TikTok, the most successful Chinese app that targets foreigners is having an identity crisis - its hunger for overseas market is driving TikTok to fanatically cut ties with China. But the Chinese government will more than likely be offended by TikTok’s friendly words towards the western governments.
Key points:
- Western clothing and sportswear brands like H&M and Nike are now facing boycotts in China for their statements on cotton from China’s Xinjiang region.
- TikTok spokesperson called the Chinese government’s doing in Xinjiang as Atrocities as the company is eager to draw a clear line with China.
- ByteDance, TikTok’s Chinese parent company, is said to be planning an IPO, but it may face clampdown from the Chinese government because of its choice of words.
Late last month, several companies like H&M, Nike, and Adidas started to face boycott in China. This nationwide boycott on westerns brands was triggered by these companies’ statements that they would no longer use cotton products from Xinjiang. It is worth noting that TikTok has also been questioned by the British Parliament on its practices in Xinjiang, and its statement shows its desire to survive in overseas markets.
TikTok is the sister app to the Chinese app Douyin, which is now the most used short video app in China with more than 600 million daily active users. Douyin was the exclusive red envelope interactive partner of CCTV’s 2021 spring festival gala, a uniquely Chinese way of showing its endorsement by the Chinese authorities.
To Chinese netizens, Douyin is an app that they take pride in because it represents Chinese success and value, and TikTok is a Chinese product that targets foreigners, but it’s essentially Chinese. But little did the Chinese know, TikTok has been trying everything to shed its Chinese traits, and had publicly accused what the Chinese government’s doing in the Xinjiang region.
H&M’s Demise
Last November, TikTok, H&M, Nike, and The North Face’s parent company VFC, were called into a British parliamentary hearing to clarify their practices on their practices in Xinjiang. Companies like H&M had to inform the committee of how they utilize technologies to trace the source of the cotton, to prevent them from sourcing cotton from China’s Xinjiang region.
Though the issue was slow to boil, it eventually caught the attention of Chinese government affiliated official media. Then dozens of Chinese celebrities terminated endorsement contracts with H&M and other Western brands.
What followed is public knowledge: H&M stores and products disappeared from online retail platforms like Alibaba, their stores' location info disappeared from online maps, several retail stores had to be closed. The cotton backlash grew to include Nike, Adidas, Burberry, Uniqlo, and Lacoste, “Western brands are finally feeling the wrath of the Chinese consumer, “one Chinese netizen writes in Chinese social media Weibo.
TikTok’s Eager to cut ties to China to gain access to overseas markets
TikTok also took part in the said British parliamentary hearing with all the aforementioned companies. In response to questions from the British Parliament, TikTok spokeswoman Elizabeth Kanter said they are an international company, setting aside ties with the Chinese government to gain access to overseas markets.
When asked about TikTok’s practices in the Xinjiang region, TikTok’s spokeswoman Elizabeth Kanter claimed that TikTok’s parent company ByteDance is not a Chinese company, but an international one.
In TikTok's previous written testimony submitted to the British parliament, Theo Bertram, TikTok's Director of Government Relations and Public Policy EMEA, also said that “the parent company… is not ultimately Chinese, it is outside of China. The key board of directors, the key investors, are largely American,” implying that TikTok is essentially an American company.
But according to a document published in ByteDance’s account, ByteDance debunked the rumor of losing control of TikTok after a possible merger with Oracle and claimed that TikTok Global is 100% owned by ByteDance.
TikTok and ByteDance’s claims may be their proactive strategy for growth overseas, keeping in mind that TikTok is not developing as well in overseas markets as back in China - TikTok is now banned in India with its bank account seized, it's also facing the threat of a ban in the US unless it's acquired by an American company.
TikTok’s executives’ sentiments against the Chinese government
When TikTok was asked if they believe in western medias’ news reports on Xinjiang, Theo Bertram also denounced the Chinese government depiction of Xinjiang by stating that “… I also see the somewhat less convincing answers that the Chinese government is giving on the other side... I think the evidence is increasingly strong, if you are asking
me personally.”
During the hearing, the TikTok spokeswomen volunteered to use the word “Atrocities” to describe things that are happening against the Uyghurs in the Xinjiang region, “We do not operate or disseminate any kind of surveillance equipment, ByteDance Ltd, and any of its subsidiaries are not involved in surveillance equipment, there’s no personnel involved in the atrocities that are happening against the Uyghurs in the region…. TikTok has no connections to the Communist Party. ”
These claims suggest that TikTok executives themselves are dissatisfied and dismissive of the Chinese government's actions. But such expressions and sentiments are feared to raise the alarm of the Chinese government.
Critical Stage of ByteDance
ByteDance is now the second largest internet company in China, right behind Alibaba. But unlike rivals Alibaba and Tencent, ByteDance has steered clear of the FinTech area, making it less a target to the recent anti-trust investigations and regulation clampdown from governments. Last July, ByteDance has made education technology one of its top priorities alongside the short video app TikTok, in hope of mitigating their risk of government regulations.
There had been reports that ByteDance’s shares are trading at a valuation of more than $250 billion in the secondary market, it was at roughly $200 billion just a month ago. Reports of an IPO have also been circulating among investors in recent weeks. ByteDance also just hired Xiaomi Corp.’s Chew Shou Zi as his chief financial officer, fueling speculation over the social media giant’s plans to go public.
But ByteDance is now facing regulatory uncertainties from both the U.S. and China. Beijing regulators have launched a wide-ranging effort to crack down on the country’s powerful technology giants. President Xi Jinping warned in March the government will go after tech firms that have amassed data and market power. Alibaba have just been fined a record of $2.8bn by the Chinese authorities. It’s a sign that the government crackdown on the country's Internet sector is accelerating.
Typically, the Chinese government takes a tough stance on overseas criticism on its Xinjiang issues. TikTok’s comments on Xinjiang may not have been fully noticed by Chinese authorities and boycott-minded netizens yet, but TikTok, which is eagerly pursuing overseas markets, may have to pay a price for this.
Source:
https://committees.parliament.uk/writtenevidence/13247/pdf/
https://www.parliamentlive.tv/Event/Index/ded12629-dad1-4e79-b24b-5ff9aba6b164
