The Rise of a New BAT: ByteDance Takes a Chunk Out of Baidu's Lunch

June 1, 2020

In 1Q20, ByteDance's TikTok saw its most successful quarter ever since inception with global downloads of 315 million, bringing the lifetime total of downloads of the app past 2 billion.

ByteDance Rapidly Taking More of China's Total Digital Ad Spend, Its First Victim? Baidu.

Digital advertisement has been a key marketing channel for Chinese companies, accounting for approximately 70% of all media ad spending. In 2019, Chinese companies spent around US$80bn on digital advertising, and this value is expected to reach US134.3bn by 2023. 

The Chinese tech giants, Baidu, Alibaba, Tencent (commonly referred to as "BAT") account for a large portion of this ad spending. However, over the span of two years, ByteDance share of the total ad spending has reached 22% in 2019 from 5% in 2017, as seen in the chart below. The main victim was Baidu, losing 9% of its market share over the same period. We believe this is likely become more pronounced over time as we see ByteDance aggressive expansion into other verticals like the search engine market (Baidu's core competency).

Sources: R3, Totem Media, Technode, Zero One

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