Behind Zao is Momo, a large social-media company which owns Chinese dating app Tantan.
Bloomberg and The Guardian reported that after going viral, privacy concerns started to crop up from users who had seen a line in the app's terms and conditions which stipulated the app had "free, irrevocable, permanent, transferable, and relicense-able" to user-generated content.
The backlash promoted WeChat, China's popular chat service, to block Zao on its platform.
Bloomberg reports that Zao quickly updated its terms, saying "headshots" and "mini-videos" won't be used for anything other to improve the app, or anything else pre-approved by the user. The sudden backlash is reminiscent of the mistrust that surrounded FaceApp, a Russian app which used AI to apply various filters to users' faces to make them appear old or switch gender.
Zao also said in a statement, according to Bloomberg: "We understand the concern about privacy. We've received the feedback, and will fix the issues that we didn't take into consideration, which will need a bit of time."
Should Zao decide to make its app available more widely, it's likely Western users will still feel concern. China has used facial recognition technology to massively expand its surveillance network, and users will likely balk at handing over personal data to an overseas developer. Chinese selfie app Meitu likewise went viral in the West in 2017 for its beautification of photos, but was criticized for demanding access to excessive data like phone numbers and GPS co-ordinates.