2023 JULY ISSUE
Some Insights About
Social Media
Written by Andrew Sia
Share this article !
From the Desk of the Publisher
We wrote about the apps that are the most downloaded in the U.S., four out of five are from China. It is not incidental but the tech giants in China are really the leaders in the tech world. We found out many of them are the new comers and each of them have enjoyed the great success.
We have to say that while we were preparing the article, the new app from TikTok, Lemon8 streamed through our computer and we covered them also in this writeup. We searched their logo and picked up the one from Spain and this is to proof that they have already appeared in other countries.
We shared our concern which the influence of these apps as the youngsters have suffered psychologically and mentally from inappropriate contents. We feel that the cyberspace should be under the surveillance and regulations should be set up to protect our younger generation.
Key Players
According to the market-insights service, Sensor Tower, the most downloaded app across the U.S. app stores are in the orders of CapCut, Temu, TikTok, Shein and then came Facebook, the only non-Chinese app among the top five.
It is the numbers of Chinese apps and their popularity they earned from the daily lives of the young Americans and it is not surprise to have drawn the concerns from the U.S. government. The use of the algorithms allows China to know the interest of the young consumers in the U.S. and the Chinese tech companies use the pool of affordable talents to constantly fine-tune their product features.
The apps came from companies founded by young generation of tech entrepreneurs who are looking for international growth especially in a China market which is built by firewalls and quickly became saturated. They have to look for outside. They started first to leverage China’s one billion internet users to test the user’s preferences and use them to optimize their AI model at home. Then they export their tech overseas and spend lavishly to promote their apps.
Temu has been around for quite a while, in fact it is owned by Pinduoduo which has a way of operating not accepted by the Western world. Temu is known for the low-price merchandise and in many instance resulted the counterfeit products being sold through that have left them with many angry customers.
Temu, an online retailer who launched in the U.S. in September 2022 and boasting overwhelmingly low prices with extensive items from clothing to electronics and even musical instruments. In the U.S. it is Boston-based. It ranks number 1 on the Apple’s app store for much of 2023. It is using the hashtag #temu and gains exposure on TikTok.
They all use the tactics to cut out the middleman and allow Chinese vendors to sell directly to American consumers and ship directly to skip the U.S. warehouse. And because of the direct shipment, they avoid any import duty naturally. Their continuity to reiterate products to meet user demands and they can kill the market recklessly.
But the popularity of the apps has gotten them caught in the crossfire of U.S.–China geopolitical tension. We have seen TikTok in particular which has led to its TikTok’s Chief Executive Shou Zi Chew to deny in front of the Congress for Beijing’s potential influence over the app.
A bill is gaining momentum to be passed in Washington would result in a blanket ban of broad categories of Chinese technology and this will include the U.S. teenagers’ favorite apps if it is passed.
So that we know Temu’s headquarters in located in Kebayoran Lama, Jakarta, Indonesia. It is also incorporated in Delaware and has its U.S. headquarters in Boston, Massachusetts. As aforesaid, it is a subsidiary of Chinese-based PDD Holdings Inc.
TikTok with its Chinese counterpart, Douyin, is owned by its parent company ByteDance. It hosts user-submitted videos with durations of a few seconds to something no longer than 10 minutes. Due to its popularity with the underaged, many complains for addiction concerns that some users have difficulty to stop using TikTok. And countries that have banned from using the app and they are found as the following:
Asia – Afghanistan, Armenia, Azerbaijan, Bangladesh, India, Iran, Pakistan and Syria.
Canada – Its government banned TikTok from all government-issued mobile devices.
Europe – The European Commission and European Council banned TikTok from official devices.
Belgium – Banned from all federal government work devices.
Denmark – Its Ministry of Defense banned TikTok on work devices.
United Kingdom – The government banned on electronic devices used by ministers and employees.
United States – The dispute started from Trump administration and it is continued by Biden administration, and the latest was the hearing of its CEO before the Congress over concerns of national security.
TikTok was fined for £12.7 million for misusing children’s data in the U.K. which is the latest of its controversies.
Shein changed its parent company from a Hong Kong-registered company to a Singapore-incorporated entity.
Shein was founded in China originally and has become one of the world’s largest online fashion retailers. Its supply chain is rooted in Guangdong province and known for its low price and cut out its middleman. It is known for its extremely low-price merchandise manufactured from China and ship directly to customers in more than 150 countries.
This unfair practice has drawn the attention of the countries that they are shipping their merchandise and we are starting to hear complains.
Online fashion group Shein projects its revenue will be more than double to nearly $60 billion in 2025. Its last year’s sales revenue was $22.7 billion. In the meantime it is seeking for investors for their IPO this year.
This would put Shein further ahead of its competitors, Zara and H&M, the two-fashion retail giants. And if the IPO will take place, it will be one of the largest listings yet of Chinese companies in the U.S. this year.
Analysts pointed out that the enthusiasm of young women for Shein are coming from Gen Z, born between 1997 to 2013, and they are more open to new apparel brands than other generations. It is important to retain their loyalty and Shein should learn how to sell more diverse and expensive clothing lines.
Shein mentioned to sell third-party products on their website, and they also work closely with Temu.
Meantime they have planned for building three large distribution centers in the U.S. The first one would be in Whitestown, Indiana and they are expanding their current warehouse of 1 million square feet to 1.5 million square feet. The second one is planned in Southern California in the spring of 2023. The two distribution centers will hire a combine workforce of 3,000 people in 2025. A third one is now planned for the Northeast.
CapCut, who is TikTok’s video-editing partner, is also an app and also owned by ByteDance. This video-editing app can help people to create online videos and memes, has gained its popularity in recent weeks. It allows people to edit videos easily with various templates, filters, visual effects and music. It is a tool to produce clips that look more professional and can be loaded on other platforms like Instagram and YouTube.
CapCut was launched in 2020 and it has now 200 million monthly active users. Not to forget TikTok has more than one billion users globally. And because it is a tool app, it has largely avoided regulatory scrutiny over its practice of handling user data. But CapCut still collects contents like photos and videos that users uploaded. And CapCut soared to the top of app-store charts late last year. Last year its global downloads jumped 43% to more than 400 million and around 7% came from the U.S.
Its parent company, ByteDance, started as a buzzy news aggregator in 2012, has rapidly grown into an app empire using its powerful algorithms. It was wise enough to run TikTok abroad and keep its Chinese version, Douyin at home. Today TikTok is competing with Meta and Google for advertising dollars.
Now CapCut is not a revenue earner but after it rolls out an enterprise version target for corporate users it will charge those users. It has already offered its users the cloud storage service as well as more features and effects. And soon a paid version called Jiangying that can allow multiple users to co-edit a video.
CapCut was first launched in the U.S. in May 2021 and its introduction of an effect known as “3D Zoom” which can close in on the subject of a photo and put the background in a way that it appears to be a three-dimensional picture. It also launched several festival templates around Halloween and Christmas.
We can watch out for Grace Windheim, a 24-year old San Francisco-based content creator, who has posted several videos on YouTube to teach people how to make trendy video with CapCut. Using popular templates to create effects can help people to earn followers and views.
CapCut also provides templates for posts and advertisements on Instagram, Facebook, YouTube and LinkedIn.
According to data.ai which is the app analytics company, CapCut’s revenue comes from subscriptions and advertisements and with its AI-driven features which can allow users to generate videos in seconds.
Its competitors are VivaVideo from Hangzhou Xiaoying Innovation Technology Inc., the U.S. rivals like Vimeo Inc.’s Magisto and Ubiquiti Inc.’s VN Video Editor.
We have noticed that India banned TikTok, Shein, Tencent Holdings’ WeChat since 2020. Lately it banned CapCut and VivaVideo. New Delhi has blocked 200 Chinese apps since their relation turned sour.
Last and not the least, we bring out Lemon8 to your attention. It belongs to TikTok, its parent company and Lemon8 was first introduced in Japan in April 2020. It has reached five million monthly active users. The same year it was launched in Thailand where it has 7.4 million downloads. It posted under different categories like fashion, beauty, food and wellness.
Lemon8 has become the conversational piece and has also become the No. 1 most downloaded free lifestyle app in the Apple Store. This app was launched in the U.S. and U.K. in February and you can find it in Japan, Vietnam, Malaysia, Thailand and Singapore.
It is ByteDance’s attempt to compete with another Chinese app known as Xiaohongshu, also known as Little Red Book in countries like the U.S., Canada and Australia. Little Red Book is known for its lifestyle recommendation and shopping app.
Like all social media from China, they engage influencers to post on the app and they must follow the post guidelines. And already the #lemon8 hashtag has over 2.4 billion views in TikTok. There are already dozens of videos from creators describing the app as a cross between TikTok and Pinterest.
The app has also 4.25 million active users in the U.S. In the midst of TikTok’s recent clash with Congress, the hype of this app is to pull wools over the eyes of the Biden administration. TikTok was told either to sell to the U.S. investors or face a possible ban and you can almost feel the response the Chinese government would put forward.
One has not to forget that in the U.S. there is the support for a bipartisan bill in the Senate, called the RESTRICT Act, that gives the Commerce Department power to review and potentially restrict foreign threats to technology platforms.
The Threats
Children are the victims of these highly addictive apps as they are found to have spent long hours viewing some dangerous contents across a variety of platforms that are not suitable for the juveniles. Many of them suffered from depression, anxiety, suicidal tendency, self-mutilation and eating disorder. They also complained for being bullied and harassed.
Since Facebook was launched in 2004, the research exploring the link between social media and mental health is compelling. It is found that suicide among those aged between 10 and 19 years old in the U.S. surged by 45.5% between 2010 and 2020 according to the Centers for Disease Control and Prevention.
Many parents and legislators blame the social media companies who, they say are developing highly addictive products that expose young people to harmful materials. The social media companies argued that their technology is boosting users to build relationships and promote their mental health.
The looming litigation for the product liability in the U.S. against those major social media platforms, such as Facebook, Instagram, TikTok, Snapchat and YouTube. They were found to have borrowed the techniques used by the tobacco and gambling industries to get children addicted to their products. You can imagine the reason of the Biden administration pushes the Congress to pass the laws preventing the industry to collect the children’s data. It is more strict to TikTok as it posts the threat for the national security.
These social media companies found the increased regulation could have threaten their advertisement-driven business model. Then there is also the lack of evidence that they are the cause of those distresses created on the children as the scientific data is just not available for study.
If they can be used with the limited time and teenagers can benefit from its use in moderation. A daily screen limit of 60-minutes can be set automatically for juniors. But to set the age limit, say to start at the minimum age of 13 is recommendable. The use of algorithm should be restricted and its content should be censored, for example with those indicating suicidal, self-harm and eating disorderly.
For meeting those minimum age requirement, we found that Facebook, Instagram and TikTok have done something there.
The social media companies intend to rely on a 1996 law, a/k/a Section 230, which provides broad immunity from claims over harmful contents posted by users.
This will take the social media companies to set the age for allowing the youngers to enter the platform and the parental consent is necessary. Already Utah passed the law for age verification for all users and parental consent to use social media for age under 18 starting 2024. Legislators in Minnesota have also proposed the bill under the same requirement. The use of algorithm to curate content is going to be restricted. This will open another can of worms as this time we are involving artificial intelligence, and eventually this will call for legislation as well.
The Verdict
This piece of article brought out the fact that the top five most popular apps in the United States, four of those are developed by the tech companies from companies from China. It is not by coincidence but due to the fact of China’s massive market where everything that have been developed or built there are having the leading role.
From what we have found in this tech world, it seems that China has cornered the social media. Because of its extensiveness in its popularity that has drawn the attention of the Western world. Since it is also craved by youngsters and due to the fact that giant techs are using the data they have harvested from them and with the use of their continuous streaming of ideas, products and services, they all ended up being their preys. This cover a wide spectrum of categories like fashion, beauty, music and dance, food and wellness. This is the way they earn their revenues.
In fact it should not only be the Chinese apps, but also the others that they ought to get the same scrutiny and receive the accountability from the AI they have engaged.
If we really want to fix the problem, we should set up all the rules and regulations and to incorporate the Board of Examiners for the contents of those online videos even if they can be short as few seconds to several minutes.
Many of the measures, for example how many minutes the users can spent on the apps as well as the youngest age that can be allowed which we have already mentioned earlier on.
Since the possession of mobile phone is becoming part of our life’s essential, we can have difficulties to stop our children to stop their scrolling on their handheld. There is still a lot to be done in the areas of privacy and security and if we would want to maintain a healthy cyberspace we better put our acts together.