Short-form video phenomenon TikTok has achieved a groundbreaking milestone, becoming the first non-game app to surpass $10 billion in consumer spending. Projections by data.ai suggest that TikTok is on track to become the highest-grossing app in history by the end of the year. Randy Nelson, a spokesperson for data.ai, highlighted TikTok’s exceptional performance, noting that it entered 2023 with $6.2 billion in cumulative consumer spending and added $3.8 billion over the year.
Virtual gifts and tipping features are fuelling the revenue surge as users spent an impressive 32.5 hours per month on the app by October 2023, tripling the 11 hours logged in January 2020. TikTok’s success places it among a select group of apps with over $10 billion in revenue, alongside Candy Crush Saga, Honor of Kings, Monster Strike, and Clash of Clans.
TikTok’s unique “TikTok coins” system, allowing users to buy coins for virtual gifts, has been a driving force behind its meteoric rise. A popular $19.99 bundle, offering 1,321 coins, accounted for approximately 25% of all in-app purchase revenue.
Consumers are reportedly spending over $11 million per day tipping content creators on TikTok, propelling the platform past the lucrative Candy Crush Saga. TikTok’s e-commerce ambitions are also contributing to increased spending. With plans for a tenfold increase in its US e-commerce business, targeting $17.5 billion in gross merchandise value, TikTok is set to challenge giants like Amazon.com and other fast-growing players. The platform’s foray into e-commerce began with the TikTok Shop in December 2021, and it has since disclosed plans to invest billions in Southeast Asia, solidifying its status as an e-commerce powerhouse.
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