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Zhang Yiming

Bytedance founder Zhang to devote future time to “longer-term initiatives” at the company

It is fair to say that Bytedance founder Zhang Yiming is not a particularly talented manager. That may sound silly, because within nine years he has created a digital platform with his Chinese start-up that has kept its customers around the world glued to their screens longer than Facebook, Instagram and the like. But Zhang made this claim himself just a few days ago. And he did so just a few months after his video portal Tiktok took over the world’s top spot in the battle for Internet users’ attention for the first time.

“The truth is: I lack some of the skills that make an ideal manager,” Zhang Yiming had written. The sentence was part of a detailed explanation for why the 38-year-old apparently voluntarily vacated the chief executive post of his billion-dollar company in mid-May. In an open letter to Bytedance employees, he had announced that co-founder Liang Rubo would run the business in the future. During a six-month transition period, Zhang Yiming will oversee the change to give his successor a smooth start. He himself wants to have more time to come up with new ideas, develop long-term strategies or deal with social responsibility, he announced.

As a teenager, Zhang Yiming began studying microelectronics in the coastal city of Tianjin, near Beijing. He later switched to software technology and graduated in 2005. When he founded Bytedance in 2012, he had already gained a lot of experience at various companies. Among others, he joined Microsoft in 2008. A year later, he founded his first company, 99fang.com, which offered services in the real estate sector.

The retreat from the chief executive post of major Chinese tech companies, meanwhile, seems to be setting a precedent in China. Alibaba founder Jack Ma was the first to step down in 2019. Then in March this year, Pinduoduo boss Colin Huang also decided he wanted to be a scientist rather than a manager after building his e-commerce company into one of China’s biggest. So Zhang Yiming is now the next high-profile retreat in an industry that has come under increasing scrutiny from government overseers in recent years, with ever stricter regulation. The Chinese government is not comfortable with the rapidly growing online empires with their dynamism and market power. President Xi Jinping even considers the control of Internet companies indispensable to ensure social stability.

Zhang Yiming’s Tiktok experiences spectacular Boom

The timing of Zhang Yiming’s announcement is astonishing. Tiktok experienced a spectacular boom in 2020 and was proud to announce at the end of the year that its followers are the most loyal of all fans of online social platforms: worldwide and also in Germany. Here, the app ranked first for the first time, with 19.1 hours of average usage per month (worldwide: 21.5), around twice as much as the year before. Other platforms such as Facebook or Whatsapp also increased, but in no way comparable to the explosion of the Chinese portal.

Worldwide, 1.2 billion people now use the Tiktok app. In the US alone, there are around 100 million, although the application came under suspicion there last year of being a risk to national security. The Trump administration at the time even wanted to ban Tiktok in the American market, fearing that US users’ data would fall into the hands of the Chinese government. Chinese internet companies are required by law to provide the government with all of their users’ data if it asks for it. At least the data that is stored on Chinese servers.

Meanwhile, the European consumer association BEUC warned last week of Tiktok’s violations of consumer law and has prompted the EU Commission to conduct a review. The consumer advocates accuse Tiktok of hidden marketing and aggressive advertising techniques aimed at children. The company must therefore respond to the accusations within one month.

The Australian Strategy Policy Institute (ASPI) is also critical of the application, which is not called Tiktok in China, but Douyin. Its study found that Tiktok’s algorithm places content in the interests of the Chinese government and hides unwelcome sequences. For example, when it comes to Xinjiang, users get to see mostly happy dancing Uighurs. Videos that address the massive human rights crimes are much harder to find.

Nevertheless, Tiktok’s triumphant march picked up tremendously last year. Zhang Yiming integrated online sales into the video service in 2020, generating $26 billion in revenue last year from sales of makeup, clothing, and merchandise. Alibaba’s digital marketplace Taobao took six years to reach that volume. The growth is crying out for an IPO of Bytedance, which has been rumored for a while and whose volume could set gigantic standards in the tech industry. In an IPO, the company could be valued at around $200 billion.

So why is Zhang Yiming handing over the reins on the eve of his company’s greatest triumph? “I am more interested in analyzing organizational and market principles, and using these theories to further reduce management work rather than actually managing people,” he wrote. He is not a particularly social person, he said, but one who prefers to read, surf the net, or “daydream about what might be possible.”

It won’t be quite so lonely for Zhang Yiming, however, if his announcement is to be believed. He is looking forward to the new stage and to “continuing the journey of Bytedance together with his comrades-in-arms”. Marcel Grzanna

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