ByteDance's Subsidiary Dongchedi to Operate Independently, Sources Say

Technology Author: Muriel Meng Editor: Yiru Qian Jan 11, 2024 06:12 PM (GMT+8)

ByteDance has established another wholly owned subsidiary Dongchedi.

ByteDance Building

Recently, EqualOcean learned from the public information that ByteDance's subsidiary, Dongchedi (Chiense: 懂车帝), is expected to be established as an independent company. Currently, ByteDance is in the process of transferring Dongchedi's related employees to the newly established wholly-owned subsidiary, with the strategic leader of Dongchedi serving as the legal representative. A small number of employees originally belonging to ByteDance will be among the first to transfer their employment relationships to the new company by the end of January. In the future, Dongchedi will have its own independent office location.

From a strategic perspective, establishing a new company may facilitate an IPO, seek partners, and introduce external shareholders. At the same time, it will also help achieve independent accounting and cost reduction.

Dongchedi, formerly known as the automobile channel of TouTiao (Chinese: 今日头条), was incubated by ByteDance's commercialization department, and its independent app was launched in 2017.

According to QuestMobile data, Dongchedi's daily active user count grew by 57% from 2021 to the first half of 2023, reaching 7.32 million. In comparison, the growth rate of established platform BitAuto (Chinese: 易车网) was slower, with an increase of 18% to reach 6.54 million. The industry leader is Autohome (Chinese: 汽车之家), currently the largest platform in terms of user numbers, which has maintained a user count of around 12 million in the past two years.

Compared to its competitors, Dongchedi has made significant investments in content. In 2018, just one year after its establishment, Dongchedi announced a CNY 500 million investment to produce 100 core video IP programs. In October 2022, Dongchedi planned to invest millions of in cash over a year to collaborate with creators in building 50 new energy vehicle program IPs. Their video titled "BYD and Foxconn's explosive collision" not only attracted users' attention but also generated a large number of niche topics.

Dongchedi has also expanded its business into the automobile trading sector. In May 2022, "Dongchedi Chongqing Live Car Sales" went online, and two months later, it began experimenting with offline sales in automobile experience stores in Chongqing. Previously, automotive internet platforms Yiche and Autohome had also attempted offline car sales but ultimately gave up.

Dongchedi is not the first product that ByteDance has planned to spin off. According to public reports, in 2021, ByteDance considered spinning off its real estate platform "Xingfu Li" (Chinese: 幸福里) and bringing in external shareholders for independent development. However, due to significant changes in the real estate industry in recent years, the Xingfu Li project did not succeed in becoming independent.

Financially, ByteDance's overall revenue growth has been strong. In 2022, ByteDance's revenue was approximately USD 85.2 billion (CNY 6,220 billion), with a dramatic year-on-year increase of 38%. In 2023, the revenue reached USD 110 billion, surpassing Tencent.

Furthermore, to achieve business diversification and capture more market share, ByteDance is transforming Douyin into an integrated platform with built-in features for food orders, flight, and hotel bookings, aiming to compete with Alibaba and Meituan in these areas.

In the overseas market, ByteDance is aggressively developing its e-commerce business through TikTok. In its main market, the United States, it is expected to expand its e-commerce business tenfold by 2024, aiming for USD 50 billion in GMV, further strengthening its position among the "Four Little Dragons" of cross-border e-commerce in China.