TikTok is “devouring” Facebook from the inside: sucking away young users and challenging its dominance – yqqlm

If it is said that in 2021, TikTok is a problem that Facebook cannot solve, then this problem has been “escalated” again this year.

Recently, Reuters commented that TikTok is “devouring” Facebook from the inside:Not only sucked away Facebook’s young users, but also began to challenge Facebook’s new media dominance.

Reuters’ interpretation is not sensational. In the latest first-quarter earnings report, the performance of Facebook’s parent company Meta gave the market mixed results.

The good news is that Facebook’s daily active users reached 1.96 billion in the same period, a year-on-year increase of 4%, which was better than investor expectations.

Worryingly, Meta’s revenue was US$27.908 billion, an increase of 7% year-on-year, but the growth rate fell to the lowest level in 10 years of listing.

After the news was announced, Meta’s stock price soared 19% after the market, but the media generally believed that this was just an oversold rebound. Looking back at the last earnings call, Facebook user growth stalled for the first time, surprising everyone. CEO Zuckerberg even blamed rival TikTok in part. Since then, Meta’s share price has been falling all the way.

Meta’s share price is now nearly halved from the year’s highs. Shares in the company were down 48% from the start of the year as of the previous session, far underperforming the broader market (down 12%).

On the other hand, although TikTok is not listed and cannot be measured by market value, its development momentum and Meta are polarized.

From the perspective of the hard indicators of active users, according to data from the analysis company Data.ai., TikTok has nearly 1.6 billion monthly active users in the first quarter of 2022. Although the absolute number is not as good as Facebook’s 2.9 billion, the growth rate has reached 45%, which is still a big crush. Facebook.

One reason TikTok is a headache for Facebook is that its content is high-quality, and users are willing to pay for it. According to Data.ai data, in the first quarter of 2022, consumer spending on TikTok ranked first among all major apps and games in the world.

On the other hand, TikTok has also challenged Facebook’s new media hegemony. According to a report by the Pew Research Center, in September last year, Meta-owned social platforms, including Facebook and Instagram, were the daily news source for 31 percent of Americans, compared with 6 percent at the time. But recently, TikTok has gradually become a channel for people to understand information.

In order to defeat TikTok, Meta pinned its hopes on its own short video product Reels, or another remake of TikTok.

In this earnings call, Zuckerberg said that Reels will be one of the three main growth engines for Meta in the future. “In the first quarter of this year, the growth of short videos was very fast, and users spent 20% of the time on Reels on Instagram. The company will put more effort into Reels.”

But Reels is still struggling to reverse the loss of Meta users.

According to a survey by investment bank Cowen, about 37% of Facebook users are also using TikTok, while the proportion of Instagram is as high as 51%.

Meta imitates TikTok, not to lift its opponents – but to fight back in real self-defense.