Monday, March 4, 2024

TikTok’s Chinese parent ByteDance has another popular app worldwide

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TikTok’s lesser-known sibling app CapCut has surged in popularity in the United States, overtaking TikTok in downloads over recent weeks.

CapCut is a video-editing tool owned by ByteDance, the Chinese parent company that also owns TikTok, and has more than 200 million monthly active users. It allows users to edit videos with various templates, filters, visual effects and music to create professional-looking clips that have a better chance of going viral on social media.

CapCut has largely avoided regulatory scrutiny over its practice of handling user data as it is a tool app, unlike TikTok, which has faced rigorous scrutiny in the U.S. over ByteDance’s access to user data.

The Biden administration has pushed ByteDance’s founders to divest their holdings in TikTok to address concerns over its threats to U.S. national security or face a ban. On Friday, the Journal reported that the Justice Department is investigating the surveillance of American journalists by TikTok’s Chinese owners.

While TikTok has said that it would not share data with Chinese authorities and is proposing a deal to ring fence the company’s data and algorithm in the U.S., CapCut says in its privacy policy that to provide services, it collects content such as photos and videos that users upload, as well as user data including their location, gender, and birthday, which is common for video-editing tools.

CapCut has soared to the top of app-store charts since late last year and has hovered near the pinnacle of weekly rankings of apps downloaded in the U.S., together with a wave of other Chinese-developed apps including TikTok, as well as shopping platforms Temu and fashion marketplace Shein, data from app trackers including Sensor Tower show.

CapCut’s global downloads jumped 43 percent to more than 400 mln last year, and around 7 percent of its global downloads since last year came from the U.S., according to Sensor Tower.

ByteDance is one of China’s most valuable technology giants and TikTok challenges Meta and Google for advertising dollars. CapCut is less of a revenue earner, but ByteDance is looking to monetize the app’s popularity more, people familiar with the company said.

Late last year, CapCut started charging users for cloud storage service as well as for more features and effects. It plans to roll out an enterprise version targeting corporate users, according to its website.

As artificial intelligence-generated content has become a hit recently, multiple teams at CapCut are working to launch AI-driven features, people familiar with the projects said. Among them is a feature that allows users to generate videos in seconds simply by providing a text caption.

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