With an estimated $ 100 billion worth this year, TikTok's parent company ByteDance cemented its status as the most valuable startup in private markets. The success outside of China has also become a source of envy and inspiration among local colleagues.
Now, the company's price tag is under tremendous pressure as it is about to lose its cheap asset, TikTok. Several investors announced theinformationsuperhighway.
ByteDance Last year it generated revenues of 120 billion yuan (US $ 17.2 billion), said a knowledgeable investor. Around 67% came from ads sold on the domestic apps Douyin, the Chinese version of TikTok, and the popular news aggregator Toutiao. Live streaming for users of Douyin and another app in the family accounted for about 17%. Emerging companies like games, e-commerce, and TikTok accounted for 20 billion yuan, or roughly another 17%.
The company forecast sales of 200 billion yuan ($ 28.7 billion) in 2020, with TikTok and other emerging companies contributing 30 billion yuan, or 15%, according to the investor. Earlier reports from Reuters and Bloomberg reported similar sales figures.
While TikTok continues to make up a fraction of ByteDance's income, the addressable market is enormous. "It went from a potential overseas market with 6 billion users to China, where Douyin and Toutiao are saturating," said the investor.
Additionally, TikTok has only just started monetizing its massive user base. The app grew exponentially, surpassing 2 billion downloads this year as COVID-19 locks kept people indoors. However, it is unclear how much eyeball time she will keep when social life returns to normal. The app has already lost its largest market in India, which according to the investor accounts for about a third of the user base, although app spending in the country is relatively low.
ByteDance did not respond to a request for a comment.
At home, the eight-year-old company faces a crowded market. Kuaishou, who was backed by Tencent, claimed that 300 million people were using its short video platform daily earlier this year, while Douyin said it hit 400 million DAU around the same time. Toutiao faces challengers from a variety of backgrounds, from microblogging veteran Weibo to WeChat's in-app messaging feature.
Like all other technology giants, ByteDance runs a number of projects alongside its cash cows. It is known for its ability to produce new products thanks to an organizational structure that breaks the company down by function, primarily technology (development), user growth, and monetization, earning it the nickname "App Factory".
The company's better-known gestures involve mobile games, a lucrative internet business in which it competes directly with Tencent. Education that could enable him to tackle the wave of online education in China; and business software, represented by the Lark collaborative work platform.
So far, none of these new endeavors come anywhere near the success of TikTok, Douyin, and Toutiao in user acquisition and monetization. It remains to be seen how the figurehead of globalization of Chinese apps tries to hold on to its supremacy. One thing is for sure: ByteDance founder and CEO Zhang Yiming won't shy away from its global ambitions even if it stumbles overseas.