ByteDance's Doubao has emerged as a leading contender in China's competitive AI chatbot landscape. In December 2024, Doubao achieved an impressive 29% growth in downloads, reaching 9.9 million—the highest among all AI chatbot apps in the country, according to Bloomberg Intelligence (BI) analysts Robert Lea and Jasmine Lyu.
Doubao's success stems from ByteDance's commitment to innovation and user-centric development. Regular updates and enhanced functionalities, including improvements to its large language models (LLMs), have elevated Doubao's user experience. These strategic advancements have not only boosted its popularity but also enabled ByteDance to claim market share previously dominated by Baidu's Ernie Bot and other competitors.
The widespread adoption of Doubao illustrates the success of ByteDance's iterative development strategy. By consistently introducing features tailored to user needs—such as advanced conversational capabilities, nuanced context recognition, and seamless integration with ByteDance's entertainment ecosystem—Doubao has become a versatile solution for both everyday consumers and professional users.
Source: aicpb.com and BI, compiled by DIGITIMES, January 2025
Source: aicpb.com and BI, compiled by DIGITIMES, January 2025
Market dynamics shift as Ernie Bot struggles
As ByteDance's Doubao surged in popularity, Baidu's Ernie Bot faced a starkly opposite trend. Downloads for Ernie Bot dropped by 3% in December 2024, reaching just 611,619—a continuation of its decline since peaking at 1.5 million downloads in September 2023. While Baidu reported an impressive registered user base of 430 million as of November 2024, the significant gap between registered and active users signals a troubling decline in user engagement.
Launched in August 2023, Doubao has quickly emerged as a market leader, overtaking Ernie Bot in both downloads and active users on iOS. By April 2024, Doubao had amassed nearly 9 million downloads, compared to Ernie Bot's 8 million, and maintained over 4 million monthly active users, according to Benzinga.
Doubao's rapid growth is largely driven by its versatile features, such as text generation, data analysis, and multimedia content creation—capabilities that have struck a chord with Chinese users, as reported by the South China Morning Post.
Conversely, Baidu's Ernie Bot has struggled to sustain user interest. Despite being the first AI chatbot to launch in China, Ernie Bot has failed to build on its early lead. Its monetization efforts have also faltered—since its launch, Ernie Bot has generated less than US$500,000 in revenue from in-app purchases and subscriptions, according to Sensor Tower data and The Business Times.
Ernie Bot's struggle to retain its audience can be attributed to several factors:
1. Perceived stagnation: Unlike ByteDance's Doubao, Ernie Bot lacked meaningful updates or innovative features to keep users engaged.
2. Competition from new entrants: Newer players like ByteDance's Doubao and Moonshot AI's Kimi successfully filled gaps in Ernie Bot's offerings, enticing users with more advanced and appealing functionalities.
3. Limited differentiation: Baidu's rebranding initiatives and diversification attempts failed to establish a unique value proposition, leading to a gradual erosion of its market position.
Market fragmentation reshapes competitive landscape
China's fragmented AI chatbot market has further compounded challenges for incumbents like Baidu and Alibaba. The low barriers to entry in the sector have enabled newcomers like ByteDance and Moonshot AI to quickly gain traction. Moonshot AI's Kimi has maintained its position as the market leader for six consecutive months, while Doubao's 48% growth in website visits in December narrowed the gap between the two, according to BI.
This intense competition has left rivals scrambling to retain relevance. Alibaba's chatbot efforts have similarly struggled to gain significant market share. Without strong differentiation or a unique value proposition, Alibaba and Baidu find themselves losing users to rivals that offer more compelling products. Additionally, the prioritization of user growth over monetization has prevented these companies from leveraging pricing strategies to consolidate their position.
ByteDance's expanding AI footprint
The rapid ascent of Doubao underscores ByteDance's strategic focus on AI development and its ability to capture market share through user-centric innovations. Conversely, Baidu's Ernie Bot faces challenges in retaining user interest and achieving significant financial returns in a highly competitive and fragmented market.
ByteDance's success extends beyond chatbots into other generative AI applications. For example, its AI-powered homework assistant, Gauth, developed by ByteDance subsidiary GauthTech, ranked as the second-most downloaded education app in the US in April 2024, trailing only Duolingo, according to Tech in Asia.
ByteDance has outpaced legacy players like Baidu and Alibaba, both of which are struggling with declining user interest and shrinking market share. The fragmented market and low entry barriers give a clear advantage to nimble, innovation-driven companies over slower-moving incumbents.
Looking ahead, the key to success in China's AI chatbot market will lie in delivering differentiated functionality and maintaining consistent user engagement. Companies that can innovate rapidly while meeting evolving user expectations will be best positioned to dominate this ever-changing landscape.