Fri. Nov 27th, 2020

SHANGHAI — Chinese entertainment upstart ByteDance is considering a public listing of Douyin, the domestic version of short video app TikTok, Nikkei learned on Monday.

The Chinese company’s U.S. operation has been pressured by the administration of President Donald Trump. But the company has continued growing with domestic subscribers of over 600 million and seems to have determined it is a good timing for a listing.

Sources at ByteDance told Nikkei that the Chinese company has already started the initial stage of dialogue with investment banks over the listing, to occur either in Hong Kong or Shanghai. A ByteDance spokesperson declined to comment.

ByteDance is providing services under the name TikTok overseas, including in the U.S. and Japan, and as Douyin in China. The company has reportedly been considering listing the Douyin business.

ByteDance is also providing a news app, among other services. The company is reportedly aiming to list its Douyin business, but the timing is still unknown.

ByteDance offers TikTok — which allows users to post 15-second videos — in more than 100 countries. It appears that the company’s bottom line has turned positive, lifted by ad revenue on Douyin.

Unlike its China unit, there are uncertainties over the U.S. operation, which has 100 million subscribers. Proposals have been made to spin off its overseas unit and set up a new company with Oracle and Walmart, but Washington and Beijing are still at odds over its control and have not reached an agreement.

Despite pressure by the Trump administration, the company has continued growing, with domestic subscribers topping 600 million. It seems the company wants to raise funds to expand the business.

The U.S. Department of Commerce announced in September that it would ban new downloads of the TikTok app in the country. But a federal-district court in Washington, D.C., has ordered a temporary stay, saying that the Trump administration has exceeded presidential authority with the ban.

On Oct. 8, the administration went to the Court of Appeals to enforce a distribution ban.

In 2016, ByteDance launched a similar service in China that became instantly popular.

TikTok’s precursor was the American video-posting app Musical.ly, which rapidly gained users in Europe and the U.S. After ByteDance acquired the American company in 2017, the Chinese company leveraged Musical.ly’s users to grow into a global tech giant.

According to U.S. research firm CB Insights, ByteDance has a corporate value of about $140 billion, making it the world’s largest decacorn.

By Bureau