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TikTok’s Chinese Parent Has Another Wildly Popular App in the U.S.
CapCut, the video-editing tool from ByteDance, helps users go viral on TikTok, Instagram and YouTube
App trackers show that CapCut has been downloaded more in recent weeks than TikTok.
By Raffaele Huang, WSJ
March 19, 2023 9:00 am
One of the hottest apps in the U.S. right now is TikTok’s lesser-known sibling that is also owned by Chinese parent ByteDance Ltd.
App trackers show that CapCut, a video-editing tool that helps people quickly create online videos and memes, has been downloaded more in recent weeks than TikTok, the short-video sharing app that has faced rigorous scrutiny in the U.S. over ByteDance’s access to user data.
CapCut allows people to edit videos easily with various templates, filters, visual effects and music. Users say it helps them produce clips that look more professional and have a better chance of going viral on TikTok and other platforms such as Meta Platforms Inc.’s META 0.42%increase; green up pointing triangle Instagram and Alphabet Inc.’s GOOG -0.54%decrease; red down pointing triangle YouTube.
Launched in 2020, CapCut has been riding the short-video wave and now has more than 200 million monthly active users, according to Shanghai-based data tracker Diandian. TikTok has more than one billion users globally.
As a tool app, it has largely avoided regulatory scrutiny over its practice of handling user data. The Biden administration has pushed ByteDance’s founders to divest their holdings in TikTok to address concerns over its threats to U.S. national security or face a ban. On Friday, the Journal reported that the Justice Department is investigating the surveillance of American journalists by TikTok’s Chinese owners.
TikTok has said it wouldn’t share data with Chinese authorities and is proposing a deal to ring fence the company’s data and algorithm in the U.S.
CapCut said it stores such data in the U.S. and Singapore, just as TikTok does. It declined to comment further.
CapCut soared to the top of app-store charts late last year and has hovered near the pinnacle of weekly rankings of apps downloaded in the U.S., together with a wave of other Chinese-developed apps including TikTok, as well as shopping platforms Temu and fashion marketplace Shein, data from app trackers including Sensor Tower show.
CapCut’s global downloads jumped 43% to more than 400 million last year; around 7% of its global downloads since last year came from the U.S., according to Sensor Tower.
“It’s really easy to use. CapCut brought so many good features, and for free,” said Edoardo Liotta, a 25-year-old Singapore-based TikTok user with more than 80,000 followers who downloaded the app late last year.
“It makes the learning curve better for people who are getting on TikTok,” he said.
After starting with a buzzy news aggregator in 2012, Beijing-based ByteDance has rapidly grown an app empire using its powerful algorithms. It runs TikTok abroad and the Chinese version, Douyin, at home. ByteDance is one of China’s most valuable technology giants and TikTok challenges Meta and Google for advertising dollars.
CapCut is less of a revenue earner, but ByteDance is looking to monetize the app’s popularity more, people familiar with the company said. Late last year, CapCut started charging users for cloud storage service as well as for more features and effects.
It plans to roll out an enterprise version targeting corporate users, according to its website. In December, ByteDance launched a paid version of its Chinese equivalent to CapCut, called Jianying, that allows multiple users to co-edit a video.
TikTok has heavily promoted the video editor to its users: Videos edited by CapCut usually show a button—with phrases like “try this template” or “editing made easy”—where viewers are directed to CapCut.
CapCut saw its first leap in mobile downloads in the U.S. in May 2021, according to app-analytics firm data.ai, after it rolled out an effect called “3D Zoom,” which closes in on the subject of a photo and pulls the background in a way that it appears to be a three-dimensional picture. Around Halloween and Christmas last year, CapCut launched several festival templates, attracting hundreds of thousands of new daily downloads.
Grace Windheim, a 24-year-old San Francisco-based content creator, has posted videos on YouTube to teach people how to make trending videos with CapCut. A video where she explained the “3D Zoom” effect, posted in 2021, has attracted more than a million views. She said popular templates and effects have likely helped people earn followers and views.
When ByteDance first launched CapCut, the video editor was largely a clone of Jianying, which the company rolled out a year earlier in China. While it continued to copy to CapCut features that have proven successful on Jianying, CapCut has also been creating features that fit into different local markets, people familiar with the app said.
CapCut also provides templates for posts and advertisements on Instagram, Facebook, YouTube and LinkedIn.
As artificial intelligence-generated content has become a hit recently, multiple teams at CapCut are working to launch AI-driven features, people familiar with the projects said. Among them is a feature that allows users to generate videos in seconds simply by providing a text caption. Jianying introduced a similar feature in 2021.
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In the U.S., CapCut has been recruiting template creators to help enrich its resource pool, offering cash rewards of up to $1,000 to those who created viral templates, according to a notice in the app.
CapCut’s revenue, mainly from subscriptions and advertising, has grown faster in recent months, according to data.ai. Its competitors include Chinese peers like Hangzhou Xiaoying Innovation Technology Co.’s VivaVideo and InShot Inc., as well as U.S. rivals like Vimeo Inc.’s Magisto and Ubiquiti Inc.’s VN Video Editor.
Hangzhou Xiaoying said in its initial public offering prospectus last May that the number of VivaVideo subscribers declined 32% in 2021, referencing competition from CapCut. It said the app has leveraged its partnership with Meta to grow its user base since then as people can now share with one click to Meta’s platforms including Facebook and Instagram Reels.
CapCut and VivaVideo are banned in India, along with TikTok, Shein and Tencent Holdings Ltd.’s WeChat. Since 2020, New Delhi has blocked more than 200 Chinese apps as India-China relations soured following deadly border clashes between their troops.
Write to Raffaele Huang at firstname.lastname@example.org