Hajra Naz
TikTok’s short-form video application has achieved a significant milestone by becoming the inaugural non-gaming mobile app to surpass $10 billion in consumer spending across both the Apple App Store and Google Play. This accomplishment follows the app’s achievement of reaching 1 billion monthly active users in 2021.
The analysis, conducted by app intelligence provider data.ai, reveals that TikTok joins the ranks of gaming apps in this financial milestone, such as Candy Crush Saga by King/Activision Blizzard, the leading earner exceeding $12 billion, along with Tencent’s Honor of Kings, XFLAG/Mixi’s Monster Strike, and Supercell’s Clash of Clans.
The report highlights that TikTok commenced 2023 with a consumer spending total exceeding $6.2 billion, experiencing an additional $3.8 billion throughout the year. This reflects a substantial 61% growth from the beginning of the year and a 15% increase compared to the total consumer spending in 2022, which amounted to $3.3 billion, according to data.ai.
It’s important to note that the report focuses solely on TikTok’s consumer spending on iOS and Google Play, excluding third-party Android app stores in China. Consequently, the overall consumer spending for TikTok could potentially be higher.
The bulk of the spending on TikTok is attributed to in-app purchases of “coins,” a virtual currency enabling users to buy gifts for creators on the platform. These gifts serve as a form of compensation for creators’ content and can be converted into fiat currency, with TikTok retaining 50% of the payout.
The most popular in-app purchase on the platform is a bundle of 1,321 coins priced at $19.99, contributing to a quarter of its total revenue. It’s worth noting that TikTok also generates revenue through avenues like advertising and e-commerce with TikTok Shop; however, these additional sources of income were not considered in data.ai’s analysis.
According to data.ai, the majority of the in-app spending propelling TikTok to the $10 billion milestone came from U.S. consumers and iOS users in China. Both of these markets individually contributed around 30% of the revenue, totaling 60% when combined. Other markets, including Saudi Arabia, Germany, the U.K., and Japan, collectively made up 13% of the app’s in-app purchase revenue.
While TikTok stands out as the sole non-gaming app to achieve the $10 billion mark, other non-gaming apps also generate substantial revenue, albeit trailing behind TikTok. Notably, Tinder and YouTube are the closest contenders, trailing TikTok by approximately $2 to $3 billion, as highlighted in the report.
Lexi Sydow, Head of Insights at data.ai, announced that TikTok is on the verge of becoming the highest-earning mobile app ever, projecting to approach the $15 billion milestone in 2024. She revealed that consumers are currently spending over $11 million per day to support their favorite content creators on the platform, surpassing the revenue generated by the world’s most lucrative mobile game, Candy Crush Saga. Sydow added that TikTokers are anticipated to spend a 40-hour work week each month on the app by the end of 2024, reflecting a 22% increase from the previous year.
The firm’s forecast predicts continued growth in TikTok’s revenue in 2024, with consumer spending reaching $15 billion.
