[News Inside] Shaking the World with a 10-Second Video

Chinese Startup Ignites US-China Tech Hegemony Conflict
Jiang Yiming, ByteDance Founder

▲Zhang Yiming, Founder of ByteDance

[Asia Economy Reporter Kwon Jae-hee] A short video lasting about 10 seconds that shook the world. The protagonist is ByteDance's 'TikTok,' a Chinese startup. Eventually, the United States regarded it as a 'national security' issue and issued an executive order demanding the business be sold to an American company. Among global unicorn companies (unlisted companies valued at over 1 trillion won), the U.S. had held the top spot until ByteDance surpassed Uber to take first place. Bloomberg News reported this as "a symbolic event where the leadership in the startup world, long dominated by the U.S., shifted to China."

ByteDance is a startup founded in March 2012 in Beijing, China, by software engineer Zhang Yiming.

Zhang Yiming is considered a representative entrepreneur of China's post-80s generation (born after 1980). In 2013, he was selected as one of Forbes China's '30 Under 30 Entrepreneurs.'

Born in 1983 in Longyan, Fujian Province, China, Zhang was an avid reader from a young age. As a middle school student, he meticulously read 20 to 30 newspapers weekly, and after entering Nankai University in 2001, he was known for practically living in the library every week. This became a crucial foundation for his later success in reading world trends and founding a company. His experience is especially reflected in ByteDance's flagship news service.

Zhang named textbooks and autobiographies as the most valuable books, explaining, "Textbooks systematically explain human knowledge and are fundamental for understanding core concepts, while autobiographies and biographies allow indirect experience of how others seized opportunities and endured difficult times."

Zhang's father was a civil servant in Longyan, Fujian Province, but later founded an electronics parts factory in Dongguan, Guangdong Province.

Dongguan, along with neighboring Guangzhou and Shenzhen, rose as a key manufacturing base in China after the 1980s reform and opening-up. Zhang recalled spending his childhood there, enjoying listening to his father talk to his mother about introducing foreign technology.

[Image source=AP Yonhap News]

Zhang Yiming is of Hakka descent (Han Chinese and overseas Chinese settled in southern China and Southeast Asia), known for a strong emphasis on education. Alongside Wang Xing, founder of Meituan?the largest restaurant reservation and delivery app in China?and Fang Sanwen, founder of the Chinese investment community and platform Xueqiu (Snowball), Zhang is considered one of the three prominent figures in the internet industry.

In 2001, Zhang entered the prestigious Nankai University in Tianjin, majoring in microelectronics engineering. However, finding little interest in his major, he later switched to software engineering.

After graduating in 2005, Zhang worked as a developer at Microsoft (MS) and co-founded the Chinese version of Twitter, 'Fanfou,' with Meituan founder Wang Xing. Fanfou attracted famous users including Hewlett-Packard (HP) and amassed one million users within months but was shut down in 2009 due to Chinese government action. In 2009, Zhang co-founded '99fang.com,' an online real estate transaction service, but left after three years to establish ByteDance.

Zhang expressed his unique ambition, saying, "I founded the company to create a service and enterprise that would dominate the world like Google."

ByteDance's core competitive edge lies in artificial intelligence (AI). Its flagship product is the news service 'Jinri Toutiao,' which uses AI to analyze the types of news content users read, the time spent, and news categories to provide personalized services. It is so popular that it has 200 million monthly active users. The service operates solely through AI without news editors or journalists. The key is offering personalized services to readers rather than one-sided editorial control by traditional media.

Jinri Toutiao's user base exploded exponentially, and within four years of its founding, Tencent, operator of the mobile messenger WeChat, offered to acquire it for $8 billion (about 9 trillion won). However, Zhang immediately rejected the offer, drawing attention once again. It was unprecedented to refuse acquisition offers from China's three internet giants (Baidu, Alibaba, Tencent).

[Image source=Reuters Yonhap News]

Additionally, bold and aggressive mergers and acquisitions (M&A) strategies proved effective. In 2016, ByteDance launched 'TikTok,' a service allowing easy creation and sharing of short videos lasting about 10 seconds. A year later, it acquired the original service, the U.S.-based Musical.ly, for about $800 million (approximately 890 billion won), expanding into markets in Korea, Southeast Asia, the U.S., and Europe. TikTok leveraged the Musical.ly acquisition to become the most downloaded app worldwide on app stores.

ByteDance is also known for a corporate culture that boosts employee morale. Employees living within a 20-minute walk receive 1,000 yuan (about 170,000 won) monthly housing support to help them focus more on work. Additionally, all three daily meals are provided free of charge, allowing employees to discuss work even during meals. Zhang attracted attention by granting stock options to the cafeteria chef, aiming to instill responsibility in the person responsible for employees' health. Zhang still advises startup founders that there is no time to waste and that they should spend as much time as possible in the office to focus on work.

Meanwhile, according to Bloomberg's billionaire index (as of February 2021), Zhang Yiming's assets are valued at $25 billion, ranking 64th.