevitably, Samsung would be viewed as the second-best option, with experts claiming that the Korean firm’s technology is inferior to TSMC’s. But unless the chip shortage does not subside, other clients like Qualcomm, which is using Samsung to manufacture the Snapdragon 888 SoC, might have no opportunity to book orders with TSMC.

The post The 5nm and 3nm chips by TSMC are maxed out. What happens next? appeared first on Tech Wire Asia.

If you had ordered a personal computer (PC) in recent months, most likely you were given a waiting period due to the lack of stocks available. Demand within the PC industry has remained above pre-pandemic levels, but experts reckon we are witnessing a deceleration. The heart of the problem is the global shortage of semiconductors, which is not showing signs of coming to an end anytime soon. 

According to preliminary results by Gartner, Inc., worldwide PC shipments in the second quarter of 2021 witnessed an increase of 4.6% from the second quarter of 2020 to 71.6 million units. Research director Mikako Kitagawa said, “The global semiconductor shortage and subsequent component supply constraints have extended lead time for some enterprise mobile PC models to as long as 120 days.”

This, Mikako said, has led to prices increasing in the bill of materials, which vendors have passed on to end-users. Moving forward, she said rising prices could continue to slow PC demand through the next six to 12 months.

Gartner expects the chip shortage to last at least through 2021, while research firm Canalys predicts it will continue through 2022. According to IDC, component shortages and logistics issues have contributed to higher average selling prices within the PC industry. HP is one of the manufacturers that have raised prices.

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According to the Semiconductor Industry Association (SIA), global semiconductor industry sales were US$ 43.6 billion in the month of May 2021, an increase of 26.2% over the May 2020 total of US$34.6 billion and 4.1% more than the April 2021 total of US$41.9 billion. But although chip manufacturers assiduously continue to produce components, the demand for electronic devices that use semiconductors is reaching new heights and has already far outpaced the global supply of chips. 

The brands that are making strides 

Chromebook shipments were “once again strong” in the second quarter of 2021 with a total combined worldwide PC/Chromebook market growing over 10% YoY, Gartner report shows. The top three vendors in the worldwide PC market remained unchanged in the period, with Lenovo maintaining the top spot in terms of shipments, followed by HP Inc., and Dell.

Gartner said Lenovo’s fifth straight quarter of YoY growth can be attributed in part to its in-house manufacturing operation, which enables Lenovo to be in better control of component shortages, in contrast to its competitors that rely primarily on outsourcing.

“The next three vendors — Apple, Acer, and ASUS — grew faster than the market, owing to improved availability of consumer PCs. The consumer PC market was less impacted by shortages than the enterprise market, as vendors can be more flexible in the system design of consumer models, enabling workarounds for certain supply constraints,” the report said.

Regionally, APAC soared

Gartner highlighted that the demand for PCs from both consumer and business markets remained strong in the Asia Pacific, resulting in 16.5% YoY growth. Echoing global trends, desktop PCs saw stronger growth than mobile PCs in the Asia Pacific region. Notably, the Japanese PC market had a significant decline this quarter of 22.4%. 

As for the US, after three consecutive quarters of double-digit growth, the PC market declined 3.7% in the second quarter of 2021, primarily due to the component shortages, which heavily impacted the enterprise mobile PC market. Mobile PC shipments in the U. decreased for the first time in four quarters, dropping 9.5% in the same period.

The post How has the global chip shortage impacted the PC industry so far? appeared first on Tech Wire Asia.

The M1 chip is also powering the new lineup of Apple iPads in the Pro range, with the tablets unveiled at an event streamed from Apple’s headquarters in Cupertino, at which the company announced a series of upgrades and new services. “The revolutionary M1 chip has been a breakthrough for the Mac, and we’re incredibly excited to bring it to iPad Pro,” said Greg Joswiak, Apple senior vice president.

Joswiak said the chip will enable a “huge jump in performance… all in a device users can hold in one hand.”

The new iPad models highlighted the event after the tablet computers came into greater prominence over the past year. In October 2020, the new generation of full-size iPads was revealed at a similar event along with the Apple A12 Bionic processor, while the newest iPad Air launched at the same time is powered by the Apple A14 Bionic chip. The A14 is so small that the dimensions are measured in atoms, according to Tim Millet, vice president of platform architecture at Apple.

There are over 11.8 billion transistors packed within the minute processor, granting the A14 a massive 40% increase in performance metrics compared to previous chips, including better power efficiency and enhanced overall performance. Users who prefer the ease and mobility of an iPad instead of a laptop for work use, should be blown away by the unprecedented performance upgrade of this device.

Apple Manager, Product Marketing Raja Bose speaking about the new iPad Pros with Apple’s M1 chip during a special event at Apple Park in Cupertino, California. (Photo by Handout / Apple Inc. / AFP)

Worldwide tablet sales reversed a declining trend and rose 13.6% for the year, according to research firm IDC, with Apple capturing one-third of the market. The new Pro tablets have improved displays, better connections to external accessories and cellular models will include 5G connections, Apple said. The devices will start at US$799 in the United States for the 11-inch model and US$1,099 for a 12.9-inch device.

Amid a surge in working from home, “Apple has seen a major renaissance of growth from its iPad… showing 40 percent year-over-year growth the last few quarters as more employees/students went through an iPad refresh,” said Daniel Ives at Wedbush Securities.

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The new iPads also marks the latest attempt by Apple to sway corporate customers away from Microsoft, whose personal computers have been business staples for decades. Microsoft makes a tablet designed for the needs of office workers called the Surface Pro 3 that sells at prices starting at $800. With a 12-inch display screen, the Surface Pro 3 is slightly smaller than Apple’s new tablet.

“We estimate less than half of iPad users globally have gone through a refresh the last year with some clear pent-up demand that these new iPads will unleash in the next few quarters.” The new all-in-one iMacs will offer a thinner design, and incorporate the fingerprint ID and high-resolution cameras seen in Apple mobile devices.

Apple unveiled its “Air Tag” devices which can be attached to items to help people find them, and announced a new purple color for its iPhone 12 lineup. The company also said it would begin offering podcast subscriptions, ramping up competition with rival Spotify.

© Agence France-Presse

The post Apple reveals powered-up iPads after pandemic-fueled surge appeared first on Tech Wire Asia.

In Asia, news of women being harassed, assaulted, or raped has, unfortunately, become common. While this topic needs the attention of leaders and authorities, there has yet to be a finite solution on the ground level. In fact, the increasing number of crimes against women has planted concern in the minds of many people. To date, safety apps have been some of the few answers to help decrease female apprehension and help them go out with confidence. 

Take India’s grim reality of aggravated sexual crimes against women as an example. A survey by Thomas Reuters Foundation in 2018 ranked India as the most dangerous country for women. And an NCRB report found a total of 405,861 cases of crime against women were registered during 2019, showing an increase of 7.3% over 2018 (378,236 cases).

Overall, based on a United Nations report last year, globally at least 7% of women have experienced sexual violence by a non-partner since age 15. On top of that, most detected survivors of trafficking are female and in Southeast Asia, more underage girls are detected than women. Violence against women in the Asia-Pacific region is also perpetrated through sexual and street harassment, menstruation stigmatization and a lack of access to hygiene products, dowry-related violence, forced marriage, digital harassment and cyber violence, marital rape, and lack of access to justice- and survivor-centered support systems.

It is almost like living in a permanent subconscious state of trepidation, to protect themselves from street harassment and violence has become second nature for women. Until we live in a world that makes women feel safe being out alone, these are the personal safety apps providing digital solutions to help women feel more secure when they are out and about.

Safecity in India

Created by the founder of the Red Dot Foundation, Elsa Marie D’Silva, after hearing about the tragic death of Jyoti Singh in New Delhi, the app is an open-source project that maps out incidents of gender violence and sexual harassment in the metropolis. The Safecity app basically encourages people to anonymously report their personal stories of sexual harassment in public places.

In terms of helping to keep women safe, users have access to information on the frequency of street harassment incidents in any given area, visualized by red pins on the map. From there, they are able to better plan their routes to avoid places with a high density of red pins. The app can also help locate the nearest police stations and hospitals, in case of emergencies.

Riding Pink in Malaysia

Riding Pink is Malaysia’s first women-only transportation platform and was founded in 2016 by Denise Tan after someone close to her was robbed at knifepoint by a taxi driver. The app has a big focus on safety—with strict registration requirements for all users and SOS options to send the rider’s messages and location to emergency contacts with a click of the button.  A service by women for women within Klang Valley, Malaysia, Riding Pink offers an alternative for those who are tired of unwanted advances and uncomfortable conversations with male taxi drivers. 

Digi Police App in Japan

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For women visiting or living in Japan and plan to take the train, they can install the Digi Police mobile app to be more at ease, as it is geared towards victims of groping on Japan’s busy rush-hour trains. As women are often silenced due to fear, all they need to do is activate it and it will play “Stop It” at an ear-piercing volume. There is also an option that brings up a message on the phone screen saying “There is a molester. Please help.” Since it was released, this app has been downloaded more than 237,000 times.

Didi Chuxing in China

The largest ride-hailing firm in China has rolled out additional safety measures after a female customer was raped and murdered by a driver on its Hitch service. The company has now included random biometric ID testing for its drivers, as well as an SOS button on the driver and passenger app that connects directly to the police. This is meant to streamline the critical response process.

The post What are the best personal safety apps for women? appeared first on Tech Wire Asia.

TikTok, also known as Douyin domestically in China, always has its eyes set on global social media domination. The video-sharing app has been installed on devices over 2.6 billion times worldwide. It passed the 1 billion-milestone in February 2019 and the 2 billion-figure in April 2020. It reached 2.6 billion by December 2020 and is undoubtedly well on the way to 3 billion now. Amidst such growth, Facebook is trying its very best to catch up.

Despite losing India, its biggest overseas market, the ByteDance-owned app continues to be the top-grossing non-game app in the world as of last year. Sensor Tower’s monthly report shows that TikTok hit US$102.5 million in revenue within the first half of 2020 — an 8.6x increase in revenue over the same time in 2019.

Both TikTok and Douyin amassed over 2 billion downloads and penetrated one-third of all social media users on this planet in less than four short years. For the former, a tempting 500 million users had signed up last year alone, and that’s half of all Instagram users. TikTok is particularly big among teenagers, with nearly 60% of all TikTok users are of that age group – the video-sharing app already beats Facebook’s own social service as well as Facebook-owned Instagram in popularity among America’s youngest and largest generation. Such rapid traction has of course caught the attention of the Facebook social empire.

A tale of two social media formats

TikTok is the Chinese short-video social app where people create parodies and otherwise frivolous short mobile videos that involve either dancing, lip-syncing, or acting out trending scenes, jokes, or songs.  There is less focus on privacy and friends, but rather on attention-grabbing and even educational short video content. Especially since the pandemic, TikTok is known for its remixing of culture: taking the audio from someone else’s clip and reimagining the gag in a new context by layering it atop a video you record.

This is a whole new social media format that has taken the attention of almost everyone who has heard of the concept. As Facebook has done in the past, if the social pioneer couldn’t acquire its competition, it would try to replicate its most popular feature. That’s how Snapchat’s disappearing photo/video feature eventually appeared on Facebook’s and Instagram’s home screens (Facebook-owned messaging service WhatsApp introduced a virtually identical feature not long after).

Mark Zuckerberg has been trying to clone TikTok or taking it over, but all attempts had been resisted by TikTok’s Chinese owner Bytedance. Perhaps, that makes TikTok distinct enough that it will be very difficult to shoehorn into the current versions of Instagram or Facebook, even if they add the remixing functionality. Most videos on those apps or features owned by Facebook aren’t designed to be templates for memes, like TikTok’s are.

Instead, Insta and Facebook’s social graphs are rooted in personal connections and are supported by a well-established ecosystem – but don’t encompass the new wave of Gen-Z amateur performers that TikTok elevates. If Zuckerberg and Co. were to boil down the user experience of TikTok into just its main feature, Facebook will miss out on owning the social entertainment feed.

Facebook’s reign as social media king in jeopardy

To recall, Facebook made its first attempt to kill TikTok in 2018, after it hit 650 million users. Then, America’s social media giant launched a copycat app called Lasso, but it didn’t draw much interest and Facebook shut it down. For context, Lasso has been installed a total of 425,000 times since it launched, while TikTok has 640 million installs in the same period outside of China.

It was the same for Snapchat — with the launch of its disappearing stories, it started to blow up with US teens. Facebook’s attempts to clone it in standalone apps like Poke and Slingshot never gained traction. In fact, none of Facebook’s standalone apps have succeeded unless they splintered off an already popular piece of Facebook-like chat and users were forced to download them like Messenger. 

It wasn’t until Zuckerberg stuck his clone of Stories front-and-center atop Instagram and Facebook that Snapchat’s user count went from growing 18% per quarter to shrinking. There, Facebook used the same strategy laid out in Zuckerberg’s comments on TikTok — push its good-enough clone in countries where the original isn’t popular yet. 

Then in November 2020, Facebook’s Instagram launched a feature called Reels, available only in certain countries, including for India’s 1.3 billion people after TikTok was banned in that country. In a post on its corporate blog, Facebook said Reels lets users record and edit 15-second multi-clip videos with audio, effects, and creative tools.

HOW DOES TIKTOK COMBAT HARMFUL CONTENT?

Joe Devanesan | 9 December, 2020

Zuckerberg has even gone out of his way to say that TikTok deserves more scrutiny. “While our services, like WhatsApp, are used by protesters and activists everywhere due to strong encryption and privacy protections, on TikTok, the Chinese app growing quickly around the world, mentions of these protests are censored, even in the U.S.,” Zuckerberg said during a speech at Georgetown University last year. “Is that the internet we want?” All said and done, TikTok is definitely an existential threat to Facebook, which as the reigning top dog is under constant pressure to maintain user growth across its services.

Business takeaway

Despite being one of the newest social media platforms, TikTok’s user base is growing rapidly and it’s quickly becoming a great opportunity for businesses to reach new, larger audiences. The volume of users and the rate at which it’s growing means that it can provide access to a huge audience and it seems to be easier than on other channels to create video content that goes viral and reaches hundreds or thousands of people.

Also, given that TikTok is used in over 150 different countries, viral videos on the platform can reach all over the world. If a business is looking at reaching international markets, then TikTok is an effective platform for connecting with new audiences in other countries.

While the trend for video marketing isn’t going away anytime soon, TikTok is a good way to expand the reach of video content. If a business is not already using video then it provides a fairly accessible way to incorporate video into an existing marketing strategy.

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