A new report from the app analytics firm Data.ai reveals TikTok became the fifth app to cross the $10 billion consumer spending milestone. The firm noted that the ByteDance-owned social media app is the first and only non-gaming app to make it to the $10 billion club.
TikTok is sharing the stage with Candy Crush Saga ($12B), Honor of Kings ($11B), Monster Strike ($10.6B), and Clash of Clans ($10.2B). The social video app crunched $3.8 billion (year-to-date) in 2023, about 15% higher than in 2022 when the in-app purchases (IAP) amounted to $3.3B.
It"s interesting to note that it took 79 months for TikTok to reach its first $1 billion mark, while other gaming apps did it in 20 months or less. On the flip side, TikTok only took 22 months to go from $1 billion to $5 billion, and 15 months to jump from $5 billion to $10 billion, whereas, other apps moved at a slower pace.
Talking about other non-gaming apps, YouTube and Tinder are the ones following TikTok"s footsteps. Data.ai says both apps generated around $7.5 billion each in in-app purchases, trailing TikTok by between $2 to $3 billion.
China and the US have been money-making machines for TikTok, each generating about 30% in IAP revenue. The two markets comprise $6 billion (60%) of the app"s total consumer spend, followed by Saudi Arabia, Germany, United Kingdom, and Japan.
While TikTok doesn"t offer a premium access tier like Snapchat, one of the ways it makes money is through TikTok Coins. Users can buy 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 they can convert into fiat money after reaching a minimum threshold. TikTok usually keeps about 50% of the payout amount. Data.ai says TikTok"s $19.99 coin pack, which comes with 1,321 coins, was the most popular in-app purchase in 2023, enough that it accounted for about a quarter of the app"s IAP revenue. The analytics firm predicts that TikTok will reach $15 billion in consumer spending in 2024.
Speaking of gaming, TikTok"s owner is expected to lay off hundreds of workers in its gaming division. While the app was banned in Nepal last month, a US district court judge blocked the state of Montana"s attempt to ban access to TikTok.