This is the World's Highest Valued Startup
TikTok is a juggernaut. Until today it has been downloaded over 6 billion times becoming nothing short of a social media sensation and with no sign of its popularity slowing down any time soon. An astoundingly simple yet powerful concept, users of the viral video app can record and share short, 15-second videos of themselves doing anything from lip-syncing to popular songs to recording a comedic skit with friends and a host of other activities.
It all sounds like great fun, but its popularity with such a wide demographic has also caused businesses to start sitting up and taking notice too, moving swiftly to take advantage of its massive potential to build awareness for their brands.
"Astonishingly, it took just 200 days for the development team at ByteDance to create the MVP of the app."
The rise and rise of TikTok
The app was developed by Beijing-based unicorn ByteDance who launched in 2012 and quickly shot to fame as the world’s most valuable startup having been valued at up to $140B in 2020. Since its release in September 2016, TikTok (known as Douyin in its home market and now ByteDance’s flagship product) rapidly gained popularity across the world with DataReportal 2021 noting that as of January this year the platform boasts 689 million monthly active users (MAU) worldwide.
It is positioned comfortably at the top of the list of most downloaded free apps list on the iOS App Store and, alongside this, also ranks as one of Google Play's top trending apps worldwide with a combined total of 6 billion lifetime downloads across the App Store and Google Play as of December 2020 according to Sensor Tower.
The onset of the global Covid pandemic has only served to accelerate the app's success according to The New York Times. It succeeded in breaking all the records for an individual app in the first quarter of 2020 alone when new downloads totalled 315 million worldwide.
Revenue & Growth
Revenue from in-app purchases and subscriptions for the month of January 20201 totalled an astounding $128 million.
To date, ByteDance’s revenue model has been largely advertising and in-app purchases and it’s been massively successful. Revenue from in-app purchases and subscriptions for the month of January 20201 totalled an astounding $128 million. But it's advertising that makes up the bulk part of TikTok’s total revenue and its growth is taking the app market by storm.
According to Totem Media, with a hugely effective personalization algorithm, they have taken their advertising market share from 5% to 22% in the 2 years from 2017 to 2019. The business told Reuters that the number of advertisers running campaigns in the U.S. increased by 500% from the start of 2020 to the end.
TikTok currently offers several different advertising options enabling brands to expand their reach exponentially, namely: in-feed native content, hashtag challenges, brand takeovers, and branded lenses. TikTok’s market penetration among the 18-24 demographic rivals that of Facebook, Instagram, and Snapchat combined. However, with the app's users ranging from anywhere between 13 to 60, businesses and brands with that demographic as their target audience are quickly realising the need to be implementing TikTok into their marketing strategy. Users are reportedly now spending an average of 52 minutes per day on the app giving marketers an even bigger reason to get in on the act and use the platform to promote their products and services.
Do You Have an App Idea?
Astonishingly, it took just 200 days for the development team at ByteDance to create the MVP of the app. What’s more, according to a report by Business Insider, TikTok’s owner Zhang Yiming made over $12 billion in 2018 becoming the 12th richest man in China through TikTok alone.
Some may say that, in itself, is sufficient motivation to come up with an app idea. Any thoughts?