A close look at the competition between Facebook and TikTok

Nov 04, 2021 Social Network

 

Few social giants can stay on top of trends. Since the dawn of social networking, we have witnessed the rise and fall of some online civilizations such as Facebook, YouTube, and Netflix.

Over the past decade, the Facebook empire has dominated our online habits, however, the arrival of China's TikTok marks the dawn of a new digital age.

Yesterday, HoloBase invited Louis Xu, former product technical leader of Facebook, to share his insights about the competition between Facebook and TikTok. He has rich experience in user growth, product commercialization, and product risk control, and is a long-time thinker and observer of the Internet industry in China and the US.

The right things that Facebook did in the pre-TikTok era

In the article The user growth logic of Facebook in the early days, Louis analyzes how Facebook achieved user growth in the early years from a professional perspective.

The first thing that Facebook did is to focus on connections.

"Well, I think Facebook gets lucky getting the Right Market Fit on early days: First, Facebook was launched in schools where students used Facebook to make and build connections. Second, it's A Viral Product, most of the people using Facebook told their friends, which created a viral loop for growth. For Facebook/social apps, the connection is key for retention: P2P connection is the most important asset for Facebook. As the app grows, it's harder and harder to move your connection to other social platforms." He added.

The other thing that Facebook did is to use data-driven technology instead of marketing for growth.

Louis said, "After 1 billion users, they use data-driven technology instead of marketing for growth. That's an important decision as well."

As for this, the fast-growing app TikTok also takes the same strategy.

TikTok is growing fast

Few startups have taken off as quickly as ByteDance, the creator of the highly popular 15-second video app, TikTok. In just two years, TikTok has emerged to compete with some famous companies like Facebook, YouTube, and Netflix.

The TikTok app has been downloaded over 2.6 billion times worldwide, as reported by Sensor Tower in December 2020. In January 2021, TikTok had 62 million downloads. In Q1 of 2020, the app had 315 million downloads, which is the best quarter by any app, ever. 500 million of those come from India, 180 million from China, and 130 million from the U.S. In June of 2020, TikTok was downloaded 87 million times worldwide (with 7.5 million of those coming from the U.S.).

Currently, TikTok is available in over 150 countries, has over 1 billion users, and has been downloaded over 200 million times in the United States alone.

Why the new social media video app is growing so fast?

As for this question, Louis proposed two key points, that is "easy simple product" and "algorithm". He believes that a product that is easy to operate is exactly in line with market demand.

"First, Tiktok makes video recording and sharing much easier. People used to film Youtube videos using heavy DV(landscape), but most people use the phone to record and share videos so we need a better product to fit the market. Second, short videos and high engagement make Tiktok videos better and better. The more data Tiktok collects, the better contents show up in your feed. Increasing marginal benefit, so TikTok can scale really fast."

Meanwhile, one of the reasons that TikTok is growing so fast is also because most of its users are young people, and Facebook is losing young people. Some data shows the number of Facebook's teen users in the U.S. has dropped 13% since 2019 and is expected to drop 45% over the next two years. The number of young users between the ages of 20 and 30 is expected to decline by 4% over the same time.

With the development of mobile cameras, social apps are becoming more visual, while Facebook is still primarily focused on text content. The trend toward visualization of social media is especially prominent among young people. The convenience of shooting in 15 seconds makes more and more young overseas users happy to upload their TikTok videos.

Compare to TikTok, Facebook's number of teen users in the U.S. has dropped 13% since 2019 and is expected to drop 45% over the next two years. Surprisingly, the average age of users on Facebook is 40+ years old now!

The way that Facebook competes with TikTok

Recently, Facebook officially changed its name to Meta and announced its entry into the metaverse, which is a big move that the firm has taken. "Is this Zuckerberg's way of dealing with the aging of the Facebook users?" One of the participates asked.

"Zuckerberg is already using Instagram(Reels) tryna catch up with the market. But it's late and brand awareness and brand positioning are hard to change in people's minds." Louis said.

Indeed, a large number of middle age or old-age users are obsessed with Douyin (the Chinese version of TikTok). And one of the opportunities that made Zuckerberg determined to go all-in on the Metaverse, as analyzed by some Chinese media, was his appearance at a U.S. House of Representatives hearing on April 11, 2018, where he resolved to go beyond the borders of nation-states and build a crypto-financial system that would reconfigure human organization.

Given the long history of Facebook, it can reach 3 billion users through its vast social media product networks such as Facebook, Instagram, Messenger, and WhatsApp. In 2019, Facebook launched Libra, a cryptocurrency, in an attempt to create a borderless "digital currency", and in 2021, it renamed FB as Meta, directly opening a future-oriented Metaverse.

Therefore, from this perspective, Facebook's motive for changing its name is not just to win back the market of young users.

Louis thinks whoever gets upstream makes the rules. Currently, iOS is the utmost system so everyone has to listen to it. And in the next era, metaverse has the chance to become the next big system.