ByteDance’s China Chief Resigns After CEO Seeks Greater Urgency

(Bloomberg) — ByteDance Ltd.’s chief operating officer in China resigns, a week after CEO Liang Rubo said the company must avoid complacency and make up lost ground in the AI ​​race.

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Kelly Zhang is stepping down as CEO of Douyin Group, a ByteDance spokesperson said on Wednesday, confirming a previous Chinese media report. She took this position in 2020, sharing responsibilities with ByteDance China President Zhang Lidong. ByteDance will not seek to name a successor and Kelly Zhang will focus on video editing app CapCut, according to a person familiar with the matter, who asked not to be named because the projects are private.

Beijing-based ByteDance, owner of short video platforms TikTok and Douyin, needs to embrace a sense of crisis and avoid mediocrity, Liang told staff at a company-wide meeting in late January. He said he saw several organizational problems that needed to be resolved and lamented ByteDance's delay in the artificial intelligence race started by OpenAI's ChatGPT.

“AI technology will greatly disrupt content creation and even lead to new creative tools. We hope to actively explore, fully understand and seize opportunities,” Liang wrote in a memo to staff announcing Kelly Zhang’s move, reviewed by Bloomberg. He attributed the move primarily to business development needs and said Han Shangyou, who previously reported to Kelly Zhang, would continue to lead daily operations at Douyin and report to Zhang Lidong.

Read more: ByteDance CEO warns staff against mediocrity after slow AI start

Kelly Zhang joined ByteDance in 2014 and was one of the few prominent women to hold leadership positions among China's largest technology companies. In her role, she oversaw ByteDance's products and operations domestically, including Douyin and news aggregator Toutiao. Outside of China, the TikTok business is led by Singaporean Shou Chew, who was one of the social media CEOs questioned by US senators last week.

Kelly Zhang's departure leaves some uncertainty at the top of a platform she helped transform into an e-commerce and content force. Douyin began as a repository for short videos but quickly became a leader in online shopping and social media, creating the model for ByteDance's TikTok store overseas. The service now competes with Tencent Holdings Ltd's WeChat. in advertising, forcing the larger company to refocus on its own video initiatives and eroding Alibaba Group Holding Ltd.'s market share. in online shopping.

“Kelly Zhang's performance at Douyin speaks for itself and has led to impressive achievements, so it's definitely not a question of her abilities,” said Li Chengdong, director of Beijing-based think tank Haitun . “This should not have much impact since their activity is already institutionalized. Douyin is already an industry leader.

Long hailed as the world's most valuable startup, ByteDance now rivals Chinese internet pioneers like Tencent, with sales topping $110 billion last year. TikTok is also the first non-gaming app to generate over $10 billion in user spending over its lifetime.

“I am excited to work with CapCut team members to create our own dreams and grow in this era of AI to create a fantasy world,” Zhang wrote in a social media post. “I will continue to use this entrepreneurial mindset to work hard over the next 10 years in areas that I am passionate about.”

(Updated with CEO letter to staff and more details on ByteDance plans)

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