In October 2023, Premier Li Qiang signed off on a new set of measures designed to create a safer online environment for China’s youth. The regulations, China’s most comprehensive child internet safety laws yet, will task educators and technology companies with tackling data privacy, cyberbullying, and, of course, the dreaded wangyin (internet addiction). Part of this will be through the implementation of built-in minor protection features in apps, websites and programs that help educate youngsters and restrict their usage. The new rules come into effect on 1 January 2024.

One can readily sympathise with China’s fears about the shifting internet landscape. Since 2019, when gaming addiction was still the government’s prime target, short videos on platforms like Douyin (the Chinese TikTok) and Kuaishou have become ubiquitous and, for many, are becoming the go-to form of entertainment. Around the world, parents, individuals and governments are rightfully concerned about the addictive nature of social media, as well as its potential for facilitating the exploitation of vulnerable people.

Below the surface of China’s ambitious plan, however, lurk different but interlocking fears about the suzhi, or “quality”, of the next generation. State media has likened gaming to opium, a drug whose voracious use in Qing-era China is tightly associated with the “century of humiliation” that began with the First Opium War. The argument goes that internet addiction, if let loose upon the population, could create an unmotivated and ineffective workforce that cannot contribute to the country’s development, from the perspective of the political leadership.

This framing could risk overlooking a much bigger threat: a long-term youth mental health crisis created by a hyper-competitive education system and compounded by economic woes. It is highly contested whether excessive gaming or internet usage constitute addictions comparable to drug or alcohol addiction. In fact, some theorise that the internet is less a cause and more a symptom of Chinese young people’s problems, serving as “a sanctuary where troubled youth seek solace and emotional escape”, as anthropologist Jie Yang puts it. Even if the internet is the core contributing factor to young people’s poor mental health, can the new restrictions really prevent excessive and detrimental gaming and internet usage?

This winter marks four years since the first gaming restrictions were put in place and another two since they were further tightened. Last year, a state-associated gaming regulator declared that the policy had effectively solved the problem of gaming addiction. Putting self-reported data to one side, the jury is still out on whether these kinds of measures really work. One study led by researchers from the University of York and published by the journal Nature in August found “no credible evidence” for the reduction of “excessive playtime”, which is classed as spending more than four hours per day, six days per week playing video games, as a result of China’s gaming curfew.

The authors of this paper theorise that the “highly federated” nature of the games industry could have led to ineffective policy. Individual game providers are responsible for recording the real age of players and restricting their gameplay accordingly. Enforcement is then inconsistent across providers. “Top-down regulation may be able to secure compliance from large corporations who have the resources to effectively identify and police their player bases and have become prime targets of political intervention in China. It is less clear how compliance is easy to affect and police for thousands of small companies,” the research paper states.

The same issue is likely to come up when these measures are applied to all apps and platforms, but on a much bigger scale. Meanwhile major stakeholders in charge of China’s super-apps, like Tencent, Sina and ByteDance, are likely to comply as best they can to avoid retaliations. But loopholes will become rife in the hands of smaller app developers.

As has been the case with the gaming restrictions so far, under-18s will inevitably find workarounds. Logging into an adult’s social media account or lying about their age when they sign up are easy ways minors can evade controls on what content they can see and how long they can browse for. But, if the self-reported data from China’s gaming industry holds any water, these kinds of measures may be enough to nudge habits in a slightly healthier direction. The ongoing mental health crisis, however, will eventually need to be tackled head-on.

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Anyone doing business with China in recent years has been aware of the importance of WeChat, a social media one-stop-shop allowing chats, promotions, shopping and payments all on a single platform. And its importance can’t be understated for most businesses in China. However, its popularity and prevalence has led some companies to forget everything else and replace a broad marketing plan with a simple WeChat plan.

According to Arnold Ma of Qumin, WeChat should be regarded as more of an operating platform than a social media channel. And when it comes to social, there’s a new kid on the block. That kid is Douyin – a short video app that was initially popularised by people lip-synching along to famous songs. Users then started showing off other talents, performing comedy sketches and entertaining more generally; Douyin was soon mostly made up of user generated entertainment content.

Over a billion videos are viewed every day by the 350 million Daily Active Users on Douyin in China – not bad for a company that was developed by a team of 8 people over 200 days. Today more than half of its users are under 25 years old, making it predominantly Millennials and Gen Z users who are active on the site.

Many of the early Western social media platforms were desktop-based sites that have since been adapted to mobile. But China – without a long history of desktop internet – leapt straight to mobile. As a result, it’s been able to develop apps that are more suited to mobile, bypassing the desktop legacy that so many western sites have been stuck with. Douyin’s format of videos being presented in full portrait mode (as opposed to the horizontal mode that is more suitable for desktop viewing) has really captured a youth audience who are used to swiping, scrolling and short form content.

Today, only 15 percent of teens now post to their WeChat moments feed says Ma. “When social media platforms go mainstream, they lose the youth,” he explains. “We can see how Facebook lost young people when they went from niche to mainstream and we now are seeing the same with WeChat.”

Douyin’s video only platform has come at the right time. This is particularly true in China, where Chinese people spend a combined 600 million hours a day watching short videos on their phone. Ma argues that Douyin is leading the way in third generation social media. First generation – the MySpaces of this world – made users dive into and out of other users’ pages or blogs. The second generation of social media platforms such as Facebook aggregate a feed that allows people to see all of their network’s content by scrolling down one page. But the third generation Douyin-style platform is content rather than network led. Artificial Intelligence algorithms present the user with content that will be most suited to them, regardless of whether they “follow” the content producer or not.

Users can then like and comment on the content. More likes and views cause the algorithms to present the content to those users who favour those categories and positions it in front of more users.

Therefore, even content from accounts with a relatively small number of followers can get seen by huge numbers of people if the content they produce is suitably interesting and has “thumb-stopping” power.

For businesses this presents an interesting opportunity. Unlike sites like WeChat or Instagram where users must already be following a business account to view their content, with Douyin, the content might be presented to them whether they follow the account or not. This enables the size of the reach of the business to be much wider. Furthermore, the more content produced and the more it is viewed, the higher up the rankings that user becomes. Therefore, Douyin starts doing the promotion on behalf of that business.

And of course, in-app shopping is available, allowing people to buy clothing worn or items featured in the content. “I was watching a video the other day of this man picking fresh chillies in rural China, chopping up meat, preparing freshly ground spices and herbs then cooking everything on a huge wok over a wood burning stove,” explains Ma. “My mouth was watering as I watched this. I said to myself, I wish I could eat this now. And then in the bottom corner a button popped up to enable the user to buy that exact chilli and beef sauce. In China, you could order that at lunch time and have it with rice in the evening! This is not an ad, it’s the perfect and seamless integration of content and commerce that the likes of Facebook have struggled to crack for years.” he says.

This is not an ad, it’s the perfect and seamless integration of content and commerce that the likes of Facebook have struggled to crack for years.

Adverts, according to Ma, are getting smarter. Companies don’t need to have followers and reach users specifically targeted by the platform’s AI. A combination of organic branded content and paid for ads (to boost reach) offer two different (and low cost) approaches, and real time insights can be garnered on products from users’ comments and reactions.

Douyin has a sister site in the West called TikTok (which is also owned by the Chinese company Bytedance) but Ma is quick to point out they are not the same. “Douyin is less silly than TikTok,” he explains. “It’s more useful and more creative and is hungry for quality content.” He argues that it will bring back the rise of the creative rather than the commentator. “Sites like Instagram brought about the rise of the social influencer who were mostly nothing more than commentators. Foodies who took pictures of their meals or fashionistas taking pictures of a handbag,” he says. “With Douyin we will see the rise of the social creator – actual chefs preparing the meal or designers making fashion items.”

For British brands looking to keep their finger on the pulse of the zeitgeist, a presence on Douyin might well be an incredibly cost-effective way to tap into China’s youth market.

The post What is Douyin? And how is it dethroning WeChat appeared first on Focus - China Britain Business Council.

First introduced in 2017 by 500 start-ups, this year the report is published by Abacus, the Morning Post’s digital news arm, who have identified four overarching themes across the industries investigated.

Chinese internet giants are doing everything

Internet behemoths Baidu, Alibaba and Tencent (BAT) are present in all burgeoning tech, with the three companies investing, building and acquiring business across all the 12 industries analysed by the report.

Chinese internet empowers rural communities

Internet access in rural China is rocketing. In 2017 there were 209 million rural users, with a penetration rate of 35 percent, whilst 10 years previously, in 2007, there was just 7 percent penetration. This has meant that 55 million rural students are now taught through live-streaming classes, whilst just under 500,000 online shops are run by rural households.

55 million rural students are now taught through live-streaming classes

Chinese internet companies embrace ‘Social+’

E-commerce often integrates social at the core of their business model, but other online industries, such as news and language learning, will also use it as a means to drive user engagement and growth.

Government is the visible hand

Government plays a key role within the ecosystem, with the report arguing that business, particularly in areas of finance, can live or die depending on the degree of government support they receive.

Other key takeaways from the report include a massive shift to cashless; US$ 15 trillion of transactions were made using mobile payments in 2017. China also holds a leading place in online gaming; in the same period, there was US$ 30.8 billion in gaming revenue, a quarter of total global income from the sector.

“We are all about unboxing China tech for the rest of the world, and this report fits that mission,” said Ravi Hiranand, executive producer of Abacus. “China’s internet population is huge and its tech sector is vast, but this report helps to break it down by giving you a curated look at key trends and companies that you need to know.

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‘Influencers’ are people who have wide followings on social media platforms like Instagram or YouTube. They are people who can make serious money from posting branded content to their legions of followers. The majority are pop stars, reality TV personalities or supermodels, and brands pay thousands of dollars for them to showcase their products. The more followers they have, the more they can charge the brand.

Taylor Swift, Kim Kardashian or Beyoncé are household names who have dominated screens on and off social media for many years now. But how many people have heard of Li Tianyou? What about Yu Li or Wei Liuyuan? These are China’s wanghong, the country’s own internet celebrities.

China’s wanghong don’t having armies of stylists, personal assistants and photographers who ensure their images are carefully curated; these internet personalities livestream from their own bedrooms.

Wei Liuyuan, who goes by the name Qing Wu on social app Momo, has managed to attract over a million followers by performing exotic pole dancing. However, the rising stars today are young men from China’s rural north east whose social commentary attracts audiences of tens of millions.

China’s live-stream market was worth at least $3 billion in 2016, up 180 percent on the previous year

Li Tianyou has more than 22 million fans that tune into his live streaming platform, on app YY. Described by the New York Times as “a hero to a generation of disaffected young people in China’s smaller cities and rural areas. Many of them are spiteful toward elites, sceptical of authority and eager for an escape from menial work,” they attribute his success to “his crude jokes and rat-a-tat riffs on modern life”.

Li, who is the son of a cattle farmer uses a style known as hanmai, or “microphone shouting.” It’s a rap-like performance that is popular amongst more rural communities, and is a modern take on the traditional Chinese performance of crosstalk. His work, he told the Times, “speaks to Chinese people who come from common families, or even from poor families.”

Yu Li, who goes by the name Brother Li, also spends hours a day broadcasting hanmai on a social network YY. He earns more than $100,000 a month.

Whilst brands pay western celebrities to endorse their products – be that staying at their hotels, driving their cars or wearing their clothes, in China it is the individual fans rather than brands who are paying to watch their idols.

Fans offer virtual gifts – for example teddy bears or perfume – that represent real money but often cost less than a dollar. Think of it as a virtual tip. Or perhaps slipping a note into the thong of a stripper.  Those wanting to show off their wealthy status might offer more money to ensure their name flashes on to the screen. Pay enough and the star might give you a “shout out” mentioning your name to all his fans. You can pay to be a VIP in his chat room.  Whilst dancer Wei made 2.5 million yuan from these online gifts, Li Tianyou earns more than $2m a year.

China’s live-stream market was worth at least $3 billion in 2016, up 180 percent on the previous year, according to iResearch. The sector will soon generate more money than the Chinese movie box office, analysts predict.

This has not gone unnoticed by authorities. According to official data, over 344 million people use one of China’s 150 live-streaming apps. In late 2016 a formal set of regulations were implemented, imposing stricter controls on these apps, forbidding sexual content and news reporting during live-streams.

Three live streaming sites were forced to shut earlier this year because they didn’t have the correct licenses and the government how has the ability to reprimand streamers who would “harm national security, damage social stability, disturb societal order, violate the rights of others or broadcast obscene or erotic activities.”

China has been leading the way in micro-payments for some time and as people continue to look for more authentic content rather than bland, corporate branded messages, western social media stars may also start to look to this as a means of income.

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