Short-form video platform TikTok has achieved a significant milestone, by becoming the first non-gaming app to reach $10 billion in user spending.
The social media platform is reported to have added more than $4 billion this year to achieve this milestone, with the year still running.
The majority of TikTok’s revenue reportedly comes from the US and China, as both countries have so far generated 30% of the platform’s revenue to date. Other major markets include Saudi Arabia, Germany, the United Kingdom, and Japan, which combined accounted for 13% of the app’s in-app purchase revenue.
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TikTok’s recent milestone, underscores the platform’s rapid growth and success, solidifying it as a dominant force to reckon with in the social media landscape.
The short-form video platform began the year 2023 with an impressive $6.2 billion in consumer spending already under its belt. Throughout the year, it added an additional $3.8 billion, marking a substantial 61% growth.
The majority of TikTok’s revenue is reported to come from in-app purchases of coins, a virtual currency that users can use to purchase gifts for content creators on the platform. These gifts can be cashed out as fiat currency, with TikTok retaining 50% of the payout. Reports reveal that consumers are spending over $11 million per day tipping their favorite creators.
The platform also generates revenue outside of in-app purchases, like via advertising and e-commerce with TikTok shop. Following TikTok’s recent milestone, the head of insights at Data.Ai, Lexi Sydow, said that the platform revenue will grow to $15 billion in 2024, as TikTokers are poised to spend 40 hours a week each month in the app by 2024.
Since its launch in 2017, TikTok has become a leading player among short-form video social apps, with over a billion global users. The app quickly became the darling of Gen Z, which saw a lot of them become addicted to it, due to several remarkable features.
Currently, the platform has become a rave amongst other social media platforms as more than 15% of teens admit that they are on TikTok almost constantly.
In 2019, the app’s downloads surpassed that of Instagram, Facebook, Twitter, and Snapchat. By January 2020, users in their teens accounted for 37.2% of TikTok’s active user accounts in the U.S.
One remarkable thing about the app is that anyone can easily become a creator, as users feeds aren’t just limited to their followers, unlike other social media apps.
Notably, the platform is also increasingly being used by brands and celebrities to promote their content and reach new audiences. It has become a hot spot for influencer marketing and user-generated content, both of which are significantly helping small businesses grow their brand awareness effortlessly.
TikTok’s meteoric rise continues to be driven by its innovative and interesting features which have seen it become a hotbed for content creators. The app has shown no sign of slowing down, as it continues to introduce more interesting features to keep users engaged.