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Dec 20, 2023 827

TikTok becomes first non-game app to reach $10B in consumer spending

#Global

TikTok’s short-form video app is hitting a new milestone. The app, which reached 1 billion monthly active users in 2021, has now become the first non-game mobile app to generate $10 billion in consumer spending across the Apple App Store and Google Play combined, according to a new analysis by app intelligence provider data.ai.

TikTok Becomes First Non-Game App to Surpass $10 Billion in Consumer Spending

TikTok, the popular short-form video app, has achieved a groundbreaking milestone by becoming the first non-game mobile application to amass over $10 billion in consumer spending across the Apple App Store and Google Play combined. According to app intelligence provider data.ai, this achievement positions TikTok alongside top-grossing games like Candy Crush Saga, Honor of Kings, Monster Strike, and Clash of Clans.

The analysis reveals that TikTok commenced 2023 with over $6.2 billion in consumer spending, experiencing a 61% growth throughout the year, reaching a total of $10 billion. This figure surpasses the 2022 total by 15%, indicating the platform's sustained financial success. Notably, data.ai's report encompasses only TikTok's consumer spending on iOS and Google Play, excluding third-party Android app stores in China, suggesting the total consumer spending may be even higher.

TikTok's revenue primarily originates from in-app purchases of "coins," a virtual currency enabling users to buy gifts for content creators. These gifts serve as a form of compensation for creators and can be converted into fiat currency, with TikTok retaining 50% of the payout. A significant portion of TikTok's revenue comes from the purchase of 1,321 coins for $19.99, constituting a quarter of its total revenue. While the app generates additional revenue through advertising and e-commerce via TikTok shop, these aspects were not included in data.ai's analysis.

The majority of the in-app spending driving TikTok past the $10 billion milestone comes from U.S. consumers and iOS users in China, contributing around 30% each to the revenue or 60% combined. Other markets, including Saudi Arabia, Germany, the U.K., and Japan, collectively accounted for 13% of the app's in-app purchase revenue.

While other non-game apps like Tinder and YouTube generate billions, TikTok stands out as the leader with a substantial lead. The report predicts that TikTok is poised to reach the $15 billion milestone in 2024, positioning it as one of the highest-earning mobile apps. Lexi Sydow, Head of Insights at data.ai, highlights the app's impressive growth, with TikTok users anticipated to spend a monthly equivalent of a 40-hour work week by the end of 2024, reflecting a 22% increase from 2023.