ByteDance, parent company of viral video-sharing app TikTok, is planning to make Singapore its springboard to the rest of Asia as part of its global expansion, according to private sources.
The sources also revealed that the Beijing-based company has plans to spend billions of dollars and add hundreds of jobs here over the next three years.
The Chinese technology startup is currently the most valuable startup in the world at US$140 billion, and is also behind popular platforms Toutiao and TikTok’s Chinese version Douyin.
The move comes at a time when tensions have risen to an all-time high as Bytedance is forced to sell TikTok operations in the US under pressure from the Trump administration. They are currently in talks with cloud infrastructure platform Oracle for the deal.
The UK government is also under pressure from the US to end Bytedance’s presence in the UK.
Previously, India has banned over 50 Chinese apps including popular messaging app WeChat and TikTok, on the grounds of national security and privacy issues.
Following the setbacks in the US, UK and India, it seems that Bytedance wants to turn its focus to Asia, and is planning to make Singapore its gateway to this part of the world.
Bytedance founder and CEO Zhang Yiming has long eyed Southeast Asia’s 650 million increasingly smartphone-savvy population, but why Singapore and what does this move mean for us?
S’pore A Popular Location For Investors
Singapore is highly attractive to investors because of our developed infrastructure, political stability, open business policies, a skilled workforce, the use of English as the main working language and respect for intellectual property rights.
Last year, it retained its position as the second best place to do business in a World Bank ranking.
We came ahead of Hong Kong, Denmark and Korea, with the US, Georgia, UK, Norway, and Sweden rounding out the top 10 spots. The top spot went to New Zealand.
Singapore, which also has a robust startup scene, is currently home to at least five unicorns – Grab, Lazada, Razer, Trax and Sea (before it went public).
Politically, S’pore Has A Neutral Stand
It makes sense for Bytedance to make Singapore its beachhead in order to expand to other parts of Asia as Singapore is a “neutral” country.
In 2019, Prime Minister Lee Hsien Loong had said that Singapore would resolutely stick to its policy of maintaining good ties with the US and China even as the two major powers remained at loggerheads.
Singapore has strong security ties with the US as Singapore purchases advanced equipment from the US, and the Singapore Armed Forces train with their American counterparts.
At the same time, Singapore also has deep economic ties with China – with the two countries joining hands in three major joint projects in China.
With pressures from both sides to take a stand, Singapore will continue not to take sides between US and China to avoid misunderstandings.
With that, we can say that it is relatively safe for a Chinese company to set up their base here.
Bytedance Set Up A “Satellite” Base In S’pore About 2 Years Ago
ByteDance already has a presence here in Singapore as they had set up their Singapore team in a WeWork coworking office in December 2018.
A year later, it was speculated that ByteDance would be leasing a whopping 60,000 sq ft space in One Raffles Quay, a Grade A office building located in the central business district (CBD).
Wall Street Journal also confirmed with real estate consultancy Savills Singapore that the firm has indeed already taken up two floors in the prime location.
Moreover, they have been actively hiring in Singapore on ByteDance and TikTok’s careers pages for a range of positions.
It is safe to say that they have “tested the waters” here and probably find Singapore a viable location to continue doing business.
What Does Bytedance’s Move Mean?
Taking Their Social Media Services Deeper Into Asia
Following setbacks in India, the UK and US, Bytedance will make use of this move to take their social media services deeper into Asia and expand beyond TikTok, Singapore-headquartered business messaging service Lark and music streaming service Resso.
Southeast Asia’s 650 million increasingly smartphone-savvy population offers many opportunities for Bytedance to grow a stronger presence for their other content platforms here.
It was reported in August that TikTok is piloting in Southeast Asia, the live-streaming commercial initiatives pioneered in China.
Chinese Competition Will Be Intensified In Asia
Competitors Alibaba Group Holdings and Tencent Holdings are also making inroads into Asia.
Tencent Holdings, the parent company of WeChat, is reported to be setting up its regional hub here.
Alibaba’s possible US$3 billion investment in ride-hailing giant Grab also suggests that it is looking to access Grab’s millions of customers in eight countries, a growing delivery fleet as well as a stake in digital wallet and financial services.
The Chinese competition is likely to intensify against the likes of Facebook, Google, Microsoft and Amazon here, but much still has to be done as these US companies have a strong presence in Singapore.
Moreover, online payment platforms AliPay and WeChat Pay are not that adopted here in Singapore.
Instead, the market is dominated by e-payment options such as credit cards, NETS, ez-link cards, peer-to-peer funds transfer service PayNow, e-wallet DBS PayLah! and SGQR payment codes.
With the impending increased competition, will we see the same in adoption rate of Chinese apps in Singapore? That’s a possibility.
Bytedance Could Invest In SEA Startups
In a bid to accelerate growth, Bytedance may look into increasing its investment into Southeast Asian startups.
Bytedance has a string of acquisitions in its portfolio including News Republic and Flipagram.
In 2017, Cheetah Mobile sold global news app News Republic to Bytedance for US$86.60 million (S$118 million), in a bid to leverage on the AI technology of Toutiao.
With Toutiao as China’s largest AI–powered information network, the acquisition of News Republic helped broadened its reach into more overseas markets and provide users with more diverse and relevant content.
In the same year, ByteDance acquired Los Angeles start-up Flipagram for an undisclosed amount. Flipagram is an app that allows users to turn their photos into slideshows and videos.
With the acquisition, Toutiao can help Flipagram videos find the right audience even without a social component by integrating Flipagram videos into personalised content feeds while Flipagram, in turn, gave Toutiao a line to the US market.
Applying For A Digital Bank Licence Here
Bytedance is planning to venture into digital banking here, which means it is planning to gain a foothold in fintech here.
The firm has applied for a wholesale digital banking license in Singapore. If granted, it would allow the company to serve corporate clients including small and medium-sized enterprises (SMEs).
In their job ads for tech positions, ByteDance indicated that it is building a Singapore-based global payment system to offer cross-border payment solutions for its products and services.
With Singapore’s position as a regional finance hub for Southeast Asia, a digital wholesale bank license could support ByteDance’s wider regional expansion plans.
Create Hundreds Of Jobs In S’pore
A quick check on their jobs portal shows that Bytedance currently has more than 200 job openings in Singapore, for positions ranging from payments to e-commerce and data privacy.
The company already has 400 employees working on technology, sales and marketing in the city-state, one of the people said.
The private sources also reveal that Bytedance is looking to establish a data centre here as well.
It is estimated that with Bytedance’s plans in Singapore, it will lead to more demand for digital marketing, social media marketing, data science, fintech, etc, roles.
Hundreds of Bytedance jobs are expected to be added over the next three years here.
Featured Image Credit: Chenpe.com