Diversity in the edtech portfolio and interests

Such a diverse edtech portfolio keeps things interesting. In August 2018, Bytedance invested $49.5 million in San Francisco-based edtech company Minerva. It also acquired the online learning platform Qingbei Wangxiao to help develop its in-house K-12 platform, Dali Ketang. Like Musica.ly’s integration with TikTok, it folded Qingbei into Dali Ketang.

Dali Ketang looks to be a close cousin of Indian live-tutoring and online learning apps like Vedantu and Unacademy, who are similarly staffed with tutors and content creators from top universities.

Bytedance’s strategy of acquiring successful smaller companies and layering them with its own tech and talent is another crucial element of its playbook. That and massive marketing spends.

According to Sheng, Bytedance spent $56 million for Gogokid’s marketing through online, outdoor marketing and celebrity endorsements in China. Closer home, TikTok reportedly has a monthly spend of $20-25 million on marketing, most of which, ironically, is for ads on Facebook.

Ken could not independently confirm this number as Bytedance India did not respond to a detailed set of questions sent on 18 September.

“Edtech is all about quality content and services. Bytedance has the resources and team to build on both,” claims the Chinese investor mentioned above. When it comes to edtech, he adds, Bytedance is willing to invest in quality and not just quantity, even though its early products are facing regulatory headwinds in China.

Good Good Study

Hao Hao Xueixi’s courses can be purchased in-app, for as little as 99 RMB ($14) and one that features prominently is a course by a Havard graduate that focuses on time management. The app’s name literally translates in English to “Good Good Study”. Money management is a popular course
According to information sourced by The Ken, Bytedance currently has 12,000 engineers on its rolls, and 30% of their workforce is now foreign—many poached from Facebook and Google.

Chandler’s entry into the company as head of their international expansion comes at a time when Bytedance wants to go beyond China, and be protected from further regulatory hassles in the countries it goes to. At the backend, says a China-based expert, will be a cutting-edge AI engine that will fuel the growth.

While Sheng doesn’t believe Bytedance’s AI is particularly superior, he does admit that the template which worked superbly for news-aggregator app TouTiao and TikTok, could work well for its edtech apps as well.

“TikTok spends heavily on marketing and influencer networks. It pays creators Rs 200 per video, reaching out to 2000 influencers at one go. But how sustainable will its growth be, once marketing costs are reduced?”

HIMANSHU GUPTA, EX-WECHAT

In fact, newer apps like Tangyuan and Haohao Xuaxi are borrowing heavily from TikTok. Tangyuan teaches English phrases through funny, situational skits, not very different from the current English learning videos on Edutok in India. Haohao Xuaxi, still in beta, is a collection of motivational and practical upskilling courses for adults in the workplace.

“Bytedance has not made any significant revenues from these edtech products yet,” says the Delhi-based investor mentioned above. The likelihood of earning from any Indian edtech apps it launches is also currently low. For instance, in-app purchases on Indian TikTok only accounted for 0.5% of its global sales, which stood at $5.5 million. Bytedance reportedly earned $7.2 billion in revenues in 2018 and made a loss of $1.2 billion. In the first half of 2019 alone, however, it has already surpassed last year’s revenue, according to a report from Reuters.

Editor’s formal launch will go beyond merely rebranding TikTok as a serious, responsible social media player in India and a bonafide edtech player. Even with profitability a distant dream, these nascent efforts will root Bytedance, via TikTok, and establish it as a mainstay in the Indian consumer tech ecosystem, edtech or otherwise.