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Coco Feng

TikTok owner ByteDance has taken a stake in a company that runs multiple online reading platforms, bringing it up against rival Tencent Holdings in yet another arena.
Changes to Beijing Dingtian Culture Entertainment’s company registry records last week showed that a ByteDance subsidiary had taken a stake of about 10 per cent, becoming the literature-focused company’s third-largest shareholder.
Dingtian Culture runs three book-reading sites, Sweetread, Guazixs and Dmread, and also produces television dramas adapted from novels.
ByteDance did not immediately respond to a request for comment on the investment. A spokesman for Beijing Dingtian declined to disclose the size of the investment or details of its partnership with ByteDance.
The deal marks yet another step by ByteDance to move into an area dominated by Tencent, which is the largest shareholder of the country's top e-book publisher, Hong Kong-listed China Literature.
‘Healthy, positive, correct’: China’s censorship tightens grip on online lit
The two social media giants have been increasingly stepping into each others’ territory in recent years. ByteDance, the Beijing-based owner of the hugely popular and controversial TikTok app, signed deals with three major Chinese mobile game developers in the first half this year, ratcheting up its battle with Tencent, China’s top gaming company and the world’s largest by revenue.
Meanwhile, Tencent has been testing a new feature on its ubiquitous app WeChat focusing on short-form content, which was popularised by TikTok and its mainland Chinese version Douyin. It also blocked WeChat links for several ByteDance products including Douyin and Feishu, a remote work tool which competes with its enterprise collaboration products WeChat Work and Tencent Meeting, earlier this year.
While the market is not currently worth as much as gaming, social media or office productivity apps, online literature has an enormous audience in China: it had an estimated 455 million readers – over half of the country’s 900 million netizens – as of June 2020, according to the China Internet Network Information Center. Chinese research firm iiMedia projects that the online literature sector will surpass 20 billion yuan (US$2.8 billion) in value this year.
The coronavirus pandemic has seen a rise in online reading activities, along with other internet-based services such as mobile games, work conferencing and online health services.
A report by the China Audio-video and Digital Publishing Association in April showed that 70 per cent of users spent more time reading online this Lunar New Year holiday, while China Literature’s then co-chief executive Xiaodong Liang said in a March earnings call that the pandemic has had “some positive impact” on the business and that it had seen a rise in both time spent and books read by users on the platform in the first three months of the year, compared with the same period last year, as more people stayed home.
Chinese are reading more online – regardless of the coronavirus pandemic
Tencent, whose WeChat and QQ messaging apps had 1.2 billion and 693 million monthly active users respectively as of the end of March 2020, has leveraged its massive social media empire to distribute content from China Literature.
But ByteDance is no lightweight: the company said its apps, including TikTok, Douyin and its popular news aggregator Jinri Toutiao, had a combined 1.5 billion monthly active users as of June last year.
Tencent and China Literature did not immediately respond to separate requests for comment on ByteDance’s latest move into the web novel space.
“The advantage [of ByteDance] in e-books is the huge traffic” on its apps, according to Ge Jia, an independent internet analyst who has followed the industry for more than two decades.

This is not the tech powerhouse’s first foray into online reading either. Last year, it launched its own e-book app, Tomato Novel, which has attracted more than 10 million daily active users. Content from the app can be accessed via Jinri Toutiao, while Douyin actively advertises it.
Unlike many other online businesses in China that provide free content to lure users, China Literature has cultivated a stable group of paying readers for its web novels, even before its 2015 purchase by Tencent.
“But the industry is going to reach its ceiling soon, given the user scale compared with the entire internet user base,” Ge said. “So companies are again publishing free e-books to stimulate the market.”
In April, ByteDance took down Tomato Novel’s paywall and started offering the web novels on the app to readers for free.
Other online reading platforms including Shuqi, owned by the Post’s parent company Alibaba Group Holding, and MiduReader, backed by Nasdaq-listed Qutoutiao, are also taking this approach.
“But it is the authors that have been sacrificed,” Ge said, adding that writers stand to lose a share of subscription income from platforms, although they will still earn money from copyright licence fees.



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A ByteDance subsidiary has become the third-largest shareholder of Beijing Dingtian Culture Entertainment, which runs multiple online reading platforms
The e-book sector is dominated by China Literature, backed by ByteDance rival Tencent Holdings



TikTok owner ByteDance has acquired a stake in Beijing Dingtian Culture Entertainment, which runs multiple online reading platforms competing with Tencent-backed market leader China Literature.


Online literature: the next battleground for Chinese social media giants ByteDance and Tencent?

A ByteDance subsidiary has become the third-largest shareholder of Beijing Dingtian Culture Entertainment, which runs multiple online reading platforms The e-book sector is dominated by China Literature, backed by ByteDance rival Tencent Holdings

A ByteDance subsidiary has become the third-largest shareholder of Beijing Dingtian Culture Entertainment, which runs multiple online reading platforms

The e-book sector is dominated by China Literature, backed by ByteDance rival Tencent Holdings