The recent news about the impending U.S. ban on TikTok unless it sells to another entity (preferably American), caught my interest. Not that I’m capable of buying it but I just wanted to know how much is TikTok worth!
If, like me, you too are curious about TikTok’s worth then read on.
How Much Is TikTok Worth – Revenue & Valuation
| Date of Launch | Sept 2016 (China); Sept 2017 (International) |
| HQ | Beijing, China |
| Parent Company | ByteDance |
| Net Worth | $75 billion |
| Business Type | Private Company |
The valuation of a company refers to the process of determining its worth. According to Statista, we’ve come to know that the brand value of TikTok/Douyin amounted to 84 billion U.S. dollars in 2023. However, we also got an interesting information that the annual revenue of TikTok in the U.S. was $16 billion in the same year.
These huge numbers prove to us that they’re a direct result of TikTok’s immense popularity with Gen Z. I also read that America had the largest TikTok subscriber base in the world with 150 million users. Of this, almost 45% belong to Gen Z.
TikTok is owned by the private Chinese company ByteDance. And we’ve all seen how there have been concerns over the app collecting US user data. That’s why the Biden government has moved the Congress for a ban.
Owing to this forced sale, the true valuation of the company could plummet as we read in an article in the Financial Times. Companies like Oracle and Microsoft are interested in acquiring TikTok.
Recently, TikTok has sued the US Government on grounds that the pending ban violated the First Amendment. Its time to witness the new tug-of-war between the popular social media app and politics!
How Does TikTok Generate Its Revenue
We all know that TikTok influencers are earning through their brand partnerships and video content posted on the platform. But I always wondered how TikTok generates its revenue.
Well, the answer to this is advertising and in-app purchases!
Advertising
The majority of TikTok revenue comes from the ads and affiliate marketing offers that brands promote on the platform. In 2022, the company earned $9.9 billion in annual revenue from advertising. This amount is expected to reach 28% by 2025.
Brands can select from the following types of advertising options:
· In-Feed Video Ads: The ads that pop up on our screens between videos.
· Brand Takeover Ads: The ads that are visible as soon as we open our TikTok account.
· Top View Ads: These are the ads we see at the top of our For You Feed.
· Brand Hashtag Challenges: Ads where we see brands creating their own hashtag and encouraging users to feature them in their videos.
· Branded Effects: Sponsored posts that use AI filters in the videos.
The cost of these ads can be anywhere between $50000 to $150,000 depending on the frequency and type of ad selected. Our research pointed out that Brand Hashtag Challenges are usually the costliest.
In-app Purchases
When it comes to in-app purchases, TikTok is the undisputed leader. You’ll be surprised to know that the app made $189 million in 2023 through purchases by users (virtual gifts etc.,). This puts it way ahead of Tinder, Disney, and YouTube and any other popular app known to you.
The in-app purchases include sending live gifts to influencers during TikTok Live.
I’ve made many such purchases using TikTok coins, which is the virtual currency on the platform. You can purchase coins in bundles ranging from 100 to 10,000. You can even spend them on TikTok Shop too.
Creator Commissions
Another small yet significant portion of TikTok’s earnings comes from creator commissions.
Whenever an influencer withdraws their TikTok pay, TikTok charges a 50% commission on every dollar withdrawn and credits the remaining real money.
Influencers earn through participating in the Creativity Program, TikTok Live Gifts, and influencer marketing.
Biggest TikTok Creators and Their Following
We all have our favorite influencers on TikTok. Let’s see if your favorites are on the list of the 5 biggest creators on TikTok in 2024!
#1 Khaby Lame
Khaby Lame unseated TikTok’s ruling stars like Addison Rae and Charli D’Amelio real quick! This Italian TikToker has over 161.8 million TikTok followers and earns handsomely from the TikTok Creator Fund.
I still recall the viral TikTok video in which he responds to someone’s style of banana peeling!
#2 Charli D’Amelio
Charlie Damelio (younger sister of Dixie Damelio) has retained her position in the top 5 for a long time now! She has an impressive 155.7 million followers on social media who love her dance and choreography live stream.
She has even appeared in a Super Bowl commercial and in Hudson’s music video America’s Sweethearts.
#3 MrBeast
Jimmy ‘MrBeast’ Donaldson is extremely popular on TikTok for his innovative versions of challenges and concepts. He has 105.2 million subscribers and I’m sure you’re one of them!
I found his Squid Game recreation particularly fascinating.
#4 Bella Poarch
Bella Poarch is an American-Filipino star with a following of 93.9 million on the platform. What makes her follower count more impressive is that she began her TikTok journey in 2020!
Her music videos like ‘Build a Bitch’, ‘Inferno’ etc., are quite a crowd puller.
#5 Addison Rae
Although Rae still has 88.8 million followers, this number has dropped since 2023. She is insanely famous on the platform and my young niece ardently follows her choreography videos.
Rae even starred in an episode of ‘Keeping Up With The Kardashians’ and has a multi-movie deal with Netflix!
You can even check out some others like Zach King (82.1M), Kris Collins (50.6M), and Josh Richards (25.8M) who are the rising stars on the app.
TikTok User Base And Other Statistics
When I was researching the TikTok net worth, I came across some very interesting statistics and facts about the app. Some of them were quite incredible and worth sharing, so here goes:
· TikTok is expected to reach 2 billion users by the end of 2024.
· Consumers spent close to $6 billion on TikTok in Q4 2022.
· In 2023, TikTok’s ad revenues increased by 55% from the previous year.
· TikTok’s parent company, ByteDance, is estimated to be worth $275 billion.
· Android users spend an average of 95 minutes on the app each day.
· There are over 100 TikTok Gifts available on the platform
· In the UK, TikTok was fined £13 million in 2023 for violating user’s privacy.
· Brands that are marketing their products on TikTok can reach approximately 13.6% of the world’s population.
· It’s the #1 downloaded app in more than 40 countries.
· TikTok is available in 50+ languages.
· In Egypt users have to be 21+ years to subscribe to TikTok.
· To date, TikTok has more than 4.1 billion downloads on Google Play Store and Apple Store.
· In 2023, TikTok was the 6th most-used social networking app worldwide.
Brief History Of TikTok
What if I told you TikTok existed before 2017? That’s right, TikTok is actually based on a hugely popular Chinese app called Douyin launched in 2016.
Douyin was created by the internet company ByteDance which wanted to offer an entertainment social media platform to the people. Within a year Douyin had more than 100 million users.
Seeing its immense popularity, ByteDance decided to go international. And thus, TikTok was born in September 2017.
Remember Musical.ly? The app where we created lip sync videos? It was purchased by ByteDance in November 2017 and merged with TikTok.
This created a large community of users whose interests lay in creating and sharing short video content.
Since then, there has been no looking back for TikTok as it gained global fame. People of all age groups, especially teens found a creative outlet in TikTok. While Instagram and Facebook were still popular, their purpose was more to stay connected than to make videos.
It’s only later that YTShorts, Instagram Reels, Facebook videos, etc., were launched on social media. In fact, these features were launched to face the immense competition that these apps faced from TikTok.
Who Owns TikTok And How Much Are They Worth?
As I’ve mentioned above, ByteDance is the parent company of TikTok. It was founded in 2012 by Zhang Yiming and Liang Rubo. Today ByteDance has many international offices and employs 110,000 people globally.
ByteDance also owns a number of other platforms like Helo, Vigo Video, Jinri Toutiao, etc.
According to Forbes, Zhang’s net worth is estimated at US$40.2 billion. He stepped down as CEO in 2021. As of 2024, he is the richest person in China.
Liang Rubo, on the other hand, is the chairman of the board of ByteDance. He has a net worth of $2.1 billion.
The current CEO of TikTok is Shou Zi Chew. At a recent Congressional hearing he revealed that 60% of ByteDance is owned by investors such as the Carlyle Group, General Atlantic and Susquehanna International Group.
Of the remaining 40%, 20% is owned by Zhang and the remaining by employees.
Conclusion
TikTok has a loyal subscriber base of both content creators and viewers. I find myself opening the app at least twice a day to de-stress and get some laughs.
For the subscribers like us, TikTok is priceless! However, it remains to be seen if our favorite app survives the privacy violation allegations and continues its successful run in the US.
