As TikTok faces mounting pressure from US lawmakers concerned over national security issues and alleged censorship, its parent company, Bytedance, is encountering a different sort of challenge.
Tencent, China's largest gaming and social media company, is set to invest $2 billion into Kuaishou, a rival short-video platform that competes with ByteDance-owned Douyin (the Chinese version of TikTok) in China, according to a report by The Information.
Tencent and Kuaishou did not immediately respond to requests for comment. ByteDance declined to comment.
Tencent is betting that Kuaishou can outcompete Douyin, which is increasingly challenging Tencent's social media platforms in terms of user attention and time spent on the platforms. Tencent's own short-video products, such as Hotpot Video, are still struggling to stand apart.
The upstart ByteDance is also challenging Tencent's bottom line.
ByteDance was the second-largest earner of digital advertising revenues in the first half of 2019, overtaking search engine giant Baidu as well as Tencent. Only e-commerce giant Alibaba Group Holding earned more, according to a report by consultancy R3 last month.
Alibaba is the parent company of the South China Morning Post.
Kuaishou and Douyin share similar functionalities as platforms for short video sharing and live streaming.
Kuaishou is more popular among male users and is stronger among China's rural communities and migrant workers. Douyin targets college students and office workers with content that appeals more to females.
Kuaishou reported more than 200 million daily active users as of June, doubling the number from a year ago. Its live-streaming platform has more than 100 million daily active users, according to company figures released on Tuesday.
As for Douyin, a company statement from July said it has more than 320 million daily active users.
Kuaishou is hoping its overseas version, Kwai, can replicate the success of TikTok. The app has been topping the charts in Brazil, showing its potential to be the next viral video app in the South American market.
TikTok is the first Chinese social media app to achieve success in major foreign markets.
Kuaishou recorded a robust financial performance in the first three quarters, posting nearly $284 million in net profit on revenues of almost $3.9 billion, the report said.
Seven-year-old Bytedance was reportedly valued at $78 billion last year.
Additional reporting by Tracy Qu
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