on his phone

The Facebook-TikTok Face-Off

Instagram Reels Aims to Compete With TikTok

Instagram, owned by Facebook (FB) is rolling out a new service to compete with ByteDance Ltd.’s TikTok. The feature is called Reels—and similar to TikTok, it gives users a platform to record and share short videos with audio or music.

TikTok has 800 million active users across the globe, and the number of TikTok users in the US has grown 5.5 times in less than 18 months. TikTok has worked to draw users from Facebook and Instagram through massive ad campaigns on the respective platforms. Now, Facebook is fighting back. The company is paying TikTok users with millions of followers to create exclusive content for Reels.

How Does Reels Work?

Through Reels, users can share video clips on their Instagram Stories. They can also send videos to individuals, or add a new Reels tab on their Instagram profiles. Instagram has over 1 billion active users worldwide. It has been successful before in launching new features to compete with other platforms, like Instagram Stories, which mimicked some features of Snapchat (SNAP).

Reels will launch in the US in early August. It will also arrive in the UK, Japan, Mexico, and about 50 other countries next month. The platform has already made its debut in India, Germany, and France.

Zooming Out

Facebook’s move into TikTok’s territory comes at a tense moment in the relationship between the US (home of Facebook) and China (home of TikTok). Secretary of State Mike Pompeo has indicated that the Trump administration has concerns about TikTok’s ties to China, and might place limits on the platform in the US.

Several weeks ago, TikTok announced it would pull out of Hong Kong due to conflicts about a new national-security law in the city. Just last week, India banned TikTok because of escalating tensions with China due to a border dispute in the Himalayas. India accounted for about one-third of TikTok’s users before the ban. Instagram Reels took the opportunity to launch in India to fill the gap.

Some TikTok users and talent managers in the US are wary of these rising tensions. Many are eager to build their presence on Reels as a way to have insurance in case TikTok is banned or limited in the US.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit SoFi.com. Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.

TLS 1.2 Encrypted
Equal Housing Lender