A company logo of ByteDance Photo:VCG

TikTok's parent company ByteDance's founder Zhang Yiming will step down as CEO and transition to a new role by the end of 2021. Co-founder Liang Rubo, the current HR head will be the new CEO, according to an internal letter published on Wednesday.

According to Zhang, Liang has taken on numerous critical roles at ByteDance at different times, including head of research and development (R&D), Lark and Efficiency Engineering, and most recently, Human Resources and Management.

"Now, for the long-term development of the company, Zhang needs to get out of the daily management and focus on the work that is not urgent but important to the development of the company, so as to create more possibilities. Therefore, I will take over his responsibilities as CEO. It's a big challenge for me and there's a lot of pressure," said Liang in an internal letter on Thursday.

Zhang's stepdown after success opens up more room for younger talents and is positive to the continuous development of the enterprise, Liu Dingding an independent tech analyst told the Global Times on Thursday.

"Starting from Jack Ma, more and more CEOs in Chinese tech firms are stepping down to let more young people come up, a good trend for the long-term development of the tech industry," he said.

Zhang said that he will focus on long-term strategy, corporate culture and social responsibility after stepping down as CEO, and will work side by side with Liang over the next six months to ensure a smooth transition.

"I believe I can best challenge the limits of what the company can achieve over the next decade, and drive innovation, by drawing on my strengths of highly-focused learning, systematic thought, and a willingness to attempt new things," said Zhang to employees in the letter.

He noted that "innovation and success are rooted in years of exploring and imagining what is possible," citing examples of 18-year-old Tesla's first experiment with laptop batteries to power its vehicles and Apple, which started discussion of its software management tool in the 1970s.

Zhang said that ByteDance's success over the last nine years has been built upon its ability to innovate at just the right moment in the development of the industry, notably "applying machine learning to mobile and video products."

Zhou Xibing, a veteran analyst who closely follows TikTok, told the Global Times on Thursday that another reason for Zhang's resignation could have been that ByteDance needs a new leader to add fresh thinking and make decisions given its global expansion after the company was viewed as making key errors in the US and India under Zhang's leadership.

"It is common for the founder to retreat limited by bottleneck of self-knowledge and cognitive maps after enterprises develop into a certain scale. The founder's resign will give new people a chance to make breakthroughs," he said "In the case of ByteDance, it urgently need a CEO and talents who can tell stories in a Western narrative to carry on the internationalization," Zhou said.

Earlier, there were market expectations saying ByteDance would go for IPO, as ByteDance's short-video competitor Kuaishou officially landed on the Hong Kong stock market in February, with its market value once reached more than HK$1.6 trillion ($206 billion).

In response, ByteDance issued a statement on April 23, saying the company is not ready to go public and has no plans to go public at present after careful study.

The first generation of founder is often more technology-oriented which is not favored by the capital market. Zhang's step back could be forced by the capital as the company is preparing for listing. The market expansion needs more business-oriented professional person to guide the company," Zhou said.

It is expected that after Zhang leaves his role, he is likely to remain involved in key projects and strategy deployment related to the future of enterprises, Zhou said, just as Jack Ma focused on the development of Alibaba's logistics arm Cainiao after he stepped down as CEO of Alibaba.

Global Times