TikTok seeks 1 billion DAU and plans to expand in Brazil: report

TikTok is reportedly setting a goal of reaching more than 1.05 billion daily active users worldwide by year-end. Credit: 123RF

With less than two months to go until 2023, the wildly short video platform TikTok is reportedly setting a goal of reaching more than 1.05 billion daily active users (DAUs) worldwide by year-end. The platform will have to add more than 200 million DAU to achieve this goal.

A TikTok spokesperson told Chinese media outlet LatePost that the company hopes TikTok to be as dominant in the international market as its Chinese version Douyin in China. Douyin’s market penetration rate in its home market is 54%, while TikTok is less than 20% globally.  

After acquiring Musical.ly in the year of its launch in 2017, TikTok exploded in popularity and became the fastest-growing social app. But despite the rapid growth, TikTok hasn’t earned revenue that matches the size of its user base. ByteDance CEO Liang Rubo acknowledged and said last month that TikTok’s monetization has fallen short of expectations.

Unlike Douyin’s unmatched competitive edge in short video and retail in the Chinese market, TikTok faces heated competition from global giants like Google and Meta. In 2021, the platform raked in nearly $4 billion in revenue, mostly from advertising, while Meta’s Instagram, which has 500+ million daily users, made an estimated $47.6 billion in revenue in 2021.

Why it matters: TikTok has amassed over 1 billion monthly active users in just under five years – faster than Facebook, Instagram, and Youtube to achieve this milestone. But from a monetization perspective, TikTok still pales in comparison to these tech giants.

TikTok almost relied on Douyin to provide technical support at the beginning of its attempt at monetization in 2020, hoping to replicate Douyin’s model in its home market for the international market. However, such reliance has slowed TikTok’s monetization since its product requests often get prioritized after Douyin’s. 

Fierce competition from Google and Meta

Similar to social media competitors like Meta, advertising is a key revenue driver for TikTok.

The company officially launched advertising on TikTok in 2020, but due to an initial lack of independent tech support, coupled with strong global competitors, monetizing progressed slower than expected.

According to LatePost, TikTok’s reliance on Douyin’s tech support caused many of its product demands prioritized after Douyin. It wasn’t until 2021 that TikTok started to build its own advertising and support system.

A TikTok monetization staffer told LatePost that the platform has reached users on a scale comparable to Google and Facebook in major markets, but is unable to provide the same level of precision in customer acquisition. This is partly due to Google apps’ and Android phones’ wide reach, which allows Google to better portray its users, thus helping advertisers target their audience more precisely.

Facing TikTok’s sudden rise, Meta has been betting on its TikTok clone Reels since its launch in 2021. Meta CEO Mark Zuckerberg noted that ad monetization for Reels is progressing faster than expected, crossing the $1 billion annual revenue run rate in the April-June period.

Bringing e-commerce to Brazil

TikTok’s e-commerce business recently planned to move up its timeline of entering the Brazil market, shifting from the second half of 2023 to the first half, LatePost reported.

The report added that Huang Yuanjian, former head of internationalization products at ride-hailing giant Didi Global, will be in charge of marketing operations for TikTok e-commerce in Brazil.

The platform will also face competition in Brazil. Bloomberg data refers to MercadoLibre and Lojas Americans holding 48% of Brazil’s e-commerce market share as of 2021, with other e-commerce platforms having a smaller share. Alibaba, for example, has only a 3.2% market share in the country. In addition, TikTok rival Kuaishou also said last month that it has identified Brazil as a priority region for monetization.

Cheyenne Dong is a tech reporter now based in Beijing. She covers e-commerce and retail, blockchain, and Web3. Connect with her via e-mail: cheyenne.dong[a]technode.com. More by Cheyenne Dong


Source: https://technode.com/2022/10/19/tiktok-seeks-1-billion-dau-and-plans-to-expand-in-brazil-report/