TikTok: Disrupting Global Social Media amidst Rising Geopolitical Risks and Other Concerns
| Case Code: BENV047 Case Length: 12 Pages Period: 2017-2022 Pub Date: 2023 Teaching Note: Available |
Price: Rs.300 Organization: ByteDance Industry: Media Countries: United States Themes: International Business, Data Privacy, Digital Marketing,Platform Model |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
What led to the popularity of tiktok?
TikTok’s growth was attributed to several reasons. One of the major reasons was its low entry barrier, i.e. a user needed neither friends nor followers. Users also did not have to create an account to use the platform, watch videos, or get personal recommendations. A user needed an account only when he/she wished to upload videos, follow video creators, or to comment on other videos..
Geopolitical Risks…
TikTok’s Chinese ownership had raised several concerns in global markets where TikTok had its presence. Its parent company ByteDance was incorporated in the Cayman Islands (See Exhibit V for ByteDance’s corporate structure). TikTok had investors from all over the world from Japan’s SoftBank to America’s General Atlantic. Since its headquarters were in Beijing, there were concerns by the regulators that it could be under the influence of the Chinese Communist Party..
…And Concerns
In 2018, Indonesia banned TikTok for allegedly promoting pornographic and inappropriate content and blasphemy. The ban was lifted after TikTok erased inappropriate content from its app..
The Road Ahead
Despite TikTok’s popularity, the uncertainty in global markets and the crackdown of tech firms in China caused some damage to ByteDance. In 2022, Tiger Global, an American investment-management company, reduced its valuation of ByteDance by about 25% in 2021 to under US$300 billion..
Exhibits
Exhibit I: TikTok’s Five Year Revenues
Exhibit II: Types of TikTok Advertisements
Exhibit III: Time Taken by Social Media Platforms to Reach the 1 Billion User Milestone
Exhibit IV: Comparison of Top 10 Social Media Platforms (2021)
Exhibit V: Corporate Structure of ByteDance
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