Is TikTok Profitable 2024?

Curious to find out: is TikTok profitable? You have landed on the right page!

TikTok has a massive number of user base and following, and the app has been downloaded so many times, that you won’t believe the insane numbers.

All these positive facts about the company might make one think about the insane kind of money TikTok makes, but is all that shines really gold? Keep on reading to find out!

Is TikTok Profitable

TikTok Key Statistics

  • In China, TikTok is used by 750 million users daily.
  • In 2023, TikTok had 1.5 billion monthly active users, and this is expected to reach 1.8 billion by the end of 2024.
  • TikTok has been downloaded 4 billion times.
  • In 2023, TikTok generated $14.3 billion in revenue, showing a 52% increase year-on-year.

Overview of TikTok

Founded September 2016 (China); September 2017 (International)
Parent Company ByteDance
HQBeijing, China
People Liang Rubo (ByteDance CEO), Vanessa Pappas (TikTok COO), Shouzi Chew (TikTok CEO)
Industry Social networking
Type of Business Private, subsidiary

TikTok’s Business Model

TikTok's Business Model

TikTok, which is known as Douyin in its home market, was first launched in Beijing, China in September 2016.

However, after the initial success of the company, TikTok’s parent company, ByteDance, launched it internationally in the following year.

TikTok was initially just a short-form video-sharing platform used to share dance and lip-sync videos. However, today, it has become a fully-fledged video service where people can find and view all kinds of video content.

The success of TikTok can be credited to ByteDance, which had experience in running widely successful apps.

Zhang Yiming, the founder and CEO of ByteDance, integrated an AI platform into TikTok that was able to identify the interests of viewers and show them relevant content.

Although many Chinese apps, such as WeChat, have failed to expand internationally, TikTok expanded internationally by acquiring Musical.ly for $1 billion in 2017.

This acquisition added 80 million users to TikTok’s user base. From here on, TikTok snowballed into being one of the most successful apps.

It was downloaded 693 million times in 2019 and 850 million times in 2020. It was also the 7th most downloadable app of the 2010s.

Having said that, TikTok has had its fair share of controversies. In 2019, India and Pakistan banned TikTok in their countries for “morality issues,” which was rescinded later. But in June 2020, India banned TikTok again due to war tension between China and India.

But in spite of being banned in India and Snapchat launching clones of TikTok, it still remains the fastest-growing app in the world.


TikTok’s Revenue

In the past few years, TikTok has rapidly increased its revenue, making $14.3 billion annual revenue in 2023 which shows an increase of 52% year-on-year.


Is TikTok Profitable 2024?

TikTok's profit

ByteDance, the parent company of TikTok, made a $6 billion profit in the 2023 Q1, which is a massive change compared to 2021 when the company made a loss of $7 billion.

In the year 2022, the company’s revenue also rose by 38% to $85 billion as compared to the revenue of $58 billion in 2021.

It is impressive to see that the company has been able to scale its revenue from $34 billion to $85 billion in just two years.

What’s more is that the Parent Company of TikTok, ByteDance, has been able to increase its net worth to $300 billion in 2022, making it one of the most valuable privately owned companies in the world.


How Does TikTok Make Money?

The primary source of revenue for TikTok is advertisements. TikTok has become one of the most sought-after spaces for companies to reach a wider audience via both advertisement and sponsored content.

Here are the advertisement format and different sources using which TikTok makes money:

1. Hashtag Challenges

Hashtag Challenges are quite popular on TikTok, and this involves creating content on specific hashtags. Brands sponsor these challenges to promote a campaign or their products.

This kind of ad can include branded effects, banners, logos, etc., and is targeted towards driving brand engagement and user-generated content.

2. In-Feed Ads

In-Feed ads, as the name suggests, appear within a user’s TikTok feed. This ad can be in the form of a short video, banner, etc.

Advertisers pay money to TikTok based on clicks or impressions they receive on the ad, and the rates for this can vary depending on the campaign duration, ad placement, etc.

3. Branded Effects

Advertisers can use branded effects features to create filters, lenses, stickers or any other augmented reality feature to promote a product or service.

Users can use these effects on their videos and ehance the visibility of a brand.

4. Brand Takeovers

Brand Takeovers are simply full-screen ads that you may have seen when you open TikTok. Such ads usually last for a few seconds and include either a short video, GIF, images, etc.

Brand takeovers help increase visibility and even offer single and exclusive advertisers per day, ensuring maximum impact on the target audience.

5. Influencer Partnerships

This is the most common type of advertisement method. Different brands often collaborate with different kinds of influencers based on their product niche.

This can include creating different kinds of challenges, product endorsement videos, sponsored videos, etc., to drive sales.


TikTok Users

In 2023, TikTok’s user count reached 1.5 billion, a 16% increase compared to the previous year.

TikTok annual users

Wrap Up

TikTok has had its fair share of ups and downs, but it is one of the most successful platforms to have originated in China.

Users are crazy about the app and keep on making new content, videos, and lip-sync videos every day. Not only this but because of the large number of users available on the platform, TikTok is also the biggest sought-after place for companies to advertise themselves.

We hope you found this article on: Is TikTok profitable helpful?


FAQ’s

What is TikTok's valuation?

In 2023, the brand value of TikTok was 84 billion U.S. dollars. With a market cap of 200 billion U.S. dollars, it is also the most valuable unicorn worldwide.

In which countries is TikTok most popular?

Outside of China, TikTok is most popular in US, Brazil and Indonesia.

Is TikTok losing its popularity?

No, on the contrary, the annual users of TikTok reached 1.5 billion in 2023. And it has even become one of the most used social media platforms in the world.

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