Chinese giant ByteDance, owner of TikTok, saw its revenue rise 70% in 2021 to $58 billion. An impressive result, however, hiding a slowdown compared to 2020. The group had recorded a doubling of its revenue, with three-digit growth. In question, a tightening of the legislation governing the operation of large technology companies in China.
ByteDance directly affected by the crackdown
Hard to believe, but the growth of ByteDance, disclosed by employees at Reuters, looks like a poor performance compared to 2020. That year the company had multiplied its revenues by two to 34.3 billion dollars, an increase of 111%. Other Chinese giants such as Alibaba and Tencent have also seen a slowdown in their turnover due in large part to Beijing’s crackdown on Big Tech.
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The government has put in place for several months now a set of rules aimed at supervising their activities. Last September, Byte Dance, for example, had to reduce the connection time of users of Douyin, the Chinese equivalent of TikTok, aged under 14 to 40 minutes a day. Its advertising revenue was directly affected.
ByteDance’s growth is expected to slow further in 2022 as the Chinese government continues to increase its crackdown. On March 1, new regulations will be put in place governing how tech companies can use recommendation algorithms.
A reorganization to safeguard growth
ByteDance retained its second place in the Chinese online advertising market in 2021, with 22% market share according to a study published by the Interactive Marketing Lab Zhongguancun. The group is preceded by the e-commerce giant Alibaba and closely followed by Tencent, which specializes in internet and mobile services. In 2021, the overall growth of Chinese advertising revenues fell to +9.3% in 2021, against +13.8% a year earlier, proof of the effects caused by the new Chinese regulations.
To address the downturn, the company announced a sweeping reorganization in November that will see its operations divided into six business groups: TikTok, Douyin, work collaboration provider Lark, business services unit BytePlus, video game company Nuverse and educational technology unit Dali Education.