TikTok joins US$10 billion club as only non-video game app to reach the revenue milestone amid strong ByteDance growth
- TikTok is the only mobile app that is not a video game to pull that level of revenue, as parent ByteDance pulls back from gaming amid a slowing market
- The short video app primarily makes money based on tips and gifts sent to content creators, eschewing the subscription model popular with other services
The Chinese version of TikTok is testing paid videos again, but some users push back
For TikTok, which does not offer a subscription, revenue is driven primarily by TikTok Coins. Users purchase the coins to spend on virtual gifts sent to content creators. The app also relies on advertising and has been pushing into e-commerce, which could help the video service achieve greater growth next year, possibly reaching US$15 billion in revenue, data.ai predicted.
The company’s global e-commerce ambitions recently hit a speed bump in Southeast Asia when Indonesia banned online shopping on social media to protect the country’s micro, small and medium-sized enterprises. The move forced the platform operator to halt sales on TikTok Shop in the country.
ByteDance remains the world’s most valuable private company owing to the strong growth of TikTok and its Chinese version Douyin. The company’s revenue jumped 40 per cent year on year to US$29 billion in the second quarter, just US$3 billion less than Facebook owner Meta Platforms in the same period, The Information reported in November.
The company is also trimming non-essential business lines, with a major retreat from video gaming amid a stagnating domestic market.