Zhang Yiming, founder of TikTok owner ByteDance, gears up for global stage

Zhang Yiming, founder of ByteDance, says in a letter to employees he will focus on global expansion and fresh initiatives such as education. (Reuters)
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Updated 14 March 2020

Zhang Yiming, founder of TikTok owner ByteDance, gears up for global stage

  • Owner of wildly successful app plans fresh initiatives such as education

HONG KONG: The founder of China’s ByteDance, owner of the wildly successful TikTok app, has for years aspired to make ByteDance the first Chinese firm to rival US internet giants on the global stage. On Thursday Zhang Yiming made a key move to achieve that.

Creating new leadership positions for ByteDance’s China business, Zhang said in a letter to employees he would now focus on global expansion and fresh initiatives such as education.

In a recent, exclusive interview with Reuters, Zhang spoke expansively of his vision of ByteDance as a fully global company in the image of Google and Facebook, even as it faces a national security review by the US government over TikTok’s data practices. Some US government agencies have banned employees from using TikTok over data security concerns.

“There are a lot of misunderstandings out there,” Zhang said from a hotel room in New York, where he spoke to Reuters via video call using ByteDance’s work productivity app Lark. 

“We are more localized in different markets than people think.”

TikTok has taken the social media world by storm, especially in the US, vaulting ByteDance to a valuation that sources have told Reuters is close to $100 billion in the secondary market.

That was not just down to luck, say those who know him.

As early as 2013, when the company was just a year old and barely made any revenue, Zhang started planning its global expansion, according to Joan Wang, an early investor in ByteDance and managing director of SIG China.

Zhang told Wang over numerous meetings and phone calls he believed his AI-based recommendation algorithms used in its Chinese-language news aggregator Jinri Toutiao, could be expanded to different languages and content formats.

“The resources at the time seemed far from enough for achieving his global goals,” Wang said.

Chasing global success

TikTok is in talks with the Committee on Foreign Investment in the US (CFIUS) about measures to allow it to avoid divesting the Musical.ly assets it acquired and were later integrated into TikTok, sources have said. 

The CFIUS review came amid rising US-China tensions and US concerns about how user data would be handled.

ByteDance has also been working to separate TikTok from many of its Chinese businesses, seeking to provide CFIUS with assurances, Reuters has reported.

“I am not directly involved in this situation,” Zhang said, when asked about how talks with CFIUS were going. 

He said overall he was “optimistic” about the company’s interactions with the US government.

Zhang declined to comment on whether CFIUS was satisfied with TikTok’s current handling of data.

Earlier this week, the company announced it had set up a “transparency center” in Los Angeles to show regulators and the public how it manages data and content on the platform.

One major ByteDance investor said some backers had suggested a spin-off of TikTok last year, but the company didn’t consider that option. 

Sources familiar with the company also told said that Zhang retains voting control of the firm, which has raised billions of dollars from prominent investors including SoftBank Group Corp, KKR & Co. Inc. and Sequoia Capital China.

ByteDance declined to comment.

His intensified pursuit of global success comes amid rising censorship risks in China after the government in 2018 shut down one of ByteDance’s top products, a joke app, for “lowbrow and vulgar” content.

Zhang said he spent two-thirds of his time outside China last year and likes to indulge in London’s West End musicals and museums. He plans to spend even more time abroad this year as part of an effort to “understand more context.”

IPO plans unclear

Zhang has consciously borrowed strategies from US internet giants including Alphabet Inc.’s Google — ByteDance’s offices in Beijing are decorated with posters including a cover of former Google CEO Eric Schmidt’s book, “How Google Works.”

He delivers town hall speeches every two months to talk about his bi-monthly goals, a conscious nod to Google’s open work culture. 

He also eschews Chinese convention and tells employees not to call him “boss” or “CEO.”

And Zhang insists the company’s product development is already global. A new Indian social media app called Helo is an example of a product ByteDance has designed from the ground up for a local market. 

“We believe the short-term digital advertising market in India is small, but the growth potential is large,” he said.

Lark, the workplace productivity app, was also optimized for a global roll-out. Zhang discarded an initial plan to start with a focus on China and insisted it be targeted at the US, Europe and Japan from the beginning, a company source said.

But there are some signs that political pressure in the US is altering plans: Lark is shifting its focus from making a big push in the US to markets including Japan and Europe, sources said. A ByteDance spokesman said Japan, Singapore and India are its primary markets.

The Chinese version of Lark, called Feishu, has recently gained much momentum as the coronavirus outbreak has created a surge in demand for work-from-home tools.

ByteDance in 2018 began early-stage preparations for an overseas float to offset political uncertainties at home. 

Late last year the company held discussions with Chinese securities regulators about a possible domestic listing, sources said, although it still prefers New York or Hong Kong.

“Currently the IPO is not pressing and we don’t have any imminent plans,” Zhang said. 

“But internally we are making preparations as if we’re working on an IPO.”


OPEC, allied nations extend nearly 10M barrel cut by a month

Updated 06 June 2020

OPEC, allied nations extend nearly 10M barrel cut by a month

  • The meeting, originally scheduled for next week, was brought forward to Saturday

VIENNA: OPEC and allied nations agreed on Saturday to extend a production cut of nearly 10 million barrels of oil a day through the end of July, hoping to boost energy prices hard-hit by the coronavirus pandemic.
Ministers of the group and outside nations like Russia met via video conference to adopt the measure, aimed at cutting out the excess production depressing prices as global aviation remains largely grounded due to the pandemic. It represents some 10% of the world's overall supply.
However, danger still lurks for the market. Algerian Oil Minister Mohamed Arkab, the current OPEC president, warned attendees that the global oil inventory would soar to 1.5 billion barrels by the mid-point of this year.
“Despite the progress to date, we cannot afford to rest on our laurels,” Arkab said. “The challenges we face remain daunting.”
That was a message echoed by Saudi Arabia's Oil Minister Abdul Aziz bin Salman, who acknowledged “we all have made sacrifices to make it where we are today.” He said he remained shocked by the day in April when US oil futures plunged below zero.


“There are encouraging signs we are over the worst,” he said.
Russian Energy Minister Alexander Novak similarly called April “the worst month in history” for the global oil market.
The decision came in a unanimous vote, Energy Minister Suhail al-Mazrouei of the United Arab Emirates wrote on Twitter. He called it “a courageous decision and a collective effort deserving praise from all participating producing countries.”
OPEC has 13 member states, including Saudi Arabia. The additional countries part of the plus-accord have been led by Russia, with Mexico under President Andrés Manuel López Obrador playing a considerable role at the last minute in the initial agreement.
Crude oil prices have been gaining in recent days, in part on hopes OPEC would continue the cut. International benchmark Brent crude traded Saturday at over $42 a barrel. Brent had crashed below $20 a barrel in April.
The oil market was already oversupplied when Russia and OPEC failed to agree on output cuts in early March. Analysts say Russia refused to back even a moderate cut because it would have only served to help US energy companies that were pumping at full capacity. Stalling would hurt American shale-oil producers and protect market share.
Prices collapsed as the coronavirus and the COVID-19 illness it causes largely halted global travel. That also hurt US shale production, drawing the ire of President Donald Trump. But Trump welcomed the earlier deal, as US Energy Secretary Dan Brouillette did on Saturday with the extension.
“I applaud OPEC-plus for reaching an important agreement today which comes at a pivotal time as oil demand continues to recover and economies reopen around the world,” Brouillette wrote on Twitter.
Under a deal reached in April, OPEC and allied countries were to cut nearly 10 million barrels per day until July, then 8 million barrels per day through the end of the year, and 6 million a day for 16 months beginning in 2021.
However, some countries produced beyond their quotas set by the deal. One of them was Iraq, which remains decimated after the yearslong war against the Islamic State group.
On Saturday, Iraq Oil Ministry spokesman Assem Jihad said in statement that Baghdad had “renewed its full commitment” to the OPEC+ deal.
“Despite the economic and financial circumstances that Iraq is facing, the country remains committed to the agreement," Jihad said.
Analysts had expected OPEC and the other nations to extend the cuts of 10 million barrels per day by one more month, but not longer, since the level of demand is still fluctuating.
“If the demand is great, countries like Russia will want to produce more oil, so they probably won’t want to get locked into a longer-term deal that may not help them,” said Jacques Rousseau, managing director at Clearview Energy Partners.