TikTok has become the fifth app to pass the $10 billion consumer spending milestone, according to a new report from app analytics firm Data.ai. The company noted that the ByteDance-owned social media app was the first and only non-gaming app to make it into the $10 billion club.
TikTok is sharing the stage with candy crush saga ($12 billion), king’s honor ($11 billion), monster strike ($10.6 billion), and clash of clans ($10.2 billion). The social video app hit his $3.8 billion mark in 2023 (year-to-date), an increase of about 15% over 2022, when in-app purchases (IAPs) hit his $3.3 billion mark.
What’s interesting is that it took TikTok 79 months to reach its first billion dollar mark, while other gaming apps did it in less than 20 months. Conversely, TikTok took only 22 months to go from $1 billion to $5 billion and 15 months to jump from $5 billion to $10 billion, while other apps have been slower. The pace has changed.
When it comes to non-gaming apps, YouTube and Tinder are following in TikTok’s footsteps. Both apps generate about $7.5 billion each in in-app purchases, leaving TikTok with a $2-3 billion lead, according to Data.ai.
China and the US are money-making machines for TikTok, each generating about 30% of IAP revenue. These two markets account for $6 billion (60%) of total consumer spending on apps, followed by Saudi Arabia, Germany, the UK, and Japan.
Although TikTok doesn’t offer a premium access tier like Snapchat, one of the ways to make money is through TikTok Coins. Users can purchase this virtual currency and spend it on virtual gifts to support their favorite creators during live streams.
Creators earn diamonds based on the value of their gifts, which can be converted into fiat currency once a minimum threshold is reached. TikTok typically keeps around 50% of your payment amount. TikTok’s $19.99 coin pack, which comes with 1,321 coins, was the most popular in-app purchase in 2023, accounting for about a quarter of the app’s IAP revenue, according to Data.ai. Analytics firms predict that TikTok spending will reach $15 billion in 2024.
Speaking of games, the owner of TikTok is expected to lay off hundreds of employees in its gaming division. The app was banned in Nepal last month, but a U.S. district judge blocked an attempt by the state of Montana to ban access to TikTok.