– A Successful Digital Business Model Case
1. Introduction
With the development of Internet technologies, mobile phones have become one of the necessities in our daily life. According to Statista, today, the number of smartphone users is around 3.5 billion in 2020, occupied around half (45.12%) of the world’s total population (Satatista, 2020, see Appendix 1). The popularity of smartphones has increased users’ opportunities to set up and maintain their social interpersonal relationships (Auter, 2007; Igarashi et al, 2008). Thus, there is a huge market potential for Internet companies to design social media apps. At the same time, a new audiovisual culture, which is short video creations, has greatly impacted on apps users. With a long time immersive experiences, a large number of people have a sense of dependence on short video applications (Yang, Zhao & Ma, 2019).
Among a variety of apps designing enterprises, a Chinese company named ByteDance stands out because of its app: TikTok. TikTok became the most downloaded app in the US in October 2018 (Graziani, 2018) and it ranked the third most downloaded app in the world in 2019 (Briskman, 2019). Its success cannot leave without its precise audience positioning, supports of technologies, digital business model and unique digital business strategies. This article will start with a brief introduction of TikTok and mainly focus on its digital business model to objectively analyze why it will be favored by a large number of people worldwide and how it has contributed to TikTok’s success.
2. What Is TikTok
TikTok is a form of social media app, which was owned by ByteDance and first launched for the Chinese market in September 2016, then it launched both IOS and Android platforms to the global market in 2017 (TikTok, 2020). It not only can provide the audiences watching opportunities of consuming short video productions but also simple operations for users to produce short music and lip-sync videos of 3 to 15 seconds and short looping videos of 3 to 60 seconds, and then they are allowed to share their works to social networking community (Guiding Tech, 2019). Today, TikTok is dominating the world and available in over 150 countries, has over 1 billion users (Doyle, 2020).
3. TikTok’s Digital Business Model
3.1 Target Its Audiences By Using AI Technology
TikTok uses AI technology to continue attracting consumers and gaining profits. On the consumers side, TikTok’s AI technology can quickly calculate and understand users’ interests and preferences with their online interaction behaviors. Besides, these clips are short enough so TikTok has more opportunities to gather information from users and build its database for AI’s self-learning. After the analysis, AI will provide the audiences with target video content and advertisements.
Similarly, on the producers’ side, AI will also though analyze users’ behaviors and habits to help short video makers produce viral-like videos: It simplifies the video editing process and suggests users suitable music, tags, filters to improve the quality of their original video (Knowledge, 2019). Then, AI will deliver those videos to its consumers.
3.2 A Digital Ecosystem Of Producing & Consuming Short Videos
As a social media and video-sharing app, TikTok has built its internal digital ecosystem for the audiences to produce and consume short videos. Compared with the traditional business model, it allows people not only to watch short video content but also to produce them. That means some of the consumers are also its suppliers of short video content. Meanwhile, it fits the traits of ‘The triple layered business model canvas: A tool to design more sustainable business models’ (Joyce & Paquin, 2016). Thus, this internal circle of producing and consuming can not only help TikTok secure its initial market but also expand new markets so that achieving sustainable development in the future.
3.3 Creative Digital Business Strategies
Another reason why Tik Tok can grow at a high speed is that its creative business strategies, such as 1. advanced production level; 2. short video contents in the mainstream; 3. celebrity effects; 4.Interesting Advertising Ideas. Take an example of celebrity effects: “In the era of mobile internet, the short-term popularity of new products is largely related to the recommendation of stars and the power of fans.” (Yang, Zhao & Ma, 2019), TikTok signed contracts with a lot of popular stars to promote its brand in the early stage. With the impact of celebrity effects, almost overnight people knew TikTok and this strategy made the number of download increase a lot.
4. Conclusion
In conclusion, TikTok’s AI recipe, internal sustainable ecosystem, digital business strategy have contributed to its success. Meanwhile, its open video content has made people have a sense of dependence and a platform to express their feelings and creativity. However, long screen time can cause health problems such as insomnia, so people need to find a balance of entertainment and rest.
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5. Reference
- Statista. (2020). Smartphone users worldwide 2020 | Statista.
- Auter, P.J., 2007. Portable social groups: willingness to communicate, interpersonal communication gratifications, and cell phone use among young adults. International Journal of Mobile Communications, 5(2), pp.139-156.
- Igarashi, T., Motoyoshi, T., Takai, J. and Yoshida, T., 2008. No mobile, no life: Self-perception and text-message dependency among Japanese high school students. Computers in Human Behavior, 24(5), pp.2311-2324.
- Yang, S., Zhao, Y. and Ma, Y., 2019, July. Analysis of the Reasons and Development of Short Video Application—Taking Tik Tok as an Example. In Proceedings of the 2019 9th International Conference on Information and Social Science (ICISS 2019), Manila, Philippines (pp. 12-14).
- Graziani, T. (2018). How Douyin became China’s top short-video App in 500 days. [online] WalktheChat.
- Briskman, J. 2019. Top Apps Worldwide for Q1 2019 by Downloads. [online] Sensor Tower Blog.
- TikTok, 2020. [online] Available at:https://www.tiktok.com/en/ [Accessed 5 Mar. 2020].
- Guiding Tech. 2019. Top 10 TikTok (Musical.ly) App Tips and Tricks. [online] Available at: https://www.guidingtech.com/top-tiktok-musically-app-tips-tricks/ [Accessed 5 Mar. 2020].
- Doyle, B. 2020. TikTok Statistics – Everything You Need to Know [Feb 2020 Update]. [online] Wallaroo Media.
- Knowledge, V.I., 2019. The TikTok Strategy: Using AI Platforms to Take Over the World.
- Joyce, A. and Paquin, R.L., 2016. The triple layered business model canvas: A tool to design more sustainable business models. Journal of cleaner production, 135, pp.1474-1486.
6. Appendix
Appendix 1: Number of SmartPhone Users
ZHANG Guo's Blog 
Hi Guo Zhang, I really enjoyed reading your blogpost! I am not a user of TikTok myself yet, but I have noticed the hype and the growing number of users lately. Before I sign up, I am asking myself if it is worth “my time”. Is this another “social media” app, which will consume your time and is only a short hype or is TikTok an app that will stay and become something we use every day, and companies start using it as an advertising platform as instagram? I would love to hear your thoughts about it! I will welcome TikTok with an open mind and from what I have heard till yet, it is a great platform to express creativity in!
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hi Guo Zhang. mentioned to Tiktok, I always have some other thoughts to say. firstly, the most important reason why the Tiktok can have so many users, is they signed a number of popular web celebrities and stars who shoot different types of videoes time and again. It can attract numerous imitators to show their life’s abundance. Nearly all my friends are using Tiktok. when they post a video that is a thumb up, they feel attention which makes them happy. And then, there are so many short video platforms in China, but Tiktok is the only one operates in overseas markets, even in Britain. They know how to adapt to the needs of users in different markets. It is cannot deny that the development of Tiptokis certainly considerable, but do you think it can be sustained? why?
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Hi Guo Zhang
I do agree with your idea that users can also participate in generating contents rather than only watch it, which helps its sustainable development.
TikTok has an enormous amount of users; therefore, it allows individuals and organisations to gain instant awareness and response through the platform. For individual and even firms, it is a cost-effective and efficient platform to use. However, the problem with TikTok is not strict in controlling the content of videos, which leads to some inappropriate videos post on the platform and affects the customer’s experience of using the app. If an inappropriate content published, it will be spread out virally in a short time. Do you think Tiktok has some negligence in regulating the release of content? One of Tiktok’s greatest advantages is instant video. If Tiktok wants to improve the auditing standards of the contents, will it affect the instant of posting contents and lose the most significant competitive advantage?
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When I was a kid, I feel ritual when opening a movie; Nowadays, I am not be able to drag the progress bar on my own, and I cannot stand the slow pace at all. Because contents are lacking at that time, and at the present, you don’t lack content at all, what you lack is time.
In 2000, Microsoft Canada reported that the average person’s attention span was only 12 seconds; by 2013, smartphones and social networks were booming, the number dropped to 8 seconds. In other words, in one minute, you will walk at least 7 times. It may take less than a few years, and we will all become “dream tourists” who cannot concentrate.
Our thinking is indeed being transformed which allows us to jump from one link to another, and search engines make us inclined to give up memory. Mobile phones are the biggest transformation of the human brain after languages, books, TVs, computers
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The author’s article uses a lot of objective data to show us the TikTok e-commerce model. And the attached data shows us the current situation of more and more smartphone users. TikTok is based on novel and interesting content operations. Through its advantages as a social platform, it has obtained a large audience mainly for young people. In addition, it uses the psychology of young people and uses the celebrity effect to make it more successful, and to popularize the new media form of short videos. At the same time, the application of AI on TikTok is also a manifestation of the development of digital media technology in this organization. But I would like to see the author compare and analyze TikTok with the same type of organization, so that it can show its advantages.
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