TikTok, the short video platform, has witnessed an astonishing surge in user spending, rivaling popular mobile games. In 2021, the app achieved a significant milestone by reaching 1 billion monthly active users, distinguishing itself as the first non-game mobile app to amass around $10 billion in user spending across the Apple App Store and Google Play combined.
A Competitive Landscape
The report by data.ai highlights that only gaming giants like Candy Crush Saga, Honor of Kings, Monster Strike, and Clash of Clans have surpassed TikTok’s impressive financial benchmark. King/Activision Blizzard’s Candy Crush Saga, for instance, has exceeded $12 billion in user spending.
Explosive Growth and Revenue
Entering 2023 with a staggering $6.2 billion in user spending, TikTok experienced a remarkable 61% year-over-year increase, amassing an additional $3.8 billion throughout the year, surpassing the 2022 figures by 15%. It’s worth noting that the report’s data encompasses consumer spending on TikTok solely on iOS and Google Play, excluding third-party Android app stores in China.
The Mechanics of Spending
Users on TikTok transact using “coins,” a virtual currency primarily utilized for purchasing gifts for creators. These gifts serve as rewards for engaging content and can be converted into cash. However, TikTok retains a substantial 50% commission from these payments, with the most popular in-app purchase being a 1,321-coin set priced at $19.99, contributing a significant portion to the user spending pie.
Market Insights and Projections
Data.ai anticipates a continued upward trajectory in spending on TikTok, forecasting a remarkable surge to $15 billion by 2024, adds NIXSolutions. This projection underscores the platform’s sustained growth and dominance in the realm of user spending, setting new benchmarks in the non-gaming app landscape.