Exclusive information obtained by LatePost reveals that ByteDance is currently relocating Dongchedi employees to a newly established wholly-owned subsidiary. The legal representative of the company will be taken over by the strategic leader of Dongchedi, and a small number of employees originally belonging to ByteDance will have their labor relations transferred to the new company around the end of January. In the future, Dongchedi will have its own independent office location.
Establishing a new company may be for the purpose of going public, finding partners, or introducing external shareholders; it may also be for independent accounting and cost reduction. It is understood that ByteDance has internally discussed the possibility of spinning off Dongchedi for an IPO, but there is no specific timeline.
Dongchedi is a car information product. It originated from the Toutiao’s car channel and was incubated by ByteDance’s commercialization department. It was launched as an independent app in 2017.
Based on QuestMobile data, the number of daily active users for Dongchedi increased by 57% from the first half of 2021 to the first half of 2023, reaching 7.32 million. In comparison, the well-established platform Yiche (excluding Yiche car quotes) had a slightly slower growth rate in daily active users, with an increase of only 18% to reach 6.54 million.
Autohome is the largest platform in the industry, with a daily active user count fluctuating around 12 million in the past two years, without much growth. In the first three quarters of 2023, Autohome‘s operating revenue and net profit were respectively 5.3 billion yuan (approximatly ＄0.7 billion) and 1.5 billion yuan (approximatly ＄0.21 billion), with a market capitalization of 26.4 billion yuan (approximatly ＄3.7 billion) at yesterday’s closing.
Compared to the other two competitors, Dongchedi is willing to spend money on content and dares to try new things. In 2018, just one year after its establishment, Dongchedi announced an investment of 500 million yuan (approximatly ＄70 million) to produce 100 core video IP programs. In October 2022, Dongchedi plans to invest millions of cash in a year to collaborate with creators in building 50 new energy vehicle column IPs. The ‘Explosive Collision between BYD and Jihu’ video not only attracts users’ attention but also generates a large number of long-tail topics.
It is also more involved in the car trading process. In May 2022, ‘Dongchedi Chongqing Live Car Selling’ was launched, and two months later it started selling cars offline at car experience stores in Chongqing. Selling cars offline on automotive internet platforms is not a new concept pioneered by Dongchedi. Yiche and Autohome had made similar attempts in earlier years but eventually gave up.
The Dongchedi is not the first product planned for spin-off by ByteDance.
According to media reports, in 2021, ByteDance had considered spinning off its real estate platform, xflapp, and introducing external shareholders for independent development. However, with significant changes in the real estate industry in recent years, xflapp not only failed to become independent successfully but also transferred the company entity responsible for operating offline real estate brokerage stores to Maitian Holdings in 2023 while retaining only its online business.
According to LatePost, it is understood that Liu Xiaobing, the head of ByteDance’s commercial product technology department, will focus on overseas business in the future, managing TikTok products and related technologies. Some of the domestic business lines that used to report to Liu Xiaobing will now report to Zhao Xiuying in the commercial product technology department for China.
Liu Xiaobing has previously worked at Google and Tencent‘s technical departments, where he utilized machine learning technology to develop and optimize advertising products. In 2018, he joined ByteDance and participated in the construction of the Ocean Engine. The Ocean Engine is a marketing platform created by ByteDance for advertisers.
Zhao Xiuying joined ByteDance in 2020 and became a subordinate of Liu Xiaobing. Initially, she was mainly responsible for technical-related work. In recent years, her scope of authority has continued to expand, and by early 2023, it already included the business related to closed-loop advertising. Closed-loop advertising refers to the ads placed on the platform by merchants selling products on Douyin, which is one of Douyin’s main sources of revenue.
Liu Xiaobing previously managed commercialized products, research and development, and operations, hoping to promote cooperation between various functional departments. Currently, several middle-level technical personnel including data manager Wang Yong and some industry product managers such as Jiao Yingying have already reported to Zhao Xiuying.
After Zhao Xiuying took over the domestic business, Liu Xiaobing’s task is to help accelerate the monetization of TikTok, whose commercialization progress is not as expected.
In the future, Zhao Xiuying will continue to report to Liu Xiaobing, while Liu Xiaobing will report to Zhang Lidong, Chairman of Douyin Group and Head of Commercialization.
Over the past decade, when a flagship product showed signs of decline, ByteDance always managed to find a broader market and quickly dominate it – such as Douyin taking over as a popular app from Toutiao in 2018, and Douyin e-commerce helping break through the ceiling for advertising in 2021.
According to media reports, ByteDance’s revenue is expected to exceed $110 billion in 2023, surpassing Tencent with a high probability. However, the year-on-year growth rate has dropped from around 70% in 2021 to about 30%. During the stock buyback at the end of last year, ByteDance’s valuation decreased by approximately 33% from its peak of $400 billion in 2021 to around $268 billion.
The sense of urgency for growth has returned. However, ByteDance has not yet found a new market that matches its scale and ambition. To further increase advertising revenue, it still relies on domestic and overseas e-commerce businesses.