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.