ByteDance Suffers Lackluster Growth of Advertising Business in China

ByteDance
(Source: ByteDance)

On Thursday, The Paper reported that ByteDance’s Commercial Products Department held a general meeting on Thursday during which it was suggested that advertising revenue had seen no growth in China over the past six months. ByteDance refused to give a comment on the matter.

A source said, “It’s certain that ByteDance earned less in ads than previous years.” The firm’s popular short video platform Douyin hasn’t seen greater earnings, and its news aggregator Toutiao is even on the verge of making a loss. ByteDance is now undertaking an organizational and strategic review. It recognizes that some problems are caused by bloated organization, and it now highlights business innovation and better management, downplays short-term goals, and strives for long-term breakthroughs instead.

Some e-commerce observers, however, point out that the sluggish growth of ByteDance’s ad revenue doesn’t include its fast-growing e-commerce business. They think the ads revenue brought by the e-commerce business has made up for the education business affected by the country’s so-called “Double Reduction” policy, and its e-commerce GMV may equal that of Kuaishou this year. At present, Kuaishou and Taobao are considered the top live-streaming e-commerce platforms in China.

Internet user traffic in China is almost at its peak, and this has impacted short video platforms. Both Douyin and Kuaishou, China’s largest video sharing platforms, have experienced sluggish growth in the number of users and usage time. Compared with last June, the monthly active users of Douyin increased by only 20 million, while the average daily active users in Kuaishou decreased by 2.1 million and the average MAU decreased by 13.6 million in the second quarter of 2021.

Since 2020, Douyin has made some adjustments to its business. For example, the platform proposed social play, transforming into a way of life and entertainment for users.

Tech Planet previously reported that Douyin and Kuaishou both tested independent search portals outside of app and web pages. In the first half of this year, Zhang Nan, CEO of ByteDance, revealed that Douyin video search had over 550 million MAU. Douyin pays more attention to the search of video content, and obtains the search results through video, which makes the video presentation more intuitive and vivid.

SEE ALSO: As Zhang Yiming Leaves ByteDance’s Global Board, Liang Rubo and Eight Core Executives Step Forward

Douyin works in more fields than just video content. The search results contain graphic content such as Toutiao encyclopedia and Toutiao articles, and this complements its search display content and also satisfies users who like to watch graphic content.