TikTok breaks records as first non-game app to exceed US$10 Billion – plus plans for 2024 unveiled

• TikTok surpassed US$10 billion in 2023, a first for non-game apps – and is set for more success in 2024.
• With TikTok in the lead, the mobile app sector sees a surge in engagement and revenue, as reported in State of Mobile 2023.
• In 2023, TikTok overcame challenges and shaped global culture, leading in creative and community-driven content.

Apps in sectors such as gaming, retail, food/ride-hailing, fintech, travel, and telco are experiencing a surge in consumer time and transactions. Brands are recognizing the increasing importance of developing robust app insights and capabilities to capitalize on this growing user engagement.

The State of Mobile 2023 report by data.ai reveals that people in mobile-first markets spend an average of 5 hours daily on their mobiles. In 2022, the average amount of time spent across the top 10 markets reached 5 hours and 2 minutes, marking a 9% increase since 2020. Notably, users from Indonesia, Brazil, Saudi Arabia, Singapore, and South Korea exceeded 5 hours daily. The most significant growth over four years was observed in Saudi Arabia, Australia, and Singapore, with increases of 68%, 67%, and 62%, respectively.

TikTok’s revenue milestone

data.ai reports that TikTok, the widely popular short video app, has achieved over US$10 billion in gross revenue, a milestone for a non-game mobile app. This significant accomplishment includes nearly US$4 billion earned in one year, primarily from virtual coins used for gifting content creators on the platform.

In 2023, TikTok faced significant challenges, including efforts by its CEO, Chew Shou Zi, to safeguard the company from a potential US ban or forced sale. This issue was highlighted during a lengthy and tense four and a half hour congressional hearing.

Despite these challenges, 2023 on TikTok was characterized by viral trends and cultural impacts. Users engaged in activities ranging from experimenting with ‘girl dinners’ and cottage cheese recipes to discussing historical topics like the Roman Empire. The platform continued to be a hub for creativity and community, influencing culture and impacting lives globally.

2023 was a milestone year for TikTok. The app was the first to exceed US$1 billion in consumer spending in a single quarter (Q1). Starting the year with over US$6.2 billion in consumer spending, it added an impressive US$3.8 billion by the end of the year, marking a 61% growth since the beginning of 2023 and a 15% increase over 2022’s US$3.3 billion.

TikTok has now joined the elite group of mobile apps that have surpassed US$10 billion in gross revenue, becoming one of only five apps to achieve this feat – and the first non-game app to do so. It ranks among mobile giants such as Candy Crush Saga, Honor of Kings, Monster Strike, and Clash of Clans. As the year ends, its closest competitors, Tinder and YouTube, still lag by US$2 to US$3 billion.

A look at TikTok’s financial growth

In terms of revenue contribution, US consumers and iOS users in China are tied, each accounting for around 30% of TikTok’s total revenue, collectively making up 60%, or approximately US$6 billion. Following them, the top five markets contributing to the app’s revenue include Saudi Arabia, Germany, the United Kingdom, and Japan, accounting for around 13% of the revenue.

The primary source of TikTok’s revenue is its virtual currency, TikTok coins. Since the app doesn’t offer subscriptions, these coins, obtained through various one-time in-app purchases (IAPs), are used by users to buy virtual gifts for content creators. Creators can then exchange these gifts for virtual diamonds, which can be converted into real money. TikTok retains 50% of this revenue. In 2023, the most popular purchase was the 1,321 coin bundle for US$19.99, representing about a quarter of the app’s IAP income, according to data.ai Intelligence.

Looking ahead to 2024, data.ai forecasts even more significant revenue growth for TikTok, projecting consumer spending of US$15 billion, which would be 50% more than its current total. This anticipated increase is in addition to TikTok’s other revenue sources, including in-app advertising and the newly launched e-commerce feature, TikTok Shop, introduced in September of this year.

Lexi Sydow, head of insights at data.ai, predicts a bright future for TikTok, suggesting it may become the highest-earning mobile app ever by 2024, nearing the US$15 billion mark. Daily consumer spending on the app, primarily for tipping favorite content creators, exceeds US$11 million. This spending is expected to propel TikTok past even Candy Crush Saga, the most profitable mobile game. Sydow also anticipates that users will spend the equivalent of a 40-hour work week each month on TikTok by the end of 2024, a 22% increase from 2023.

What is TikTok aiming for in 2024?

In 2023, TikTok was a hub for practical tips, nostalgic music, and thriving small enterprises, with its community actively creating, connecting, and celebrating authentic content. The platform attracted an audience eager for new perspectives, communities, and stories, where brands played a pivotal role in shaping the year’s trends.

TikTok recently unveiled its TikTok What’s Next Report 2024, the fourth edition of its annual trend forecast. This report aims to equip marketers with crucial insights into the changing preferences and needs of the TikTok community, thereby influencing strategies for the forthcoming year.

For 2024, the TikTok community is set to adopt a mindset termed ‘Creative Bravery’, characterized by curiosity, imagination, vulnerability, and courage. Brands displaying Creative Bravery on TikTok are expected to establish stronger community connections. Achieving success on TikTok now involves embedding Creative Bravery into everyday practices and strategic planning. Brands that continually spark global curiosity, upend traditional storytelling norms, and build trust with their audience are predicted to see the most success.

This report centers on the most impactful and enduring trends, identified as ‘Trend Signals.’ These signals detect content patterns that indicate emerging behaviors and interests, providing vital information for long-term content strategies. The three categories of Trend Signals are curiosity piqued, storytelling unhinged, and bridging the trust gap.

• Curiosity piqued: TikTok users are exploring a broad range of topics, leading to novel discoveries and real-life actions. For instance, beauty brand Clinique capitalized on TikTok’s dynamic search capabilities in a comprehensive campaign, significantly increasing conversion and click-through rates.
• Storytelling unhinged: Storytelling on TikTok is transforming with non-traditional narrative structures and community-driven content. Using a mix of creative strategies, IGG’s launch of its game Viking Rise on TikTok successfully engaged millions of users, exemplifying this trend.
• Bridging the trust gap: Consumers seek more meaningful engagement with brands, beyond mere transactions, and seek brands that contribute to societal change and demonstrate transparency. Indonesian childcare brand Makuka’s collaboration with TikTok creators for its product launch illustrates this trend, leading to a notable boost in sales and brand recognition.

The landscape of mobile app usage is undergoing significant transformation across various sectors, with a notable surge in consumer engagement and transactional activity. TikTok, in particular, stands out for its exceptional growth, surpassing US$10 billion in gross revenue and marking a new era for non-gaming mobile apps.

Despite facing challenges and regulatory scrutiny in 2023, TikTok has remained a cultural force, driving trends and user engagement through its unique blend of content. This engagement is set to increase, with predictions for even more significant revenue growth in 2024, bolstered by diverse revenue streams, including in-app purchases and e-commerce integrations.

It feels like an age since calls to ban TikTok.

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