India is the biggest market for TikTok in terms of the number of users after China. The short video app has amassed about 200 million users in India and posing a serious threat to the dominance of social networking giant Facebook.
While the Bytedance-owned company didn’t impact the revenue churn by the Facebook ecosystem in India till the second half of last year, it’s no more the case as TikTok started a push to make money over the past months.
And, the monetisation effort seems to be on track for the company.
According to two Entrackr sources, the company had earned about Rs 23 to 25 crore in revenue in the quarter ending December 2019. “TikTok did revenue of about Rs 23-25 crore during the October-December quarter,” said one of the sources on condition of anonymity.
TikTok has been monetising since February last year but it picked up in the last two quarters of 2019. “Brands whose target audience fall under age bracket 18 to 36 have been seeing TikTok as a more engaging platform than Facebook and Google ecosystems,” said the second source. He also requested anonymity.
According to him, TikTok has set a target to cross Rs 100 crore in the July-Sep quarter this year. While the company offers standard media packages such as Infeeds-App Ads, Topview and Takeover, its customised solutions include Branded Effect and Hashtag Challenge.
“Customised solutions: Branded Effect and Hashtag Challenge have been raking in more money for TikTok than the standard ad formats,” added the first quoted person. Branded Effect brings a deeper level of user engagement and they tend to generate high-quality content for the brands.
Branded Hashtag Challenge is essentially used by brands to gain mass exposure and generate UGC (user generated content) at scale. “Besides FMCG brands, consumer internet companies including OYO, Paytm, Snapdeal and ClubFactory have been spending on customised media offerings,” said the first quoted person.
It’s worth noting that the platform had recently launched TikTok Ads – one place to advertise on Bytedance ecosystem in India. Besides TikTok, the solution offers inventories for Helo and Vigo Video as well.
Detail queries sent to TikTok did not elicit immediate response.
If we look at Rs 892 crore Facebook revenue in India in FY19, TikTok’s earnings appear marginal. However, it is expected to catch up at a quick pace if the same trend continues. The company is expected to post about Rs 80 crore revenue in the ongoing fiscal.
While it will be early to say that TikTok will eat up the revenue of Facebook’s family of apps, experts believe that Bytedance would pose a serious threat to Facebook’s revenue in the coming years.
“In the short run, the platform is going to dilute the offline media dollars than to share the established digital platforms like Google and Facebook budgets. We never know in a couple of years time, Bytedance ecosystem could have the potential to change the business decisions of the consumers. If TikTok manages to establish how it is changing consumer behaviour across the funnel then it is going to cannibalise Facebook’s revenue for sure,” said Praveen Pandey, former General Manager – Performance, Resolution Media (Omnicom Media Group).
Update: We have updated the headline reflecting that TikTok targets Rs 100 Crore revenue in July-September quarter.
