The battle for dominance in social media and short-form video content in the U.S. has seen TikTok become one of the biggest apps in the country. TikTok has seen others try to emulate its features and could benefit from a potential ban.
But TikTok’s parent company might have a backup plan in the works.
What Happened: Members of Congress grilled TikTok CEO Shou Chew during a recent hearing and are calling for TikTok to be banned in the U.S.
This could hurt ByteDance, the owner of TikTok, as it dominated the market with the app for years.
ByteDance could already be working on its backup plan in case TikTok is banned or to help push its growth in the market further.
Lemon8, described as a rival to Instagram, is now one of the top 10 downloaded apps in the U.S., according to TechCrunch.
Calling itself a “lifestyle community,” Lemon8’s jump into the top 10 comes after never previously ranking in the top 200 charts for apps according to the report.
App store intelligence company data.ai called the surge into the top 10 as “significant” and the potential benefactor of a paid acquisition effort by ByteDance.
Lemon8 was launched globally in March 2020 and had not been officially released in the U.S. app stores. Over the past several days, Lemon8 had an official launch and saw interest and paid ads for the app increase.
Data from Apptopia estimates Lemon8 has seen 16 million global downloads, with Japan accounting for 38% of installations and the app’s top market. Apptopia estimates 4.25 million monthly active users for Lemon8 in the U.S.
One of the items helping with the increased exposure to Lemon8 is ironically TikTok. Creators on TikTok have been sharing videos about Lemon8 and recommending the app to followers.
TechCrunch shared that one creator compared Lemon8 to if “Pinterest and Instagram came together and had a baby.”
The report makes noted the TikTok videos recommending Lemon8 are not marked as sponsored content. A previous Business Insider report said TikTok users were getting paid to post on Lemon8.
Related Link: Should TikTok Be Banned In The U.S.? 69% Of Benzinga Followers Say This
Why It’s Important: A ban of TikTok in the U.S. could provide a boost to other social media platforms and video platforms like Snap Inc SNAP, YouTube, and Meta Platforms Inc. META owned Instagram and Facebook.
The launch and increased interest in Lemon8 could see users make the switch to the other ByteDance platform instead. Other Chinese apps could also benefit as they launch and offer components of what made TikTok successful.
Ranking ninth on the app charts, Lemon8 already finds itself ahead of YouTube, WhatsApp, Gmail and Facebook, although many of those apps have been downloaded by users previously.
In the first three weeks of March, several Chinese-related apps were among the most downloaded in the U.S. Topping the list was TEMU, an online marketplace for the U.S., which is owned by Chinese e-commerce company Pinduoduo Inc PDD. Temu was featured in several Super Bowl commercials in February.
TikTok video-editing app CapCut, TikTok and fashion retailer Shein ranked second, third and fourth, respectively. Facebook ranked fifth and was the only non-Chinese app in the top five apps.
Deepwater Asset Management Managing Partner Gene Munster noted recently the discussion to ban TikTok has two items that shouldn’t be overlooked. Munster said the ban discussion shows tensions between the U.S. and China are increasing and short-form video platforms such as TikTok could be addictive and dangerous to the youth of the nation.
“Short-form video’s impact on mental health is becoming a hot-button issue,” Munster said.
Munster noted that while companies such as Meta Platforms could benefit from a TikTok ban, they could face pressure from Congress down the road.
Munster said that shareholders of Snap and Meta Platforms “should take note” as regulatory hurdles could come their way soon.
Some states are pushing forth plans to limit time spent on social media and video apps among teenagers.
Read Next: Conflict Of Interest? Congress Members Who Own META, GOOG, SNAP Shares Could Benefit From TikTok Ban
Photo: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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