How does TikTok make money? This is your business model


What does TikTok live on? What is your business model? We explain everything to you in this report.

Have you ever wondered what the operation of the social network TikTok when it comes to generating profits? Being one of the largest and most popular today with more than 800 million active users per month, the TikTok platform has become a millionaire industry since its arrival.

If you want to understand how TikTok makes money, join us in this quick guide where you can understand its business model and how it grows every day.

This is how you make money TikTok quick guide to understand your business

This is how TikTok makes money: a quick guide to understanding your business

How and when was TikTok born?

Although nowadays everyone talks about TikTok, was not always known in such a way. Initially it was a social network focused on education in order to share short videos (lasting 15-60 seconds) for users to teach or learn about different topics.

Despite being a great idea from friends Alex Zhu and Luyu Yang, the platform was not attractive enough to the public and after six months of development, they decided to change their approach.

How and when TikTok was born

History of the birth of TikTok

Now the objective had changed. The company was looking for a new direction in the field of entertainment and began to see adolescents as the ideal audience in the United States, a market characterized by viralising and creating new trends.

This evolution will mix music and videos within the application and this is how it was born Musical.ly officially in August 2014. It took only one year for the new social network to be ranked # 1 in the iOS App Store and to be the most downloaded free App in more than 30 countries, including the US, Canada, the UK, Germany, Brazil and Japan.

By 2016, Musical.ly it had reached an incredible 90 million downloads and surpassed 12 million new videos a day. This growth prompted major brands such as Coca-Cola to launch their #ShakeACoke campaign within the platform, which consisted of “user-generated ads”.

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Later, it is made public through the Wall street journal, which Musical.ly had been acquired by Bytedance Technology Co. for the sum of one billion dollars, thus merging Musical.ly with TikTok and creating the American version of the social network (Musical.ly) and migrating all users to this new one platform called TikTok.

Who is the owner of TikTok?

TikTok is owned by the China-based company called Byte Dance Technology Co. It is directed by Yimiing zhang, an entrepreneur who owns several companies, among which the real estate search portal in China stands out and of course Byte Dance.

Who owns TikTok

The owner of this great social network is Yimiing Zhang

Zhang it has always been related to the world of technology. Work as Director of Technology at Kuxun managing around 40 engineers for the travel search engine in China, a company that would later be bought by TripAdvisor.

It is estimated that by the beginning of 2020, Zhang has a net worth that exceeds $ 6.8 million According to the magazine Forbes. Much of that capital is due to the growth and popularity that Byte Dance has achieved.

How many users does TikTok have right now?

Just two years after its official launch in 2016, TikTok had reached an incredible 500 million users worldwide. After four years, it is possible to say that it has exceeded 800 million active users per month in the world.

The most remarkable thing about this is not only the number of users, but that around 150 million of these users are in China alone. It is important to detail that in this Asian market, TikTok has its exclusive version called Douyin.

How many users does TikTok have right now?

Currently the app has more than 800 million active users and it is estimated that it will continue to grow

This popularity has led it to become one of the most downloaded Apps in recent years in the Google Play Store and the Apple Apps Store, reaching more than 2,000 million downloads between both platforms.

Only in the framework of this year 2020, TikTok became the most downloaded App in the world, surpassing the 115.2 million downloads, achieving an increase of 98.4% compared to the same period a year before.

It is estimated that the 41% of the population current of TikTok It is made up of young people and adolescents aged between 16 and 24 years old. This is mainly due to its design and functionalities, something that had been previously studied by developers when choosing their target audience.

How does TikTok make money?

According to data provided by CrunchBase, TikTok can generate up to a million dollars a year. This figure is possible thanks to the platform currencies and digital gifts that users use, while the monetization systems are established.

To be clear, the way how TikTok makes money It is through in-app purchases related to currencies. These have a cost from 100 coins - € 1.09 up to 10,000 coins - € 104.99.

How TikTok makes money

For now, TikTok makes a profit from the coins through the collection of commission

These coins are used by the users who consume the content and granted to the creators as a method of appreciation or compensation. According Sensor Tower reports, about $ 3.5 million dollars are used per month by users from around the world in in-app purchases.

In addition, the company has preset to charge a certain commission for this type of transaction, 30% goes to the servers of the store where the application is stored, 20% for TikTok and the remaining 50% for the content creator.

Although the annual income seems little, the truth is that TikTok is more focused on massive growth and reach of great masses that to the monetary gain, this can be evidenced thanks to the statistical data.

What future awaits TikTok?

For now, the future of TikTok is quite promising. Today, there is no application that can handle it in your industry. Such is the case, that Facebook has recognized its growth, has even developed Lasso, an app similar to compete with TikTok and stand up to it, yet the same was closed on July 10, 2020.

What future awaits TikTok

Good times ahead for TikTok

Similarly, the reach and positioning of this social network is very solid, mainly among young people around the world. This is reflected through the advertisements promoted on Facebook, YouTube and even Google, where it is possible to show the market focus they want to conquer.

The fact is that more and more millions of young people and users in general are joining TikTok and, thanks to its growth and consolidation in such a natural way, can make us believe that it is unstoppable.

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