ByteDance is pushing a new app in the U.S. as TikTok faces a ban

Chinese tech big ByteDance is pushing one other social media app within the U.S. — at the same time as its flagship quick video app TikTok faces a doable ban stateside.

While it might be a part of a business technique for ByteDance, a brand new product to switch TikTok is not one of the best answer both, analysts informed CNBC.

“It’s certainly interesting timing. It seems like ByteDance is pushing Lemon8 as a potential alternative to TikTok,” stated Lindsay Gorman, senior fellow for rising tech on the German Marshall Fund.

In March, ByteDance invited creators onto its “new Lemon8 platform” earlier than it formally rolls out within the U.S., whereas citing the success of its “sister company TikTok,” in accordance with media stories.

Lemon8, a mix of Instagram and Pinterest, was first launched in Japan in early 2020. The way of life app which focuses on well being, wellness and wonder has shortly climbed the charts within the U.S.

According to analytics corporations knowledge.ai, Lemon8 jumped 693 positions to turn out to be the second most downloaded way of life app within the U.S. within the final 30 days, bumping actual property market Zillow to 3rd place whereas trailing behind Pinterest.

Lemon8 has amassed 17 million downloads globally since its launch, in accordance with Apptopia.

“Some of the algorithms that are used in Lemon8 are similar to or exactly the same as the recommendation algorithms in TikTok, which of course, would make both of those apps tremendously popular because they feed you what you want to see and so on,” stated Glenn Gerstell, senior advisor at Center for Strategic and International Studies.

Lemon8’s rise in reputation comes as U.S. lawmakers take into account whether or not the Chinese-owned guardian firm of TikTok, ByteDance, must divest its stake within the well-liked quick video app which has come beneath immense scrutiny.

In March, U.S. lawmakers questioned TikTok CEO Shou Zi Chew in Congress to get solutions on TikTok’s capability to function independently of Chinese influences on its guardian. The congressional questioning didn’t seem to allay lawmakers’ issues.

Analysts like Gorman say that selling Lemon8 aggressively might be seen as a “competitive move” by the corporate because it tries to “expand into different consumer markets and segments with more image-based and longer-form written content as opposed to only short-form videos.”

“It certainly is a business strategy. [There’s] nothing wrong with having competing products around the world,” stated Gerstell.

But Lemon8’s hyperlinks to ByteDance and TikTok will come beneath the radar of U.S. regulators too, particularly because the app continues to rise in reputation.

“If Lemon8 gets shut out of the U.S. market, they have still got [millions of] people around the world who could be users of this app,” identified Gerstell, who stated Lemon8 has already seen success in Japan.

“From a business strategy’s point of view, I don’t see a lot of downsides,” stated Gerstell.

ByteDance did not reply to CNBC’s request for remark.

Lemon8 might additionally serve as a substitute for content material creators if TikTok ever will get banned within the U.S., stated each Gorman and Gerstell.

“The fact that we’re getting a dedicated marketing push onto Lemon8 may be an effort to move creators onto a platform if TikTok is facing a ban,” stated Gorman, who additionally acknowledged it is “easier said than done” — and that shifting 150 million TikTok customers within the U.S. from one app to a different isn’t any small feat.

Creating one other app to switch TikTok is just not a fast answer for ByteDance, the analysts stated. Chinese apps will proceed to be scrutinized by the U.S. as tensions with China should not dying down.

“It might give them a fallback in case something gets hurt on TikTok but I don’t see it as generating a solution for ByteDance in this regard,” stated Gerstell.

As Lemon8 continues to get extra well-liked, it actually speaks to the necessity for U.S. regulators to give you a complete framework to grasp the dangers of Chinese web apps and handle them earlier than they spiral uncontrolled, stated Gorman.

“This problem will just proliferate. It’s a bit like Russian nesting dolls, right? You open TikTok, then you get another app. You open that app, you get another app,” stated Eric Noonan, CEO of cybersecurity compliance service supplier CyberSheath.

“So we really need a framework to deal with this. Otherwise, we will be playing Whack-A-Mole till the end of time.”