With the company under heavy fire from the most economic sanction-obsessed US President in history, TikTok’s American CEO has stepped down
28 August 2020 | Adina-Laura Achim, Jing Daily
“In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for,” Mayer said in a letter to staff obtained by CNBC. “Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company.”
Hours after this shocking news broke, Walmart announced that it was joining forces with Microsoft in an attempt to buy TikTok.
ByteDance suing Trump Administration
On Monday, the short-video-sharing app owned by the Beijing-based company ByteDance announced that it is suing the Trump administration in response to the President’s executive order demanding that ByteDance divest all TikTok operations inside the US.
As reported by APAC News, such litigation can prove very difficult because the US government can refuse to tender evidence before courts under the blanket claim that they cannot be release on “national security” grounds.
It is too early to anticipate how the market will react to these changes, but TikTok should have a hard time navigating a challenging political and economic landscape.
While the app is challenging the Trump administration’s executive order, the current distress surrounding TikTok could completely alter the company, and it could emerge from this crisis as an “American company.”
But that would come with risks, as consumers in China and other emerging markets where Anti-Americanism is prominent could switch to alternative apps.
The next TikTok is more than ready to emerge in China. TikTok’s top competitor, Likee (formerly LIKE), which is the Singapore-based short video platform owned by BIGO Technology (which, in turn, is owned by the Chinese company JOYY), would eagerly take over the app’s market share.
And while the company’s 100 million US-based active users and $500 million in US-revenue this year are impressive, they are still small compared to China, where Douyin recently hit 400 million daily active users. Furthermore, Bloomberg showed how Douyin — the Chinese version of TikTok — was responsible for 87 percent of the app’s revenue.
So, it makes sense for ByteDance to cut TikTok US loose, but more importantly, what does TikTok’s future look like in a world that’s exceedingly turning anti-US? And now, TikTok will have to survive in a highly saturated app market against both newcomers in China and established Western veterans like Facebook-owned Instagram.
Australian exec takes over
The interim CEO has been announced as Australian-born Vanessa Pappas, she has been general manager of the US division of ByteDance since the start of 2019. She’s also overseen the Australia and New Zealand operations since June last year.
In a post on Twitter, she wrote, “Incredibly proud and humbled to take the role of interim head of TikTok. Our community and our team who work so hard to enable this product continue to inspire me. It’s truly amazing what we’ve accomplished in 2 years, I have no doubt what we can accomplish in this next chapter!”
Pappas leads the company not only at a time of great US-China tension, her company is also under pressure from a vocal anti-China lobby in Australia as its relations with China continue to worsen.