TikTok-the owner of ByteDance swept during the coronavirus pandemic

For many people, this application becomes a pleasant escape from all the grim news about the virus and its economic losses.

TikTok has taken advantage of this at the moment, encouraging optimistic hashtags like “#HappyAtHome,” which has seen many users tie their parents to doing TikTok videos. It also promotes a direct stream of calming content: On a recent Wednesday, for example, one stream was broadcasting live footage from a panda shelter.

He said TikTok approached him last year to join his platform. Richard, 31, considers him a bit too young for him.

Then the coronavirus plague struck, and Richard found himself hooked on the 15-second TikTok video.

He also likes more “parents, like my generation and older, who join. And many songs from my generation,” he said.

The entry of a new record-breaking user is a big win for the owner of the ByteDance application, which has tried to exploit the appeal of TikTok worldwide. This application is the only social media platform created by Chinese companies to gain significant appeal outside of China.

But the success of Beijing-based startups in China during the pandemic is also enormous – and can provide clues about how TikTok hopes to grow into a major money maker in the future.

Quarterly catch record

The ByteDance mobile app earned $ 157 million from January to March, according to Sensor Tower. Nearly 90% of that amount comes from China, and almost all are driven by Douyin, the Chinese version of the company killer application. That is a quarterly distance record for ByteDance, representing a 423% increase over the same period a year earlier, and up 50% compared to the previous quarter.

Bytedance did not respond to requests for comment for this article.

The first week of February is Douyin’s biggest week, with users spending more than 3 billion hours on apps – up 130% from the weekly average in 2019, according to analytics company AppAnnie.

In China, live streaming is very popular. Influencers often make money by receiving virtual tips during a live stream.

“Generally in Chinese applications, there is a habit of tipping content creators,” said Wiktoria Marszałek, account manager at Nanjing Marketing Group, a company that helps foreign companies grow their brands and sales in China.

For example, he said, Douyin users buy virtual donuts or hearts that they can give to creators or influencers during live streaming. All of that translates into revenue in the application for ByteDance.

The company still makes most of its money from advertising. Consultancy firm R3 estimates that ByteDance generated 50 billion yuan ($ 7 billion) in advertising revenue in the first half of 2019 alone.

But the in-app revenue earned from users of Douyin and TikTok is more than just stupid changes.

Douyin and TikTok’s earnings are “skyrocketing now,” said Randy Nelson, a Sensor Tower analyst. Sensor Tower views TikTok and Douyin as essentially the same application, citing similarities in branding, marketing, and user experiences.

Nelson said the application’s success in monetizing users put it in the same league as the top entertainment companies.

“It’s on Disney +, on Netflix. And that’s without Android in China,” he added. Tower Sensor can only track data from the App Store and Google Play store, and Play stores are prohibited in China.

Some influencers bet on the post-pandemic TikTok

TikTok hasn’t seen much fortune from Douyin, because it only started making money through advertising and live streaming last year, according to a TikTok spokesman.

But Douyin gave a hint about how TikTok hopes to emulate the financial success of his Chinese sister application. For example, TikTok last year made live streaming available to users with a certain number of followers.

It remains to be seen whether this feature will take off outside of China.

Westerners are “not familiar with the Chinese style of live streaming” where influencers flow for hours just to peddle goods, said Marszałek, from Nanjing Marketing Group. “In China they only sell, sell, sell,” he said.

Giving virtual money to creators on social media is also not a common practice – Facebook has a currency in the application that was introduced so users can tip creators, but never get any appeal, according to Nelson, from Tower Sensor.

Like many other social media companies, TikTok anticipates that coronavirus will give a big blow to advertising revenue in the United States, Europe and other markets where it operates.

Have already started “donating” advertising credit to health organizations so they can post updates about the pandemic. TikTok will offer more free advertising space to restaurants and small businesses when they reopen, the spokesman said.

Once the company starts shopping again, users like Tsui bet TikTok will be the place where they spend money.

Before moving to New York, Tsui lived in Hong Kong where he made around $ 1,500 per month partner with brands and advertisers to promote their merchandise to 74,000 followers on Instagram.

Breaking through Instagram in New York proved difficult. But now, “because everyone is talking about TikTok, these brands are really targeting influencers and doing advertisements on TikTok,” he said.

Native to New Zealand now trying to figure out the famous TikTok algorithm is opaque in the hope that it can develop followers strong enough to generate revenue.

“I certainly think TIkTok is the way to go in the future in terms of advertising and product promotion,” Tsui said.