Internet moguls are being held hostage by the entertainment system!

Chapter 439 Douyin's Year-End Summary: TikTok Completes $30 Million Funding Round!

18 was a year of celebration for the internet industry.

According to reliable statistics, a total of 64 companies in China's internet industry completed IPOs this year, a record high.

However, the fervor surrounding IPOs cannot conceal the fact that internet companies lack profitability.

Many giant companies in vertical industries saw their stock prices fall below their IPO price in the month following their listing.

This performance serves as a way to cool down the overheated market and also serves as a reminder to internet companies that are planning to go public.

Of course, TikTok is not in this category...

Inside the CEO's office at Douyin.

As a rapidly growing company, Douyin didn't have time to reminisce about the past year of 18 before hurriedly preparing for its annual meeting summary and work plan for the new year on the third day of the new year.

Su Xiao is in charge of the reporting, and the report to the board of directors is scheduled for tomorrow.

Today's meeting in the office was a small one, mainly consisting of her, Chen Xiu, and Zhang Yiming.

"Last year, Douyin's total advertising revenue reached 600 billion yuan, accounting for 70% of the entire short video content advertising market..."

While Su Xiao paused to turn the page, Chen Xiu and Zhang Yiming quickly exchanged glances.

Although the degree of excitement differed, the content of their eyes was roughly the same: they were both excited and expectant.

After a rustling sound, Su Xiao, having turned to the next page of the document, continued:

"The revenue from live streaming is 200 billion yuan, and Douyin's e-commerce GMV is 500 billion yuan for the whole year. Although there was no event on Double Eleven, the transaction volume completed through Douyin links still reached 10 billion yuan."

"In 18, the annual revenue was 800 billion, and the total expenditure, including server traffic fees, operating costs, marketing, R&D investment and creator incentives, was 652 billion, with a profit of 148 billion."

"Regarding the development in 19, the current main direction is AI research and development and the construction of upstream and downstream industrial chains, while also taking into account the development of the e-commerce sector. One of the recent key tasks is the cooperation with WeChat during the Spring Festival."

At this point, Su Xiao lifted her eyelashes, her clear and sharp gaze sweeping back and forth between Chen Xiu and Zhang Yiming.

Do you have any opinions or suggestions regarding the cooperation?

Chen Xiu was taken aback, turned to look at Zhang Yiming, and gestured for him to go first.

Socially awkward Lao Zhang pushed up his glasses, his gaze wandering for a moment, which led him to a few good ideas.

"According to the current user profile of Douyin, the male-to-female ratio is basically the same, but the majority are young people, and the growth of new users slowed down significantly in the fourth quarter of last year."

"However, the daily usage time of users has shown an upward trend, which indicates that there is no problem with the APP itself. The main issue is that there are only so many young users, and those who want to use Douyin have already done so."

"I think the only area where Douyin can still maintain growth right now is the lower-tier market. Our cooperation with WeChat can use the 'scan to receive red envelopes' model to capture the lower-tier market."

This approach sounds like Pinduoduo's customer acquisition model...

However, throwing money around does have a direct effect.

These two thoughts popped into Chen Xiu's mind, and she added at the right moment, "We can add another condition."

"what?"

"For example, you can draw a red envelope once for staying for 10 seconds, draw another once for browsing 3 short videos, and draw an extra red envelope once for half an hour of use."

"Huh? This tactic of yours sounds a lot like Pinduoduo's 'cut a knife' promotion, doesn't it?"

Zhang Yiming blinked his small eyes and looked at Chen Xiu with a meaningful expression.

Upon hearing this werewolf jump shot, Chen Xiu almost rolled his eyes: "Forget about the tricks, as long as it works!"

"That's true."

Zhang Yiming nodded in agreement, then turned to ask Su Xiao for her opinion.

"President Su, what do you think?"

"That's a great idea..."

"That's~"

"but……"

Seeing Zhang Yiming's astonished expression, Su Xiao subtly curled the corner of her lips and said:
"You two seem to have forgotten a premise: we haven't connected with WeChat yet. The most crucial step in acquiring new users is to get users' WeChat accounts to be registered as Douyin accounts simultaneously."

"that's right!"

Chen Xiu and Zhang Yiming answered in unison.

The former gave Su Xiao an approving look while speaking, while the latter simply admired her.

At the beginning of last year, Tencent launched a blocking tactic against Douyin, directly prohibiting Douyin short videos from being spread in Tencent's software.

Now that the two companies have reached a partnership, the function of simultaneous account registration should also be enabled.

"Besides the account issue, I'd like to add something."

Zhang Yiming raised his hand and looked at Chen Xiu, saying, "President Chen, could you please have the celebrities who have registered accounts on Douyin start posting short videos about 'Douyin's Spring Festival Red Envelope Giveaway' this month?"

Why are you telling me this?

"You're not a professional, are you?"

"Tsk, no matter what, I can't possibly exploit so many celebrities' personal brands, can I? That would require so many favors!"

Chen Xiu glanced at Zhang Yiming, feeling that his suggestion was absurd. But objectively speaking, the idea was indeed not bad.

"It's not difficult to get celebrities to help promote your products by posting short videos; just pay them a promotion fee per person."

You mean paying for advertising?

Zhang Yiming looked hesitant, clearly thinking about the terrifyingly high salaries of celebrities.

Chen Xiu explained, "Advertising fees and endorsement fees refer to the fact that if a brand uses a celebrity's personal IP, it will naturally be expensive. Asking them to release a short video for promotion is just like recording a holiday greeting video, which doesn't cost much."

"How much is that?"

"The internal price, apart from those so-called top stars who have been hyped up, even a first-tier star like Yang Mi only costs a few hundred thousand. If you hire a few dozen people, the promotion fee will only be tens of millions."

"so……"

Zhang Yiming stroked his chin and nodded: "It really doesn't cost much."

Compared to Douyin's earning power, tens of millions is really nothing.

After agreeing on the promotion fees, Chen Xiu offered another suggestion, leveraging the celebrity topic.

"While it's good to have celebrities help, if you want the publicity to have a long-tail effect, it's best to find another topic that generates a lot of buzz, such as a movie released during the Spring Festival."

Upon hearing this, Su Xiao and Zhang Yiming both reacted instantly.

Su Xiao opened her mouth to speak, but after seeing that Zhang Yiming was also eager to speak, she quietly shut up and gave up the right to speak.

Zhang Yiming, unsuspecting, said, "Since you've already put it this way, why don't you just tell me which movie you're rooting for!"

"OK, my company produced a sci-fi film called 'The Wandering Earth.' If we can use it for advertising, the effect will be better than hiring celebrities."

Chen Xiu stared intently at the two of them, thinking: "The promotional effect of 'The Wandering Earth' on a single day may not be much, but it can continuously advertise Douyin for a month, and its cumulative effect may even surpass that of the Spring Festival Gala!"
Zhang Yiming didn't rush to give his opinion, but hesitated and asked, "How much would it cost to use a movie for advertising?"

"Actually, it doesn't cost much. The main online promotion platform for this movie is Douyin. The movie distribution company also needs to buy traffic from Douyin for promotion. So, with this back and forth, the cost is even less."

"You've got a good grasp of the numbers."

"One yard owned by a yard."

Since Chen Xiugang wouldn't ask celebrities to help promote Douyin just because he's a shareholder, he's not going to do so.

At this point, Douyin would naturally not make any move to favor Douyin simply because Datang Pictures is the producer of "The Wandering Earth".

Moreover, there's no need for that; mutual benefit is obviously more comfortable than each other taking advantage of the other.

After discussing the promotion, the remaining task is to determine the total amount of Douyin's Spring Festival red envelopes.

This number also has a reference.

Alipay's total prize pool for collecting five blessings in 16 was 8 million yuan. If Douyin wants to surpass its opponent and achieve better promotional results, it would be about 10 billion yuan to spend.

Just as the three of them finished discussing the matter, Chen Xiu looked up at the clock on the wall and slowly stood up from the sofa.

"That's about it. We have to attend the TikTok Pre-IPO signing ceremony this afternoon. It's almost noon, so let's call it a day!"

After saying that, Chen Xiu reached out to help Su Xiao organize the documents.

Zhang Yiming glanced at the clock; it was 11:55. It was indeed time for lunch.

……

In the afternoon, at 1:00 PM, in the Douyin No. 1 meeting room.

Reporters from major financial newspapers gathered here, and the spotlight was focused on TikTok's new CEO, Zhou Shouzi, as well as representatives of the five strategic investors in this pre-IPO.

Among them, SoftBank Vision Fund, KKR, Yunfeng Capital, and General Atlantic are all international private equity firms.

Tencent is the only strategic investment partner of a large domestic enterprise, and the person representing them at the signing ceremony was none other than Pony Ma.

Chen Xiu, Su Xiao, and Zhang Yiming represented Douyin at the signing ceremony, standing behind Zhou Shouzi to witness the signing.

Zhou Shouzi, who is already accustomed to capital operations, is also very familiar with this financing matter.

After the signing was completed, when the group stood together to be interviewed by reporters, Zhou Shouzi was the one who spoke first.

"Okay, first of all, I would like to thank the investors standing next to me for choosing to believe in TikTok. I would also like to thank Mr. Chen Xiu, the representative of Douyin, for giving me the opportunity to stand here and speak."

Seeing the reporters' gesture to turn to interview them, Chen Xiu smiled and waved her hand, indicating that they should continue to ask Zhou Shouzi.

Seeing that Chen Xiu was unwilling to speak, the financial reporter was not as oblivious as the entertainment reporter.

"Mr. Zhou, now that this round of financing has concluded, is TikTok's official IPO already in the works?"

"Yes! You could say that."

Zhou Shouzi paused and glanced at the reporter who had asked the question, indicating that what he was about to say would be very important.

"In fact, TikTok's prospectus is already prepared, but due to regulations, we need to submit an IPO application to the Hong Kong Stock Exchange 120 days after the pre-IPO is completed."

"However, I think this cycle will allow the market to give TikTok a more accurate price. If there are no surprises, TikTok will officially submit its IPO application in the second quarter of this year."

This answer instantly warmed up the atmosphere in the room.

The camera shutter kept clicking, and the flashes all converged, making Chen Xiu look like she was in the entertainment industry.

(End of this chapter)