Bytedance's TikTok playbook is winning China's consumer AI market

By Catherine Thorbecke

 

ByteDance Ltd. is best known abroad as the embattled parent of TikTok. At home, though, it has quietly seized the crown for China’s top consumer artificial intelligence app while bucking all the trends — a feat that offers lessons in the global tech race.

 

While generative AI is still attempting to prove its value and productivity benefits to enterprises, people worldwide have already embraced it for everything from information gathering to entertainment. Cracking the consumer market is also proving to offer one of the clearest paths to profitability in a cash-hungry sector: By some estimates, 70% of OpenAI’s revenue comes from individuals paying for ChatGPT subscriptions.

 

 

ByteDance’s Doubao app — an all-in-one chatbot, photo and video tool — is now China’s most popular mobile AI platform. In October, more than five times as many consumers downloaded Doubao (11.4 million) compared to DeepSeek (2.2 million), according to Bloomberg Intelligence. Doubao has led the charts every month since overtaking its rival in April.  

 

But more importantly, it’s holding on to its audience. According to separate data from Quest Mobile, Doubao had 172 million monthly active users as of September — a key metric that allows investors to assess not just scale but engagement. DeepSeek’s app had 145 million, followed by Tencent Holdings Ltd.’s Yuanbao, which lagged behind with just short of 33 million. Globally, Doubao was ranked fourth on Andreessen Horowitz’s list of the top 50 Gen AI mobile apps.

 

That stickiness is no small feat in China’s crowded and hyper-competitive AI arena. What sets it apart is its focus not just on text, but on frictionless AI-powered voice, image and video experiences. ByteDance’s underlying Seed 1.6 vision model, which powers the app, now tops OpenCompass’ Multi-Modal Leaderboard — which evaluates an AI’s ability to interpret multiple types of inputs. (OpenAI’s GPT-5 leads the large language-model ranking.) Consumers are signaling that they don’t just want to chat; they want to interpret, generate and edit visuals as well.

 

Equally as crucial is ByteDance’s core specialty: Consumer-friendly design, making the technology easy to use even for grandparents. From TikTok to Douyin, the company has repeatedly proven that it knows how to build apps that keep people coming back. DeepSeek and other Chinese AI startups have excelled on the modeling side but still struggle with user experience. Doubao also makes it simple to share content from the app to other platforms, a key engagement play from the social networking era.

 

For everyday AI users who just want to look up recipes or edit photos, these touches matter just as much as — if not more — than underlying model benchmarks. DeepSeek might excel at more complex reasoning and research tasks, but Doubao has figured out how a friendly platform named after a steamed bean bun can hook a mass audience.

 

Taking a step back, what’s especially interesting about ByteDance’s AI success is how it breaks with China’s open-source zeitgeist. I’ve written a lot over the past year about the promises and perils of this approach. But ByteDance is more closely following OpenAI’s playbook: It offers some open-source models, but it keeps its most advanced technology proprietary. In the long run, if ByteDance’s underlying AI models can prove significantly better than the free-to-download alternatives, it could give the company a durable commercial edge.

 

All of this isn’t going unnoticed by investors. The private company was most recently valued at $480 billion, Bloomberg News reported, after a Chinese investment firm bought a block of shares. This would put it not far behind OpenAI, the world’s most valuable startup with a $500 billion valuation.

 

Still, Doubao’s dominance is far from secure. Tech powerhouse Alibaba Group Holding Ltd. recently commenced its biggest push yet into the consumer market with the relaunch of its Qwen app, drawing in 10 million downloads in its first week.

 

Beyond capturing consumers’ attention, the next challenge will be to figure out monetization. Subscription models have flourished in the West, but proven a tough sell in China’s crowded market that is still dominated by free-to-use services. Over the past 12 months, Chinese AI apps combined have generated roughly $500,000 in sales on Apple’s mobile iOS operating system — compared to $1.7 billion from just OpenAI’s ChatGPT, according to Bloomberg Intelligence. And given the outsize scrutiny on TikTok from Washington, it’s hard to imagine Doubao will have a smooth welcome to more profitable overseas markets.

 

Even so, its breakout success sends a clear message. In the global battle for AI consumers, the winning app won’t necessarily be the “smartest,” but the stickiest. Intelligence may be overrated, but addiction isn’t. 

 

(Disclaimer: This is a Bloomberg Opinion piece, and these are the personal opinions of the writer. They do not reflect the views of www.business-standard.com or the Business Standard newspaper)