The Rise of TikTok
With an addictive app that appeals to young people, TikTok is developing a client base that can’t put it down
Founded in 2016, TikTok is a Chinese video sharing platform. A simple concept where users are presented with a series of short videos that is proving a powerful platform – it’s taking the world by storm. But with an addictive and easy to use app that appeals to young people, TikTok is developing a client base that can’t put it down.
CEO Zhang Yiming created ByteDance in 2012, TikTok’s parent company. After several bouts of investment leading up to 2014, the business received $115 million and formed their flagship app Toutiao, meaning “today’s headlines”. This app became incredibly popular within China’s political climate where there is a lack of access to worldwide news. Holding the spot for number one news app in China’s IOS store, the app targeted a young market as TikTok would a few years later.
When ByteDance released TikTok – or Douyin in China – in September 2016, they had a similar target audience they already knew how to hit. Their previous experience meant that ByteDance knew how to make China fall in love with their app almost immediately. However, the truly groundbreaking success came when ByteDance went global after acquiring Musical.ly for over $800 million in 2017. Both Musical.ly and TikTok spread from China but whilst the latter was conquering the Asian markets, the former had migrated to the Americas and Europe where it was reigning almost unopposed in its niche. 2017 was the year to “bring them together” according to TikTok’s Head of Global Marketing. With this merger, ByteDance was removing its main competition and leaving a TikTok shaped hole in the market.
The app is now available in 154 different countries with 1.5 billion downloads across the globe in total. Though this seems small in comparison to Facebook’s 16 billion, it’s still an impressive number for such a young competitor.
There is no better proof of TikTok’s success than the retaliation from its worried rivals. Facebook released Lasso, a suspiciously similar app, which allows users to shoot up to 15 second videos and overlay popular songs. Though there are of course some differences, Facebook are surely trying to get a piece of ByteDance’s success.
Who could blame them? With TikTok posting a 300% increase in profits in the fourth quarter, this is clearly an industry to be in. Big money is being made but many users have no idea where the revenue comes from. The answer: advertising. Social media may not have a product to sell but they have an audience which businesses will pay enormous amounts to access.
An advertising campaign starts at $500 per day and a Hashtag Challenge can cost over $100,000. Though the price seems astronomical, the audience this taps into is one that’s giving you its full attention. Unlike TV, where your advert has a few minutes in the background while a viewer makes a cuppa and checks their phone, TikTok users are fixated by their device. The average user is on the app 52 minutes a day and opens the app once every 3 hours. In addition, the audience is 60% Gen Z. This is a perfect platform to reach this target market.
Viewing figures are constantly on the rise. TikTok became the most downloaded app in the IOS store in 2019, beating YouTube, Instagram, Facebook and Snapchat. This app is certain to become an even bigger player in the social media scene. The sky is the limit for what ByteDance could achieve in the future.
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