Many of our readers in Southeast Asia have already heard, or even tried, Tik Tok. A few are asking us recently why it became so popular – because nobody had heard of them a year ago.

Well, Tik Tok is the international version of the popular Chinese short video app “Dou Yin”, owned by Toutiao, the aggressive news aggregator that is reported to carry a valuation of US$30 billion.

“Dou Yin” itself is not much older than Tik Tok – barely a bit more than 400 days since the first iteration was launched.

Many of our readers in Southeast Asia have already heard, or even tried, Tik Tok. A few are asking us recently why it became so popular – because nobody had heard of them a year ago.

Well, Tik Tok is the international version of the popular Chinese short video app “Dou Yin”, owned by Toutiao, the aggressive news aggregator that is reported to carry a valuation of US$30 billion.

“Dou Yin” itself is not much older than Tik Tok – barely a bit more than 400 days since the first iteration was launched.

To this day, Tik Tok has reached more than 10 million installs and stood with 4.5 rating on Google Play.

Especially, it stays in the top 10 across many big markets across Southeast Asia: Indonesia, Thailand, Malaysia and Philippines. In the Video Player category, it stands almost indisputely at the top.

On Google Trends, Tik Tok is also really popular across Southeast Asia.

So what is Tik Tok

Probably its Google Play description gives the best explanation what Tik Tok really is:

Tik Tok is a short-video social platform powered by music. Whether it’s dance, free-style or performance, creators are encouraged to let their imagination run wild and set their expressions free. Designed for the new generation of creators, TikTok allows users to quickly and easily create unique short videos to share with friends and the world. TikTok is the new cultural benchmark for young creators. We strive to empower more creative minds to be part of the content revolution.”

Does that remind you of .. Musical.ly?

Yes, Musical.ly, a Chinese video social network app for video creation, messaging, and live broadcasting that went really popular among the new generation across many developed countries.

In fact, Toutiao acquired Musical.ly last year for as much as US$1 billion. The Musical.ly experience (of successfully operating a social content platform outside China) is incorporated into Tik Tok, so is part of the team that has this experience.

This, together with the huge war chest of Toutiao, are key reasons of Tik Tok’s rapid ascent.

Not to mention that Toutiao’s international efforts are led by Liu Zhen, a former Uber executive who herself had lots of global knowhow and experience.

 

Why Southeast Asia?

A couple of reasons:

  • Young(ish) population

About 30% of the population in Southeast Asia are between 18 and 24 years old (in comparison, the ratio for China is 8%). This is the perfect age group for Tik Tok.

  • People (especially young people) in the region are very social

People tend to spend a lot of time on social networking services – many find ways to express themselves there, and share with family and friends.

Based on algorithms, Tik Tok empowers people to reach the right audience to gain Likes and Follows as long as they keep producing good quality content.

  • No strong rivalries in these markets

Dou Yin acquired huge market in the domestic market in China, even facing fierce competition with Kwai, a UGC short video app that is probably valued at between US$18 billion and US$20 billion.

In Southeast Asia, aside from a few small competitors (often also run by Chinese companies), Tik Tok does not really face any competition. Yes, there is YouTube – but the methodology is so different that you can hardly see them as direct competitors.

  • The online influencer ecosystem is mature in main Southeast Asian countries  

In main countries in the SEA, online influencer ecosystem has grown rapidly (and often organically) in Instagram and other Social Networking Services. There are many influencers with more than 100,000 fans, up to millions. Tik Tok is gaining much of its content from the mature online influencer ecosystem in the region.

So that’s it?

With Tik Tok’s rapid ascent, market-leading position and huge warchest, does that mean the door for short video apps in Southeast Asia has been shut?

We do not think so. Although with higher entry barrier than before, there are many opportunities in video content in the region. It is still a new industry where new business models can be experimented and scaled.  

If you have a good, innovative business model, and sufficient backing, you can still enter the market. Specifically, you need to have:

  • Algorithm Excellence
  • Capital (and the ability to raise more capital easily)
  • Understanding of the local market
  1. Understanding of localised product operations
  2. Understanding of local online influencer ecosystem
  3. Understanding of local online traffic ecosystem

If a team is well equipped with all of the key resources and core competencies above, it can still disrupt the market, accumulating tens of millions of active users along the way.

Thanks for reading The Low Down, insight and inside knowledge from the team at Momentum Works. If you’d like to get in touch with us about any issues discussed in our blog, please drop us an email at hello@mworks.asia and let us know how we can help.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.

 

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