Tik Tok Product Analysis Report

Short videos have become one of the most commonly used software, with Douyin and Kuaishou being the main representative products. This article will delve deeply into the short video industry market from the aspects of policies, networks, technologies, and industry pain points.

Because short videos can provide high-intensity content in a short period of time, they are convenient for users to use "fragmented time" to learn and entertain in different scenarios, catering to the entertainment and cultural needs of people's fast-paced lives. In addition, with the improvement of mobile phone performance, the screen ratio is large and high-definition, the mobile communication system has developed from 2G to 4G and 5G, which can transmit high-quality video images. The acquisition and dissemination of short videos are becoming more and more convenient, resulting in a rapid growth in the number of short video APP users.

1. Market Conditions

According to the "2020 China Short Video Market Research Report" released by Bidachun Consulting, the scale of my country's short video market reached 167.52 billion yuan in 2020. As of June, the scale of China's short video users reached 818 million, accounting for 87.0% of Chinese netizens.

I will analyze the four stages of development of short videos since 2011 from the aspects of policies, national economy, science and technology, etc.

In 2011-2012, short videos were in their infancy

With the official approval of the Ministry of Industry and Information Technology, China Mobile officially launched large-scale TD-LTE technology experiments and 4G deployment in the first quarter of 2011. Shanda Wireless announced at the Wireless Internet New Product Recommendation Conference that it would invest 20 million yuan to establish the Joy Fund for Android developers. The development of mobile Internet technology has spawned a number of short video apps such as Kuaishou and Xunlei Youliao. However, due to limitations in user habits and application scenarios, a large-scale market has not been formed.

From 2013 to 2015, short videos were in a growth platform period.

In the first half of 2013, the number of Internet users in China exceeded 500 million. Under the trend of intelligence, the scale of mobile Internet users in China has gradually approached that of PCs. As of December 2015, the number of Internet users in China reached 688 million, and the number of mobile Internet users reached 620 million. The proportion of Internet users using mobile phones to access the Internet increased to 90.1%, and the Internet users' personal Internet access devices further concentrated on mobile phones.

In 2015, Premier Li Keqiang proposed "Internet Plus" in his work report, which was the first time that a senior Chinese leader extended the concept of "Internet Plus". Xiaoying, Tencent Weishi, Miaopai, Meipai, Xiaokaxiu and others have emerged one after another, driving the rapid development of the entire industry. At the same time, they have innovated in their models, transforming from a single reliance on social media platforms to a development strategy that gives equal importance to social media and tools. However, traffic volume and Internet speed are still important factors restricting users from watching online mobile videos.

From 2016 to 2017, short videos were in a period of rapid growth

In 2016, the State Council issued the "13th Five-Year Plan for the Development of National Strategic Emerging Industries", which incorporated the digital creative field into the national strategic development plan, providing strong support for the development of the short video industry. In 2017, the per capita disposable income of residents nationwide was 25,974 yuan, and people's living standards improved. With the popularization of smart phones, users' fragmented time is being utilized extensively, and entertainment needs are gradually becoming a rigid demand for contemporary netizens. With the popularization of mobile networks, the increase in Wi-Fi hotspots and the operators' preferential traffic conditions, users have been able to watch online videos on their mobile phones.

Since 2016, major companies have increased subsidies for creators to encourage high-quality creative content. The capital market still plays an important role in the mobile Internet during this period, and the short video market is developing in the direction of refinement and verticalization. Short videos have shifted from being dominated by PGC to a model where PGC, UGC, and PUGC coexist. In this model, UGC and PUGC are dominant, and users participate in the production and dissemination of short videos, replacing platforms as the industry's protagonists. Content has become more diversified and the industry's popularity has increased. In 2016, Tik Tok and Huoshan Video were launched. In 2017, Tudou transformed into short videos, Toutiao released Xigua Video, Tencent restarted Weishi, and 360 Quick Video and Baidu Haokan Video were launched.

From 2018 to 2021, short videos are in a mature development stage

In 2018, the State Administration of Radio, Film and Television issued the "Information Network Audiovisual Program Transmission License" to further strengthen the supervision of short video content. Some functions of multiple platforms were taken offline for rectification and new media big V accounts were banned. The China Internet Audiovisual Program Association has released the "Detailed Rules for Online Short Video Content Review Standards" to regulate the healthy development of the short video industry. In 2019, the industry began to shift from traffic competition to content value competition. A report released by the China Internet Network Center shows that as of December 2020, the number of Internet users in my country reached 989 million, and the number of short video users reached 873 million. With the continuous development of high-tech technologies such as big data and cloud computing, the intelligent technology of recommendation algorithms can realize accurate content push and greatly improve the user experience. The short video market has a stable structure and each platform operates in a refined manner.

2. Product Overview and Analysis

2.1 Product Background

Douyin (Tik Tok in English) is a music creative short video social software developed by Beijing Weibo Vision Technology Co., Ltd. and incubated by Toutiao. The software was launched on September 26, 2016 under the name "A.me" and was officially renamed "Douyin Short Video" on December 10 of the same year.

Founder Zhang Yiming was born in Fujian Province in 1983. He graduated from Nankai University with a degree in software engineering in 2005 and founded ByteDance in 2012. In 2013, he was selected as one of "China's 30 Entrepreneurs Under 30" by Forbes and "China's 40 Business Elites Under 40" by Fortune, and is one of the most watched young leaders in China's Internet industry. In 2021, he ranked 39th on the "2021 Forbes Global Rich List" with a fortune of US$35.6 billion.

2.2 Product Introduction

Tik Tok is a software that combines video services and social functions. It is a short video community platform for all ages. Users can use the Douyin APP to shoot short videos to record and share their beautiful life.

On TikTok, people can complete their works by selecting audio provided by the platform or uploading it themselves, and then shooting videos. The Douyin (V15.9.0 version) platform provides 12 different styles of music, including popular, original, Chinese style, European and American, and cover songs; 4 major types of filters, including portrait, landscape, food, and cutting-edge; different shooting methods, including segmented shots of different lengths and 15s quick shots; and a variety of shooting templates, including card points, gameplay, movie feel, vlogs, blockbusters, etc.

2.3 Product Market Share

According to the "2020 China Short Video Market Research Report" released by Bidachun Consulting, Douyin had 500 million active users in March, ranking first, and Kuaishou ranked second with 430 million monthly active users. In addition to the growth in user scale, the biggest breakthrough in the short video industry is the significant increase in user usage time. The report data shows that the average daily running time of Chinese short video users in 2020 reached 24.5 minutes, a significant increase from 21.2 minutes in 2019.

2.4 Product Data Analysis

2.4.1 Application Ranking

According to the real-time ranking of the IOS application list obtained from Qimai data statistics, from February 18, 2021 to May 18, 2021, Douyin has always ranked in the top four in photography and video apps, and has always ranked in the top nine in the overall list. In addition, from January 27, 2016 to the present, it has been selected for App Store's featured recommendations 57 times, and from September 20, 2019 to the present, it has been selected for App Store's real-time hot search recommendations 61 times.

According to the channel distribution chart of Douyin's cumulative downloads on various Android platforms obtained according to Qimai data statistics, as of May 18, 2021, the total cumulative downloads of Douyin on the Andriod platform are 45.4 billion. From April 18, 2021 to May 18, 2021, the average daily downloads in 30 days were 50.83 million. Huawei accounts for 44.73% and OPPO accounts for 30.48%.

The following is an analysis of Tik Tok’s Android app ranking based on the two download channels of Huawei and OPPO.

According to the real-time ranking of Huawei's application list obtained from Qimai data statistics, from February 22, 2021 to May 13, 2021, Douyin has always ranked among the top three in the shooting beautification app category.

According to the real-time ranking of OPPO application list obtained from Qimai data statistics, from February 22, 2021 to May 13, 2021, Douyin has always ranked in the top five in the software list.

2.4.2 Downloads

According to Qimai data statistics, from April 18, 2021 to May 17, 2021, the estimated total number of Tik Tok downloads on iPhone in the past month is: 7,767,072.

2.4.3 Rating reviews

According to Qimai data statistics, all versions of Douyin are rated 4.9, with a total of 30,394,114 ratings, of which 29,053,651 are five-star ratings, accounting for 96%; the current version of the App Store is rated 4.9, with a total of 30,647,408 ratings, of which 29,302,789 are five-star ratings, accounting for 96%.

2.5 Product Positioning

Tik Tok is a short video platform that helps users express themselves and record their beautiful lives.

Many celebrities are on TikTok:

Here you can learn about the latest celebrity content and events! You can talk to Kris Wu, meet Li Xian, and see Yang Zi, Pan Changjiang, etc. All your favorite stars are on Douyin!

Record the beauty on TikTok:

Intelligently match music, one-click video, and many original special effects, filters, and scene switching can help you turn it into a blockbuster in a second, allowing you to easily record your life on Douyin!

Useful content on TikTok:

Life tips, food recipes, travel guides, technological knowledge, news and current affairs, local information, all the practical content you need is on Douyin!

All walks of life on Douyin:

Original musicians, Peking Opera actors, intangible cultural heritage inheritors, barbecue stall owners, couriers, etc., everyone’s real life is on Douyin!

Everyone records themselves, the beauty of life is here!

(Version 15.9.0)

At first, "Tik Tok" was not called "Tik Tok" but A.me (Admire Me). Later, considering that Tik Tok's target market was China, it was renamed Tik Tok. The slogan was also changed from "Let worship start here" to "Record a beautiful life".

Since its launch in September 2016, Douyin was initially positioned as a music short video community focused on young people. It seized on the characteristics of young people, especially the new generation of netizens, who are full of individuality, love to chase trends and try new things, provided a trendy and cool music library for users to choose from, built a 15s music short video community, and took a vertical and differentiated route to acquire users, occupy market share, and gain the first batch of loyal users.

As product functions are gradually improved, the goal is to have stronger social attributes and enhance user stickiness. It is now a short video community platform for all ages. Directly presenting interesting gameplay to users lowers the usage threshold and inspires them to create short videos, strives to decentralize, and gradually spreads TikTok. From a niche APP at the beginning, it gradually became popular.

2.6 Development History

2.6.1 Product iteration

From its launch on September 26, 2016 to May 14, 2021, TikTok has undergone a total of 188 updates.

Data source: Qimai Data

2.6.2 Product Development

Data source: Qimai Data

2.6.3 Early stage of product

According to Qimai data statistics, it can be seen from the estimated download volume of [TikTok] from 2016-09-26 to 2021-05-17 that the download volume has not exceeded 10,000 since its launch in September 2016 to early March 2017; from March 2017 to December 2017, the download volume remained below 200,000. During this period, Douyin did not spend too much energy on operations and promotions, but instead focused on creating products, continuously optimizing product functions and user experience, and improving the basic functions users need to record music videos, such as new versions of the music library, adding new special effects and filters, and overall improvements in sound and picture quality.

It can be seen that as a product that combines video tools with social attributes, in order to increase user activity and usage stickiness, Douyin mainly focused on function optimization and basic social demand functions in the early stage of the product.

2.6.4 Mid-term product

From January 2018 to early August 2019, the number of Douyin downloads remained basically above the average (194,709). Douyin continued to optimize product details in the mid-term, such as the ability to publish pure text and adding a unique Douyin ID for identification. As the number of product users increased, the quality of short videos on the platform began to vary. In order to protect the platform content, on May 6, 2018, Douyin invited all walks of life, user representatives, experts and scholars to hold a face-to-face discussion to formulate the "Douyin Community Convention." We will also improve the comment and reporting functions, and create a good usage environment for users through a two-pronged approach from the platform and users.

In addition, Douyin has also been making arrangements in the social field, such as binding Weibo accounts to personal homepages, continuously improving sharing functions, adding a new note function, and pinning private messages. On January 18, 2019, China Central Television and Douyin held a press conference, officially announcing that Douyin will become the exclusive social media communication platform for the "2019 CCTV Spring Festival Gala", laying the foundation for Douyin to become a national software.

2.6.5 Product Post-production

The growth of active users in the entire industry has slowed down significantly. As major Internet giants begin to focus on the short video field, future industry competition will be more about the usage time of existing users and commercial monetization capabilities. WeChat Video Account was launched at the beginning of 2020. Public data shows that it had exceeded 200 million users by the middle of the year. As a function of WeChat, Video Account connects Moments and Official Accounts, better integrating into the WeChat ecosystem. Relying on the wide penetration of WeChat, Video Account appears strongly in front of the audience, links with WeChat to open up the video social space, and drives the lagging use of short video platforms, gaining users that independent short video apps have not attracted.

From August 2019 to date, after a period of rapid development, the number of downloads of Douyin software has fluctuated around the average line. In the later stage of the product, in order to increase daily user activity and retention, Douyin continued to improve product performance to make the user experience smoother. Use new special effects to make your work more exciting. The comment area experience is optimized to enhance the user's interactive experience.

2.7 Functional Framework

Version: 15.9.0

2.8 Upstream and downstream products

• Content produced by PCG, UCG, and PUCG is published on the Douyin platform, which then pushes precise content to users through big data and recommendation algorithms. Users like and comment on the video content they are interested in and may even share it to other social platforms, generating next-level user viewing. Users can also copy videos of interest and post them on the TikTok platform. At this point, a complete closed loop is formed in content production.
• In addition to using the music and shooting environment provided by Douyin, users can also use third-party software to produce and then publish videos on the platform.
• Excellent UCG users may also sign contracts with MCNs and develop into PUCGs, earning platform commissions by publishing works regularly and in fixed quantities.
• When the platform has a large enough number of users or the platform's users demonstrate a certain level of purchasing power, it will attract third-party merchants to engage in commercial cooperation with the platform to place advertisements, product promotions, etc. Merchants can also register their own official Douyin account on the platform to carry out publicity, live streaming and selling products, etc. Other users purchase products they are interested in by seeing advertisements for them in a large number of videos, or by purchasing them in live broadcast rooms, thus generating consumption. The platform charges merchants advertising fees and shares the consumption generated by users' purchasing behavior.
• When users consume, they need to make online payments, which requires support from a third-party payment platform.
• High-quality UCG and PUCG may be selected by third-party merchants for filming and promotion of their products.
• When users watch their favorite stars or internet celebrities’ live broadcasts, they can also vote for them or forward their live broadcasts to other platforms. The consumption generated by ranking is shared by the anchor and the platform.

2.9 Core Competitiveness

In the era of mobile Internet, information globalization has been achieved, and people’s understanding of the world is becoming more and more convenient. The era of making money by exploiting information asymmetry is gone forever. Compared to before, people are no longer troubled by the lack of information, but are surrounded by a flood of information and drowned by data.

• For mobile apps, whether they can catch users' attention and make them dependent on the app or even addicted to it becomes the key to their survival. For humans, pictures stimulate the brain more directly than words, and with the addition of music and videos , it is easy to become addicted.
• With the popularization of smart phones, users' fragmented time is being utilized extensively, and software that can provide users with rich and concise content that can meet their entertainment needs in different scenarios has become a necessity. Tik Tok started with its 15-second short videos, providing users with short but rich content information while combining multiple functions such as video (pictures), music, and social networking, creating an exclusive product serving young people born after 1995 in first- and second-tier cities.
• Full-screen high-definition playback provides users with an immersive experience . Users can switch video content by swiping up and down on the screen, including news, life, travel, science, celebrities, internet celebrities and other massive video content. Users cannot predict the content of the next video when they scroll down, and this randomness attracts users to continue watching.
• Through algorithms, we conduct in-depth user analysis, calculate user interests, and complete content mining and recommendation in a short period of time. Relying on the recommendation algorithm , videos with a large number of likes and comments will be automatically placed into a larger traffic pool by the algorithm and pushed to more people's mobile phones, achieving fission.
• On Douyin, people can choose from a variety of different styles of music provided by the platform or upload their own audio, shoot videos or combine pictures to complete their works. They can also choose different shooting methods such as segmented shots of different lengths, 15s quick shots, etc. There are even various shooting templates and tutorials such as card points, gameplay, movie feel, vlogs, blockbusters, etc. Present simple and fun gameplay directly to users, and produce video content that satisfies users with simple operations .
• We continue to launch simple and fun special effects, filters, various challenges, and brainwashing music to attract users to like, repost, and even copy and follow along .

2.10 Profit Model

Since its inception, Tik Tok has been planning for commercialization.

• In mid-2017, Douyin began to invite MCNs to join. These MCN organizations produce high-quality video content, and Douyin provides support policies such as traffic and resource exposure to the cooperating MCN organizations. With the rapid growth in the number of TikTok users and the improvement in content production capabilities of MCN agencies, the TikTok celebrity content ecosystem is constantly improving. With their operational and production capabilities, they can more easily create popular videos with high virality, and also contribute to attracting and retaining new users on the platform.
• In September 2017, Tik Tok started its full commercialization in a radical and rapid manner. By launching e-commerce functions and planning an official advertising order platform, Douyin is helping organizations and influencers on the platform realize commercial monetization.
• In July 2018, Douyin officially launched the brand advertising intelligent docking platform "Star Map", which helps customers reach video advertising transaction services with influencers/celebrity and charges fees from it. In the profit-sharing rules of the Star Map platform, influencers and MCNs account for the highest proportion, totaling 85%. Service providers providing advertising docking services take 10%, and the Star Map platform takes 5%.
• Douyin has also launched online pop-up stores, e-commerce mini-programs, Dou+ promotions and other functions. The former is aimed at online promotion, while Dou+ is aimed at the online promotion of offline merchants. Stores can set conditions such as kilometer range, store discounts, user age, etc. to conduct paid promotion and customer acquisition.
• In January 2019, Star Map began to focus on promoting the agency mechanism, expanding brand advertising clients, and lowering the threshold for KOLs.

3. User needs and analysis

3.1 User Composition

Data source: iResearch (2021.04)

Gender ratio of users:

As of March 2021, data shows that 53.64% of Douyin users are male and 46.36% are female.

Age ratio of users:

Users aged 24 and below account for 29.72%, those aged 25-30 account for 25.12%, those aged 31-35 account for 25.06%, those aged 36-40 account for 14.31%, and those aged 40 and above account for 5.79%. Compared with the statement made by the Douyin team in September 2017 that "85% of Douyin users are under 24 years old", in March 2021, only 29.72% of users were 24 years old and below, and 79.9% of the user group was concentrated under 35 years old.

Data source: iResearch (2021.04)

Regional usage:

The ranking from high to low is Guangdong, Jiangsu, Sichuan, Zhejiang, Shandong, Henan, Hebei, Liaoning, Hubei, Fujian and other regions. The top four provinces are all in the southern region, with Guangdong, Jiangsu, Sichuan and Zhejiang accounting for 11.5%, 8.31%, 6.13% and 6.12% respectively.

3.2 User Core Needs

• The new generation of netizens pays attention to highlighting their individuality. People with outstanding skills need a platform to show off their abilities. Ordinary people also want to showcase their works, gain recognition, and satisfy their strong desire to express themselves.
• With the improvement of people's living standards and the popularization of smart phones, users' fragmented time has been utilized extensively, and cultural and entertainment needs have gradually become a rigid demand of contemporary netizens. Users need to browse, like and forward quickly in fragmented time.
• The younger generation’s consumption perspective has changed compared to the previous generation. The internet celebrity economy has emerged as a new force, and celebrities and internet celebrities need a platform to promote products.
• Among TikTok’s more than 600 million registered users, not everyone produces videos. Most users are in a silent "screen-peeping" state, and this "silent majority" will bring huge economic benefits to the TikTok platform. The purpose of their registration on TikTok is to watch videos shared by others, to entertain themselves and kill time. Precise content push is particularly important for this group.

IV. Social Value

By browsing the official website of TikTok, we can see that TikTok’s self-positioning is not just a short video platform for users to kill fragmented time, but its mission is to "inspire creativity, enrich life." It uses its own influence to provide humane services to people all over the world, thereby enhancing its social value.

V. Outlook

1. After taking inventory of hundreds of short video software on the market, the Douyin project team found a lack of apps specifically for young people. After discovering the pain points of the industry, they quickly developed and launched the app. Continuously polish the product in the early stage, and start injecting resources after the product is running smoothly. The rapid rise of TikTok is not based on luck, but on a mature operating mechanism.
2. With the advent of the 5G era, network capabilities will have a leap forward, which means that content presentation will break through from images, texts, and videos to more realistic portraits. It will also combine many innovative technologies such as big data, cloud computing, artificial intelligence, etc. to usher in the era of the Internet of Things and penetrate into various industries. In the environment of the Internet of Things, short videos will have more application scenarios, which will not only broaden the boundaries of the short video industry, but also promote more connections between short videos and other industries. The advent of the 5G era has made sharing short video content more convenient and quicker, and short videos will explode again. Douyin should seize the opportunity to upgrade the audio-visual experience, add somatosensory feedback, achieve an immersive and realistic feeling, and realize a leap forward under this opportunity.
3. As Douyin's user retention time and daily active users increase, it is expected to make breakthroughs in social functions, build a private traffic pool, stimulate user activity, and enhance user stickiness. In addition, the development of social networking by Tik Tok will also enable it to better disseminate content. Users’ social interaction on the platform can help Douyin further lock in user information and obtain more accurate user portraits. Through user profiling, Tik Tok distributes content to users as accurately as possible, allowing users to get a more complete experience.
4. According to BIDA data statistics, the scale of my country's short video market reached 167.52 billion yuan in 2020, with a user scale of 818 million people in June. The current short video track has entered the second half, the capture of the sinking market has been basically completed, the user scale has tended to be saturated, and a dual-giant pattern of Kuaishou and Douyin has been formed. As users’ requirements for short video content increase and consumption habits change, the industry has given birth to a medium-length video track dominated by PUCG. In 2020, the average daily consumption time per person on mid-length video platforms increased significantly, and the mid-length video market is in a state of rapid development. Tik Tok already has 500.63 million monthly active users and an average daily running time of 24.5 minutes per user (March 2020). It has sufficient user portraits, based on which it can extract content that users are interested in, distribute it to users accurately, make personalized recommendations, and create a user experience that other software cannot have, thereby seizing the mid-length video market.
5. According to data statistics provided by Aurora, in the first quarter of 2021, affected by the epidemic, user activity and user time in the local life service industry declined slightly, but starting from March, the industry "bottomed out and rebounded", and the penetration rate, MAU and user time all showed a synchronous increase. Among them, the penetration rate increased by 4.0 percentage points year-on-year, and the MAU was nearly 170 million, with a year-on-year growth rate of 50.8%. According to QuestMobile data, among the top 10 primary industries with the largest monthly net increase in active users in March 2021, various service industries occupied the majority positions. Douyin can try to buy and sell platform traffic, serve the marketing model of third-party local life service platforms, explore customers around industries such as life services, cultural tourism, and catering, and create a one-stop comprehensive service platform for users from the perspectives of technological innovation and ecological construction.
6. The outbreak of the new coronavirus pandemic has changed the living habits of many people, leading more people to try online education. People's acceptance of online education has continued to increase, and online education has become a new trend. For cities with relatively scarce educational resources, K12 online education in particular can help them obtain better-quality educational resources and improve the problem of unbalanced development of educational resources in different regions. Douyin can seize this opportunity and launch its own online education system based on its existing user scale without being restricted by the high customer acquisition costs in the online education industry.

Author: Wangzai7392

Source: Wangzai7392