ByteDance completely divested its securities business.
On the afternoon of February 21, Hualin Securities issued an announcement that it had signed an agreement on the purchase of Dolphin Stock APP, ByteDance's securities business, and intended to accept Beijing Wenxing Online Technology Co., Ltd., the operating entity of Dolphin Stock APP. After the completion of this transaction, ByteDance will go offline and will no longer operate the Dolphin Stock APP and the corresponding securities business, and Hualin Securities will continue to serve the users of the APP.
As early as September 1, 2021, media such as "Late Post" revealed that ByteDance intends to sell its securities business, with an overall valuation of 500 million yuan to 1 billion yuan, and the company has communicated with CICC, CITIC, Fosun, Oriental Wealth and so on. At that time, ByteDance responded that the company was shrinking its financial-related business and had made it clear internally that it would no longer engage in securities business in the future.
Now, the announcement of Hualin Securities announces the end of the transaction. According to the announcement, hualin securities will acquire 100% of the equity of Wenxing Online held by Jiangsu Toutiao for 20 million yuan.
According to public information, Wenxing Online was founded in April 2017, with the Dolphin Stock APP as the platform, based on the headline machine learning model, quantified stock big data, providing users with stock quotes and data analysis, and tracking stock trends at any time.
However, Wenxing Online, which has been online for nearly five years, has not contributed much to Byte in terms of revenue. In 2021, Wenxing Online achieved revenue of about 28.508 million yuan and a net loss of 1.642 million yuan. In January 2022, Wenxing Online's revenue was 13,900 yuan, a net loss of 444,700 yuan, and its net assets as of the end of 2021 were -79.51 million yuan.
For the news that Hualin Securities was transferred to the above-mentioned assets of ByteDance, some investment bankers close to the regulatory level believe that this may be related to the continuous increase in the difficulty of large Internet platforms to engage in asset-heavy financial licensing business. Judging from the current trend, most of the progress of large Internet platforms in the licensed securities business has not been smooth, for example, the Yunfeng Securities proposed to be established by the Yunfeng Fund, which has a clear relationship with Alibaba, has always stopped at the list of securities companies established by the CSRC's Institutional Department.
ByteDance's sale of business can be seen as an active contraction in line with supervision.
Coincidentally, on the same day that the Dolphin APP sale announcement was released, some media reported that the four major online education businesses under ByteDance Education had been suspended, and that "GOGOKID", "You Shoot One", "Qingbei Small Class" and "Tangyuan English" had issued a suspension announcement.
In the context of financial and online education facing regulation, cutting off securities business and online education is not necessarily a bad thing for Byte, which has entered a contraction stage.
A
From ByteDance's layout of securities-related businesses to the complete divestiture today, it has been less than five years.
In 2017, ByteDance registered and established Beijing Wenxing Online Technology Co., Ltd. and launched its first financial product "sodium and magnesium stock". At the beginning of the launch of sodium magnesium stocks, through the diversion and publicity of today's headline APP, there were also good downloads. According to Qimai data, since May 2018, the download volume of Magnesium stocks has begun to increase, becoming the preferred APP for some investors.
The rapid success of NMG stock allowed Byte to see the prospects of the stock business. In 2019, The Magnesium stock was officially renamed Dolphin Stock. An employee of the original byte financial business revealed in an interview with Xinyan Finance that the naming form prefixed with dolphins was personally determined by Zhang Yiming, including the later financial information platform "Dolphin Wealth", as well as financial products such as "Dolphin Stock", a simulated stock speculation product.
In 2019, ByteDance began to lay out Hong Kong stocks and US stock related businesses, registered "Squirrel Securities" in Hong Kong and applied for relevant licenses from the Hong Kong Securities and Futures Commission, which can provide securities and futures trading, asset management and other services. Later, the company acquired Asia Pacific Securities, a local Hong Kong brokerage established in 1996, and renamed it Stellar Securities.
With ByteDance winning its first financial license in 2018, a financial network covering securities, insurance brokers, online small loans, third-party payments, and factoring has gradually taken shape.
However, byteDance's "splash" of obtaining a brokerage license in Hong Kong is not large, and it has little impact on the competition pattern in the mainland, and the development of Dolphin stocks is gradually going downhill. In ByteDance's huge business map, Dolphin stock first appeared in the public eye in April 2020, when the app was exposed to be able to open accounts and trade real, the official denied this, and then almost disappeared. At the time of the sale, the dolphin app had only 133,900 daily active users.
In fact, compared with the layout of other Internet giants on the brokerage license, ByteDance is not "vigorous" in this business. According to the data of Guosen Securities, Alibaba has laid out Yunfeng Financial, Huatai International, and Tencent has Futu Securities in the field of brokerage services.
Some people close to ByteDance analyzed that the current headlines do not have the intention of entering licensed institutions, retaining the securities business is relatively chicken ribs, and the Track of Internet Securities itself has been relatively crowded, ByteDance does not have an advantage, and the cost performance of abandoning the securities business is obviously higher.
B
Although it abandoned the securities business, ByteDance's layout in other financial businesses has not been affected.
On January 19, 2020, Douyin Payment was launched, which means that ByteDance's financial business has become a complete territory. Prior to this, Byte had obtained four financial licenses – insurance brokerage license (June 2018), securities investment advisory financial license (August 2019), online small loan license (July 2020), and payment license (September 2020).
Compared with the securities business with high professionalism, high threshold and low sense of existence, Byte focuses on the payment field that it is better at, which is a wiser choice. After the Spring Festival in 2021, ByteDance gave up its wealth management business and launched a consumer financial product "Jitter Staging", which is mainly used in the field of e-commerce. Subsequently, Byte successively registered trademarks such as "Douyin Payment", "Douyin Installment" and "Douyin Xiangfu" in the financial property management category.
In the past two years, Internet companies have paid more and more attention to payment business, and many leading Internet companies such as Meituan, Pinduoduo, ByteDance, Kuaishou, and Huawei have obtained payment licenses through equity acquisition and entered the payment business.
The most important reason for the layout of the payment business is that it is the infrastructure of the financial business and also facilitates the landing of the "cash cow" product. In today's headlines, Douyin and other traffic platforms, ByteDance has long embedded assured borrowing, DOU installment products.
The payment business has also become an important part of the internal circulation of Douyin e-commerce, providing a passport for the realization of Douyin's huge traffic. For Douyin, the lack of payment system on the one hand to bear the payment channel fees from Alipay, WeChat, on the other hand, it also makes its own e-commerce circulation always have a gap, the launch of Douyin payment, so that users have one more payment channel when consuming, further improving the infrastructure of Douyin e-commerce.
However, in the context of Ali, Tencent, and JD.com's three giants occupying the Internet financial highland in advance, it is not easy for ByteDance to break through in the financial business.
C
Not only the financial business, ButteDance has made adjustments in many businesses after entering 2021.
Affected by the policy, the education business that ByteDance once focused on has undergone a series of contraction processes such as layoffs and shutdowns in 2021. At present, the four major online education sectors of Byte Education have been completely suspended.
The game business that Byte is very optimistic about also ushered in an adjustment last year. Compared with ByteDance's high-priced acquisition of Mu Hitomi Technology and Youai Mutual Entertainment in the first half of last year, the days of Ohayoo, a casual game incubated internally, are not so good. In the second half of last year, The head of Ohayoo, Xu Peixiang, left his post, and then entered the adjustment stage.
Around the same time, The Paper reported that ByteDance's commercialization team was also making adjustments, and even the most profitable e-commerce business in Wenzhou's local direct sales center was cut.
At the end of last year, ByteDance issued an internal email saying it had decided to abolish the Talent Development Center department. With ByteDance's "de-fattening and thinning" in 2021, the layoff of the Human Development Center seems to be an inevitability. After entering 2022, ByteDance still continued the direction of "de-fattening and thinning", cutting off the entire war investment department in early January and closing the clothing independent station Dmonstudio in early February.
These either caused a huge sensation or a silent retreat, indicating that the full-scale expansion of ByteDance has switched to shrink mode. Under Liang Rubo, ByteDance changed the style of full-speed expansion in the past and gradually moved towards contraction.
Internally, most of the shrinking business has not been built in the field to which it belongs, and for ByteDance, which attaches importance to ROI, the disconnection in these businesses is conducive to the company pouring more resources into the business with advantages. On the other hand, Internet anti-monopoly has become the norm, and dominating the market is no longer the goal of giants.
Under the combined action of the internal and external environment, the byte that is moving towards contraction can beat faster.
Resources:
"Zhang Yiming moved the knife, what is ByteDance's intention to withdraw from the securities business?" , Cloud Hunting Network
"The overall sale of securities business, why did ByteDance break up at this time?" Zinc Finance
"Divesting the securities business, byte may be able to beat better?" BT Finance
"Divesting the securities business, byte may be able to beat better?" BT Finance
"ByteDance sells its securities business and completely withdraws from the field", LatePost
"Byte layout credit business "word letter", or benchmark sesame credit, WeChat payment score? Tech Planet