How Chinese apps like TikTok are quietly racking up American users

KEY POINTS

  • Chinese apps like TikTok and games developed by Tencent have become popular with U.S. consumers.
  • In the first quarter of 2019, apps developed by Chinese firms or by companies with large Chinese investors, brought in revenues of $674.8 million in the U.S., according to Sensor Tower. That’s a 67 percent year-on-year rise.
  • Chinese companies like Bytedance and Tencent have used different marketing in the U.S. and acquisitions to expand beyond China.

Mobile applications developed by some of China’s biggest technology firms have been catching on with U.S. consumers in the past few years, underscoring how companies in the world’s second-largest economy are expanding beyond their domestic market and Asia.

In the first quarter of 2019, apps developed by Chinese firms or by companies with large Chinese investors, brought in revenues of $674.8 million in the U.S., according to data compiled by Sensor Tower for CNBC. The mobile app research firm only looked at the top 100 applications by revenue and downloads across Apple’s App Store and the Google Play Store. The revenue accounted for 22 percent of the top 100 apps’ total sales.

This year’s first-quarter haul marks a more than 67 percent year-on-year rise in revenue from the same period in 2018.

Chinese technology firms have managed to expand into America despite the ongoing U.S.-China trade war and negative sentiment toward companies like Huawei from Washington.

Viral hit TikTok was the third-most downloaded app in the U.S. in the first quarter, just behind Facebook Messenger and a game called “Color Bump 3D.” TikTok is made by ByteDance, one of the most highly valued private technology firms in China.

While it goes by the name of TikTok in the U.S., the app is known as Douyin in China. Changing names and branding have helped Chinese apps succeed with American users.

“Chinese app publishers are becoming more adept at understanding what resonates with U.S. consumers, whether it be carving out a new niche in social media with apps such as TikTok or capitalizing on hot trends among Western gamers with battle royale titles including PUBG Mobile,” Sanders Tran, a data analyst at Sensor Tower, told CNBC.

“They have also greatly expanded their understanding of user acquisition in the U.S. market, which has allowed them to mount much more effective marketing campaigns. They’ve also backed these up with substantial spending, frequently topping the advertiser charts on Facebook and other mobile app install networks.”

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