After China’s tech company ByteDance introduced a paid subscription option for its flagship chatbot DouBao, it lost 6 million users within a month, according to data released by the global artificial intelligence market tracking agency Aicpb.com on Wednesday. Analysts suggest that Chinese consumers may not yet be ready for AI paid services, and ByteDance may have jumped the gun by commercializing too early, risking losing its competitive edge in the fiercely competitive consumer-grade AI market in China.
The decline of 6.1 million monthly active users (MAU) for DouBao in May, following the introduction of the paid subscription option, is a significant setback since its launch in 2023. Aicpb.com founder Li Bang expressed concern, stating that a 1.81% month-on-month decline in user volume is a worrying signal for ByteDance in the highly competitive Chinese market where user numbers dictate everything.
Li Bang told the South China Morning Post, “The era of free AI services in China is far from over, so commercializing DouBao may have been premature.” In early May, ByteDance updated DouBao’s iOS App Store page with new paid plans – the standard version at 68 yuan per month, the enhanced version at 200 yuan per month, and the professional version at 500 yuan per month.
Despite the drop in users, DouBao still maintains its position as the most popular AI mobile application in China with 330 million users. Meanwhile, Alibaba Group’s chatbot Qwen saw a surge of over 13 million MAU in May, reaching 234 million users. Qwen’s month-on-month user increase of 6.06% makes it one of the fastest-growing AI platforms in China.
Although the user difference between the two apps is significant and DouBao’s lead remains stable in the short term, Li Bang believes this trend indicates Qwen is gradually eroding ByteDance’s first-mover advantage. “In a situation where the cost of user migration remains low, whoever starts charging users first essentially hands over the initiative to competitors,” he added.
The decline in DouBao’s user numbers highlights the broader challenges facing Chinese tech giants. In the world’s largest internet market, Chinese consumers have been reluctant to pay for chatbot services. On the other hand, tech companies are facing increasing financial pressure. A Morgan Stanley analyst pointed out in a research report in early May that to meet the demand for high-end AI computing power, businesses need more funds to purchase chips and resources. China’s enterprises can no longer afford to provide completely free services, as this would make it increasingly difficult for them to sustain their operations.
ByteDance responded on social media on Wednesday, stating that while the paid “professional version” of DouBao is in development, the company has no plans to diminish the features of the existing free version, aiming to dispel online speculation about forcing users to pay for upgrades.