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

TikTok, the short video app, has reached a remarkable milestone. After hitting 1 billion monthly users in 2021, it has become the first non-game mobile app to make $10 billion in consumer spending on the Apple App Store and Google Play combined.

This information comes from a recent analysis by app intelligence provider data.ai. Until now, only gaming apps like Candy Crush Saga, Honor of Kings, Monster Strike, and Clash of Clans have achieved such financial success, with Candy Crush Saga leading the pack at over $12 billion in earnings.

In 2023, TikTok continued its financial success by starting the year with over $6.2 billion in consumer spending. It added another $3.8 billion throughout the year, marking a significant 61% growth from the beginning of the year. This amount is also 15% higher than the total consumer spending in 2022, which was $3.3 billion, as reported by data.ai. It’s important to note that this analysis only considers TikTok’s consumer spending on iOS and Google Play and excludes third-party Android app stores in China, potentially indicating even higher total consumer spending for TikTok.

The spending primarily comes from TikTok’s in-app purchases of “coins,” a virtual currency that users use to buy gifts for creators on the platform. These gifts serve as a way to reward creators for their content and can be converted into real currency, with TikTok retaining 50% of the payout. The most popular in-app purchase is a bundle of 1321 coins priced at $19.99, contributing to a quarter of TikTok’s revenue. It’s worth mentioning that TikTok also generates revenue through avenues like advertising and e-commerce with TikTok Shop, but these sources should have been included in data.ai’s analysis.

According to data.ai, the journey to TikTok’s $10 billion milestone was significantly driven by U.S. consumers and iOS users in China. Both markets individually contributed approximately 30% of the revenue, making up a combined total of 60% of TikTok’s in-app spending. Other notable contributors include Saudi Arabia, Germany, the U.K., and Japan, together accounting for 13% of the app’s in-app purchase revenue.

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While TikTok stands as the only non-game app to reach the impressive $10 billion mark, other non-game apps also generate substantial revenue, albeit trailing behind TikTok. Notable contenders in this category include Tinder and YouTube. However, both these apps fall behind TikTok by a margin of $2 to $3 billion, highlighting TikTok’s dominance in this space, as emphasized in the report.

Lexi Sydow, Head of Insights at data.ai, announced that TikTok is on the path to becoming the highest-earning mobile app ever, nearing the impressive $15 billion milestone in 2024. Sydow highlighted the daily spending trend of consumers, surpassing $11 million as they tip their favorite content creators. This surge in spending has propelled TikTok beyond the previously most lucrative mobile game, Candy Crush Saga.

Sydow further mentioned that TikTok users are expected to spend the equivalent of a 40-hour work week each month in the app by the end of 2024, representing a significant 22% increase from the previous year.

Also read | TikTok testing out an advert-free monthly subscription

The analysis from the firm also predicts continued growth in TikTok’s revenue in 2024, with consumer spending reaching the noteworthy $15 billion mark. This projection underscores the sustained financial success and popularity of the platform as it continues to engage and captivate users worldwide.