Douyin's rise to the top and Apple's aggressive expansion: ByteDance's traffic business and the next challenge.

TikTok has ascended to the throne of the mobile internet market.

According to Nomura's latest research report, citing QuestMobile data, Douyin's total usage time will surpass WeChat's for the first time in July 2026.

ByteDance's share of time spent on the top 50 apps in China also rose from 33.6% in the same period last year to 40.9%; Tencent's share fell to 29.1%, widening the gap between the two to 11.8 percentage points.

This is not simply a matter of "TikTok defeating WeChat".

In terms of user reach, WeChat still has 931 million daily active users, higher than Douyin's 714 million.

Douyin's overtaking of WeChat is attributed to both a 19% year-on-year increase in daily active users and an 8% increase in average daily usage time per active user. While WeChat remains the most widely covered digital infrastructure, Douyin is emerging as the largest gateway to attention.

This data is ultimately based on a broader context: existing resources have reached a bottleneck.

With fewer and fewer new users, competition among platforms is gradually shifting from "who has more users" to "who can get more time".

ByteDance's victory in this competition no longer relies solely on Douyin. Products such as Hongguo Short Drama, Tomato Novels, Chili Music, and Doubao are accommodating users' content consumption in various scenarios.

The emergence of generative AI has added new supply capacity to this system.

But the impact of AI may not be limited to this: on the one hand, it makes content easier to produce, strengthening ByteDance's expertise in recommendation and advertising models;

On the other hand, it may also help users find, filter, and make decisions, so that "more usage time" is no longer the only criterion for measuring the value of the platform.

Red fruit is fierce

In less than a year, Hongguo has drawn a growth curve that is hard to ignore.

In July 2026, Hongguo Short Drama's daily active users (DAU) reached 168 million, a year-on-year increase of 107%, which has exceeded the simple sum of the daily active users of iQiyi, Youku, Mango TV, and Tencent Video.

Launched approximately three years ago, Hongguo has become the fourth most used mobile internet app in China, after Douyin, WeChat, and Douyin Lite. In July 2026, its usage share reached approximately 5%, surpassing Kuaishou's 3.9%.

While rapidly expanding its user base, Hongguo has captured a significant amount of fragmented attention.

According to QuestMobile data, in February 2026, the average daily usage time per user on Hongguo reached 125 minutes, which is roughly equivalent to watching a complete movie every day.

No matter how much modern people complain about their time being fragmented by work, it doesn't stop them from investing a lot of fragmented entertainment time in short, intense, and fast-paced plots.

Hongguo is not just expanding the short drama format, but a proven free business model within the ByteDance ecosystem.

Previously, most mainstream mini-program short dramas adopted an episode-by-episode unlocking and pay-to-watch model. After watching the free parts, users had to make continuous payment decisions; the production companies' profits also heavily relied on traffic acquisition and user purchases.

Hongguo, on the other hand, reversed this logic: users can watch the entire series for free, the platform improves matching efficiency through algorithms, and then supports content supply with advertising revenue and a revenue-sharing system.

In other words, first lower the decision-making threshold for content consumption, and then achieve commercial monetization through a sufficiently large user base and usage time.

In 2025, DataEye estimated that the Chinese free short drama market reached 53.3 billion yuan, a year-on-year increase of 113%, accounting for about two-thirds of the live-action short drama market.

With the support of Douyin's traffic, Hongguo has captured nearly 90% of the monthly active user share in the independent short drama app channel, forming a clear leading position.

With users and distribution channels in place, the emergence of AI has accelerated this model.

For free platforms, the key is to continuously provide low-cost, high-frequency content to capture user time. Compared to traditional film and television, AI-generated animation has a shorter production cycle and faster replication speed, significantly reducing trial-and-error costs.

Hongguo was one of the earliest platforms to proactively drive this supply.

At the beginning of this year, Douyin Group's Short Drama Copyright Center launched a new incentive mechanism for AI-simulated human dramas, providing a minimum guarantee of 20,000 to 80,000 yuan based on different tiers, and uniformly enjoying a 20% permanent share of the revenue.

The combination of "low cost + platform guarantee" has rapidly boosted production capacity on the supply side.

However, while production capacity has expanded, the divergence is also very obvious. Among the 47,000 new AI dramas and comics released in March, 99.28% of the works saw a monthly increase of less than 30 million views, and only 0.11% exceeded 100 million views.

After the rapid influx of supply, the platform's strategy shifted from "pushing supply" to "screening".

In May, news circulated in the industry that newly approved AI-generated scripts would no longer offer a minimum guarantee. Redfruit later clarified that this was not a "complete cancellation," but explicitly stated that the minimum guarantee policy would only be retained for a selection of high-quality scripts.

An AI drama production professional told Wall Street Insights·All-Weather Technology that the average daily usage time per user of Red Fruit is still increasing, possibly because "the dramas are getting longer and longer."

“At the beginning of the year, it was very difficult to produce 60 episodes, but now, once we find an IP, we can easily extend it to hundreds or even thousands of episodes.” The aforementioned industry insider said that in the past, production companies worried that the updates could not keep up with the viewers’ viewing habits, but now “the update speed is faster than the viewers’ viewing speed.”

As content production itself becomes cheaper and quantity is no longer scarce, what is truly scarce is user attention and the ability to determine the efficiency of content distribution.

The growth of Hongguo is a concrete manifestation of ByteDance's traffic and algorithm capabilities in the short drama field. As the industry enters a stage of refined operation, this competition for time will naturally extend to the entire ByteDance system.

Traffic City

The rapid rise of Redfruit is not the first time ByteDance has successfully replicated the free model.

The premise that this strategy can be effective time and again is that ByteDance has already built an extremely large city of attention in China's mobile internet.

In July 2026, Douyin's total usage time surpassed WeChat for the first time, with a time share of 19.4%; ByteDance's products further increased their total time share among the Top 50 Apps to 40.9%.

In a saturated market where user growth is nearing its ceiling, this massive traffic base means that derivative products within the matrix can gain exposure, recommendations, and cold start at extremely low cost.

According to QuestMobile data, in June 2026, Soft Music's monthly active users reached approximately 167 million, a year-on-year increase of 68.7%; in July, daily active users still increased by approximately 70% year-on-year.

Against the backdrop of slowing or even declining growth on established platforms such as QQ Music and Kugou, soft drinks have become another high-growth entry point for ByteDance to acquire users against the trend.

It naturally caters to the overflowing music consumption demand from Douyin: users first encounter song snippets in short videos, and are then guided to listen to the full song.

After traffic entered the soft drink market, it didn't stop at a single shift in attention. In addition to traditional advertising and memberships, ByteDance is extending its music ecosystem to distribution, copyright, promotion, and revenue sharing.

In June 2026, "Miaoxiang," the AI music creation and distribution platform under Soda Music, was launched with a revamp. Once a work is completed, it can be directly entered into Soda Music's distribution and dissemination chain.

This means that the attention accumulated by Douyin is no longer just advertising resources sold in a one-time transaction, which reduces the cost for soft drinks to acquire users; and the growing soft drinks have evolved into a new consumption portal, undertaking multiple commercial values such as membership, copyright, distribution and promotion.

If Soda Music expands the scene, Tomato Novels demonstrates the vertical, tiered reuse of content assets.

In July 2026, Tomato Novel had approximately 144 million daily active users, a year-on-year increase of 6%, although the growth rate slowed down. However, the average daily usage time per user increased by 8% year-on-year.

Although new content formats such as AI-generated comics have diverted some time from pure text reading, the strategic value of Tomato as an "upstream IP reservoir" for ByteDance has actually increased.

Since the beginning of this year, Tomato has continued to expand its copyright access.

In March, Douyin Group's Short Drama Copyright Center launched a comic book IP adaptation library, opening up more than 500,000 original IPs by Tomato to its partners.

In May, Tomato began promoting the theatrical release of AI-generated animation and planned to open up adaptation rights for top IPs; in June, it further launched a long-term call for theatrical films.

Stories that have already been validated in the text market are thus naturally transformed into short dramas, AI comics, and even movies—watched continuously by Hongguo and then amplified and disseminated a second time through Douyin.

The pressure of traffic diversion for individual apps is transformed into the tiered release of IP assets within the ByteDance ecosystem.

However, this kind of fortress built on content and traffic scale is essentially still a deep exploitation of supply-side efficiency and existing time. With mobile internet penetration reaching its peak, even a giant like ByteDance is devouring the existing market share.

When AI begins to change the form and distribution logic of products, the key to winning the competition may no longer be determined by time or the absolute quantity of content.

Endgame

The growth of red fruit, tomatoes, and soda is all based on the same logic: attract more users with more content, and the longer they stay, the more advertising inventory the platform can sell.

From Toutiao to Douyin, ByteDance's most successful business models have essentially been about the efficient organization and monetization of attention. The explosion in content supply brought about by AI has further amplified this advantage in the short term.

However, AI's reshaping of the internet ecosystem goes far beyond the content supply side.

This leads to a fundamental divergence in the underlying logic between content products and AI assistants: content products need to constantly provide new consumer objects and try every means to retain users; while excellent AI assistants pursue completing tasks in a shorter time.

The commercial value of a user getting a reliable answer and completing an order in 30 seconds may be far greater than browsing 30 minutes of general entertainment content.

As AI begins to make decisions for users, the platform's evaluation metrics are also expanding from daily active users and usage time to task completion volume, transaction conversion rate, payment rate, fulfillment reliability, and the range of decisions that users are willing to entrust to AI.

In July 2026, Doubao's daily active users reached 168 million, approximately 4.6 times that of the same period last year. For pure consumer AI products, it is not easy to cover model usage costs in the long run by relying solely on a free model.

Beyond subscriptions, channeling high-intent demand into e-commerce and lifestyle service transactions is becoming another commercialization path for ByteDance Testing.

Starting in March this year, Doubao began gray-scale testing of in-app direct ordering and payment; in April, "Doubao Helps You Choose" was launched, gradually covering product recommendations, price comparison, ordering and after-sales service, and was upgraded to a unified shopping portal during the "618" shopping festival.

In the local services sector, the monetization path is more direct. In August, hotel bookings generated through Doubao began to incur a separate channel service fee—the platform does not sell advertising space, nor does it offer paid priority ranking; instead, it charges commission based on actual transactions.

This shift from "selling advertising" to "facilitating transactions" has put ByteDance, Alibaba, and Tencent back on the same track.

The three companies started from different points and each represents a unique agent infrastructure:

This year, Alibaba has deeply integrated Qianwen with Taobao, Flash Sale, Fliggy, and Gaode Maps, connecting 4 billion product and service interfaces to a unified AI. The core is to leverage the vast product supply chain and fulfillment network to achieve a direct closed loop from "demand submission" to "payment fulfillment".

Tencent defines the WeChat ecosystem as the most suitable system for deploying agents, attempting to leverage its over 1.4 billion monthly active users and millions of mini-programs to directly transform its existing service ecosystem into "skills" that agents can invoke.

ByteDance's advantage lies in its massive attention portal and precise understanding of user intent, which allows it to direct traffic to its e-commerce and local services platforms.

The more abundant the supply of content users consume, the more time ByteDance can take away; however, when AI starts searching, comparing, and executing for users, the value comes from saving time.

This does not mean that duration has lost its meaning.

The massive user base and attention pool remain the largest upstream assets for promoting AI entry points and capturing user intent.

However, time is relegated from the ultimate business outcome to an upstream startup resource. Platforms not only need to own users' time, but also need to prove that they understand their intentions and can complete the actions on their behalf.

From this perspective, the 40.9% share of time is not only a triumph for ByteDance in the mobile internet attention era, but also the starting point for the next round of competition regarding "efficiency and decision-making power".

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