TOs TikTok, the world’s most popular app, comes under increasing scrutiny in response to data privacy and security concerns, policymakers in the West may soon turn their sights on other Chinese platforms that have gone global.
TikTok was created by ByteDance as a foreign version of its popular domestic video-sharing platform, Douyin. But it’s far from ByteDance’s only foreign moneymaker. The Chinese company owns dozens of apps that are available abroad, many of them English-language versions of Chinese offerings.
CapCut is a video editing app used by TikTok creators, while Lark is a workplace collaboration platform. Other apps, notably e-commerce platforms like Shein, have become very popular in the US and UK.
The US Congress is now considering introducing the Restriction Act, which would give the Commerce Department the power to ban TikTok and other apps that pose national security risks. With the main concern about Chinese apps being that they are subject to interference from the Chinese Communist Party, many household names could soon be in the firing line.
cap cut
CapCut is the Chinese version of JianYing from ByteDance. It was the fourth most downloaded app globally in 2022, behind TikTok, Instagram and WhatsApp, according to Statista, which analyzes market and consumer data.
Despite security concerns about TikTok, governments have said little about CapCut. The Indian government is an outlier, having banned the app in 2020 along with a host of others created by Chinese companies.
First released in April 2020, CapCut has been downloaded over 500 million times on the Google Play store worldwide. On Apple devices, it was downloaded 25 million times last month, according to data analysts Sensor Tower. At times in 2021, CapCut was the most downloaded free app in the US.
Lark
Lark, a workplace collaboration platform, launched in 2019. Its Chinese version is called Feishu, but the two platforms operate and store data separately, with Lark being managed from Singapore.
It has already launched in the US, Southeast Asia and Japan, with plans to expand to Europe. Its target audience is multinational companies working with China or Chinese companies working abroad.
Lark combines elements of Slack, Dropbox, Google Docs, and Skype. It’s a minnow compared to ByteDance’s other products, but it’s part of a strategy to diversify the company’s offering.
Now, however, Lark’s future seems uncertain. He deals explicitly with the kind of proprietary data that Western lawmakers and companies would want to keep secure. Ivy Yang, a China technology analyst who previously worked for technology company Alibaba, said Chinese apps followed an “under the radar” development strategy for years before being more widely discovered. But, Yang said, “that trajectory has to change because the US government doesn’t allow them to do that anymore.”
Tencent’s WeChat, which has more than 1.1 billion users, is overwhelmingly used in China, where the all-in-one app is essential for communications, bookings, finances and even health monitoring during the pandemic.
But it’s also popular in other countries, particularly for diaspora communities who want to keep in touch with friends and family in China. Disinformation is particularly rife on WeChat, partly because news is spread in private chat groups rather than public sources, making it harder to monitor.
In 2022, it was downloaded more than 66 million times in China, about 2.1 million times in both the US and Indonesia, and more than 1 million times in Malaysia, Vietnam, and Taiwan.
In September 2020, then US President Donald Trump tried to ban WeChat and TikTok completely. This led to lawsuits and court-ordered stays of the ban, and in 2021 his successor, Joe Biden, withdrew Trump’s executive orders. The Biden administration has also launched national security reviews of apps created by companies with ties to adversarial foreign governments such as China.
WeChat is a Chinese app that is also used in the West, unlike TikTok, CapCut and others, which are Western versions of Chinese apps. In 2021, WeChat said it had separated processes for its domestic Chinese users and those who sign in with a foreign phone number.
But in September last year, users abroad received pop-up messages warning them that “personal data [including] Likes, comments, browsing and search history, content uploads, etc. ”would be stored on Chinese servers.
She in
Shein, pronounced “shee-in”, is the world’s largest fashion retailer. Founded in 2008 in Nanjing, it was the most downloaded fashion and beauty app in the US last year, with more than 27 million downloads, according to Statista.
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Consumers turn to Shein because it’s cheap. But, Yang said, it’s also “a lot more fun.” Chinese e-commerce apps are “much more engaging,” with pop-ups offering discounts and deals to gamify the shopping experience.
Despite the cheap prices, his income is huge. In 2022, it grossed $22.7bn (£18.2bn), putting it in the same league as established giants like H&M and Zara. Rui Ma, a Chinese analyst and tech investor, said Shein’s main advantage was its supply chain. Unlike other fashion companies, Shein works directly with material suppliers and factories, so it has detailed knowledge of its own portfolio. Ma said Shein’s inventory waste “is one-tenth of the industry average,” which has allowed it to keep prices low.
Back
Temu only launched in the US in September 2022, but as of January this year it was the most popular app in the country. The e-commerce platform sells everything from wireless headphones for $5.09 to a cat toothbrush for $0.44.
Its inventory is a central part of its business model: It prioritizes light goods to reduce freight costs and ships to consumers directly from factories in China. This allows you to offer rock bottom prices. It also requires vendors to offer products that are not available on other platforms.
It is a subsidiary of PDD Holdings Inc, a Chinese company that also owns the Chinese internet retailer Pinduoduo. Pinduoduo is the dark horse of the Chinese e-commerce market. Despite being much younger than Alibaba and JD.com, which dominate the industry, Pinduoduo has around 15% of the market share. Ma said PDD had “a team that is really good at execution, and they are taking a lot of the Chinese advantages and their knowledge to expand abroad.”
Yang also notes that as US consumers are increasingly cash-strapped, they are willing to wait longer (Temu’s delivery times can be one to two weeks) for cheaper products. That’s a challenge for US giants like Amazon, which have prioritized speed of delivery above all else.
aliexpress
Last year AliExpress, the online marketplace of tech giant Alibaba, was the third most popular marketplace app in the UK, with 1 million downloads, behind Amazon and eBay. Instead of working directly with factories, it connects small businesses in China with consumers around the world to sell cheap products, often in bulk.
However, despite being backed by China’s leading e-commerce platform, AliExpress has not managed to gain traction in the West as successfully as its newer rivals, such as Temu and Shein. Yang said part of the reason for this was that it didn’t have the “laser focus” of its competitors. Yang said AliExpress was “never really under pressure to prosper” in the West because Alibaba already had many arms in its business, including Taobao, for shopping, and Alipay, a ubiquitous mobile payment system in China.
What’s next for Chinese apps?
In theory, many of the accusations that have been leveled against TikTok, such as that it is bad for children’s mental health or censors political topics, should be less applicable to other Chinese apps that are popular in the West. Fast fashion and cheap cosmetics are less controversial than algorithmically delivered content that is seen as shaping young minds. And shopping apps like Temu and Shein rely on physical supply chains, so they are less likely to change or mask their Chinese ties.
But US lawmakers have warned that any Chinese-owned app could be vulnerable to data privacy breaches or interference from the Chinese Communist Party.
Some analysts have pointed out that the US does not have comprehensive data privacy laws, which means that users of any app have little control over how their data is used.
Ma said, “It doesn’t make much sense to me for a shopping app to catch up with [of scrutiny] as a media app. But my opinion is that it will not stop anyone from trying it.
