[NEWS] The SNS Platform War Has Just Begun

Trying to put an end to a 5-year reign

Social networking services (SNS) have become an integral part of our daily lives, offering a platform for people to connect and share information with friends, family, and colleagues online. The popularity of SNS platforms has never been so prevalent, with billions of users around the worl actively engaging on multiple platforms.

There is naturally big competition within the market, and there are newly emerging platforms challenging the ones that have been dominant for years.

ByteDance, famous for being the parent company for the popular online short video platform ‘TikTok’, has launched a new SNS platform called Youshi.

The launch is perceived by many as ByteDance’s attempt to dethrone ‘Xiahongshu’, which is widely considered China’s equivalent to Instagram.

Xiaohongshu is a national SNS and commerce app that is greatly loved by the Chinese MZ generation. Like Instagram, it is a versatile service that includes functions such as photo and video sharing and live broadcasting, as well as shopping mall building and live commerce functions. It is an amazing business model considering that no global service company has achieved so much in both content and commerce wise simultaneously. In China, Xiaohongshu has already fully established itself as the must-have app, functioning perfectly as an SNS and shopping platform.

China’s largest platform company, ByteDance, has been making various attempts to take away market share from Xiaohongshu for five years. The attempts were never really successful. In 2018, ByteDance released an app called ‘Xin Cao’, but decided to stop operation in less than a year after the initial launch. Youshi is the newest attempt by ByteDance, who has been looking for opportunities for 3 years.

Luis Vuitton Live Commerce in Xiaohongshu

Experts explain that the reason ByteDance is aiming for a photo-based SNS platform is to ‘occupy the commerce market’. Zhang Han, a senior researcher at Pangu Research Institutue, said “The biggest problem with Douyin(TikTok’s local service in China) is that its revenue model is relatively weak compared to the incoming traffic” in a conversation with Beijing Business Daily. He added that “Profitability lies in online commerce, and algorithmic know-how is needed to effectively link commerce and social media.”

Another researcher at Zhongjing Media said that “In order for commerce services to successfully settle in SNS platforms, word-of-mouth marketing must be used effectively. It’s a way to beat the competition.”

However, according to the researcher, ByteDance still lacks such know-how. He added, “If you look at the fact that ByteDance’s content recommendation is lacking creating a fandom, it also lacks consistency in promoting the product.”

Then, is the commerce competition a battle that ByteDance can never win? Not necessarily. Almost all companies promoting products on Xiahongshu now target young women. If you rely on such a biased strategy, you may one day come down from the throne. Experts also say that TikTok, which is widely loved by men and women of all ages, and ByteDance, which operates Douyin, can play a significant role in diversifying the commerce industry. Everyone is wondering who will come out victorious in this constantly changing battlefield.