ByteDance’s Hongguo Surpasses China’s Entire Long-Video Sector in Daily Users
TREE NEWS reports: In July 2026, a landmark shift occurred in China’s mobile video market. ByteDance’s standalone short-drama app Hongguo (Red Fruit) reached 168 million daily active users, a 107% year-over-year increase, exceeding the combined daily active users of iQIYI, Tencent Video, Youku, and Mango TV — roughly 155 million — according to Nomura’s China internet monthly tracking report and QuestMobile monitoring data. The metric measures users who open the app daily on mobile devices, pointing to where this shift is happening first: Hongguo is becoming a daily video entry point.
The change is occurring on two levels. On the user side, Hongguo packages episodic content into a short-video-like feed with free viewing and continuous recommendations, shifting users from “opening a platform for a specific show” to “opening the platform first, then finding a show.” On the supply side, ByteDance integrates IP, external production, generative tools, distribution, and settlement into a single system, allowing more works to enter the market in shorter cycles. The former explains the rapid rise in daily active users; the latter determines whether this growth can be sustained by continuous supply.
From “Finding Shows” to “Scrolling Shows”
Hongguo first captured the expanding user base of the short-drama market. QuestMobile data shows that in February 2026, the short-drama industry reached 718 million monthly active users, with Hongguo at 304 million. By May, deduplicated users across standalone apps and WeChat/Douyin mini-programs rose to 851 million. In June, Hongguo’s monthly active users climbed further to 368 million, up 73.7% year-over-year. Short dramas have evolved from an emerging category to mass entertainment, and Hongguo has consolidated demand scattered across mini-programs and information feeds into a single standalone app.
The free model changed the cost of user entry into storylines. A report from the China Netcasting Services Association shows that in 2024, the market share of IAA (In-App Advertising) free short dramas rose from 11% in January to 50% in October. Previously, mini-program paid short dramas often required top-ups at plot twists, with revenue depending on whether users paid for the next episode. Hongguo exchanges advertising for free viewing, with the platform caring more about how long users watch today and whether they return tomorrow. Check-ins, coins, and continuous viewing rewards revolve around this goal, turning single viewings into continuous usage.
Content Enters High-Turnover Mode
Once “scrolling shows” becomes routine, the platform’s key question shifts from content quantity to velocity. Turnover here isn’t just faster shooting — it’s compressing the time from IP entry, matching production companies, launch, obtaining playback and advertising revenue, and feeding results back into the next round of project approvals. Hongguo operates a cycle where batches of projects enter, exit, and are reordered simultaneously.
This cycle was already formed during the live-action short-drama phase. Hongguo acquires IP and scripts from channels like Tomato Novel, advancing projects through copyright procurement, customization, or co-production, with external companies handling casting, shooting, and post-production. The platform connects demand and capacity; production companies invest personnel and capital per project. Once a team completes shooting, it can take on the next project, and Hongguo continuously obtains new content without being limited by its own production scale.
In April 2026, Hongguo’s short-drama creation service platform merged with Douyin Group’s short-drama copyright center into the “Short Drama Creator Center,” shortening the time for projects to find resources. IP selection, submissions, production contracting, project matching, finished product operations, data review, and settlement entered a single entry point, with various creators and investors matching around demand. The platform thus controls broadcast traffic and the main interfaces from project approval to payment collection.
Market Implications
The divergence between Hongguo and long-video platforms is not merely content length but how content is produced, how users enter, and how platforms bear project risk. Financial data reveals the basic structure of the long-video model. iQIYI’s Q2 2026 total revenue was 6.29 billion yuan, with membership services revenue at 4.01 billion yuan, accounting for nearly 64%, while content costs were 3.82 billion yuan. Mango TV’s H1 internet video business revenue was 4.462 billion yuan, with membership, advertising, and carrier businesses at 1.933 billion, 1.684 billion, and 845 million yuan respectively. Hit works can drive subscriptions, brand advertising, copyright distribution, and IP derivatives, but failures also create concentrated cost pressure.
Hongguo adopts portfolio operations, with large numbers of works at varying costs entering the library, and a small number of high-performing contents contributing the majority of playback and advertising revenue. Individual project lifecycles can be short, but library updates cannot be interrupted; the platform improves overall hit rates through continuous feedback. As character design, storyboarding, samples, and comic-drama production costs decline, AI allows the platform to expand its testing pool and screen options faster.
Key Takeaways for Investors
- Long-video platform margins face structural pressure: The membership-driven model relies on scarce premium content, creating concentrated cost risk. If Hongguo’s ad-supported, high-turnover model continues to capture user time, long-video platforms may face slower membership growth and rising content cost ratios.
- Watch for strategic convergence: iQIYI is expanding micro-dramas, comic-drama revenue sharing, and AIGC content ecosystems; Youku is attracting horizontal short dramas through membership and advertising sharing; Mango TV is building AIGC tools and launching “Guoguo Theater” with Hongguo. Hongguo is also adding membership and long-video copyrights. Competition is shifting toward content efficiency and user value.
- The middle ground gets squeezed first: Productions with costs approaching long dramas but insufficient to attract members, and update frequencies close to traditional projects but unable to adapt to short-drama high-frequency distribution, will face the most pressure.
- AI lowers production barriers but raises the value of judgment: Story judgment, user distribution, and commercial recovery become scarcer. Investors should focus on companies with strong IP reserves, efficient distribution capabilities, and diversified monetization paths.
Hongguo’s 168 million daily active users validates that the high-turnover model can achieve large-scale users. The next round of measurement will shift to traffic quality — advertising density, content differentiation, and production company returns. The next phase of divergence between Hongguo and long-video platforms will revolve around these capabilities.
