Chat with us, powered by LiveChat How Does Tiktok Work: Tiktok Business Model & Revenue Model

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How is TikTok Business Model Beneficial For Your Business?

4578 Views | 1 min | Published On: July 4, 2022 Last Updated: June 29, 2023
Tiktok business model - social media app development

We have Twitch for live streams, Snapchat for photo editing, and Spotify for music. But innovations will always have a place. One such instance is the TikTok business model, which has developed into a fantastic source of entertainment and keeps millions of users hooked on it.

How can a business idea be turned into lucrative apps like TikTok? In this blog, you will get to know about the Tiktok business model and how it can be implemented in your business idea as well.

Also, read – How Much Does an App Like Snapchat Function in the Marketplace?

Tiktok Stats & Facts: Funding and Major Milestones

ByteDance, a business established by former software engineer Zhang Yiming, introduced TikTok in 2016. When, a ByteDance app, combined with TikTok in 2018, the popularity of this social media platform rose.

Tiktok business model statistics

It is currently accessible in 150 different nations and 75 different languages, and it has amassed 1 billion global users and 2 billion downloads, ranking it fourth among all apps in terms of the number of users.

  • Founders: Zhang Yiming
  • Launched in: September 2016
  • Headquarters: Culver City, California
  • The number of app users: 1 billion+ monthly active users
  • Industry: Social Networking
  • Total valuation: $400 billion
  • Funding amount: $200 million 

The success timeline of Tiktok’s business model has created a huge impact in the business world. The concept of combining video sharing, video sharing, and music into one mobile application has left many business owners and entrepreneurs astounded.

tiktok business model statistics

What Led to its Success?

TikTok is a short-video app that young people use all around the world now, but it wasn’t always known by that name. The Beijing-based business ByteDance introduced it to the Chinese market in 2016 under the name Douyin.

ByteDance, a Chinese company that also controls several other well-known networking apps, was established in 2012 by CEO Zhang Yiming, a seasoned businessman and former Microsoft engineer.

Douyin reached 100 million users just a year after its inception, and in 2017, it introduced iOS and Android versions in foreign countries under the new name TikTok.

Simply said, TikTok’s success may be traced to the way it turns social media on its head while also taking everyone back to the source of the original appeal—the potential to go viral. It’s reassuring to have a platform with the TikTok business model that prioritizes content over anything else because we’ve all been so focused on increasing our reach by accumulating a sizable fan base through subscribers or followers. 

Because of this, it’s elevating meme culture to new heights, providing Generation Z a platform to be visible versions of themselves, and enabling marketers to motivate their audience in real, enjoyable ways. Additionally, they are taking significant steps to increase user confidence, which will ultimately determine the platform’s destiny.

How Does Tiktok Work: Tiktok Business Model Canvas

Many business owners have been motivated by the Tiktok business model to investigate how to build a social media website. It is a website that allows people to upload and share videos online. Users can post videos and film content thanks to IT. Following that, the videos can be altered using the application’s numerous editing features, including filters and effects.

Tiktok is a fantastic forum for exchanging knowledge and showcasing abilities, as well. A video can be made into a live wallpaper with this. These videos can be saved by users in the settings. In a short period, the platform gained popularity.

tiktok business model

Tiktok Revenue Model: How Does Tiktok Earn Money

To further understand TikTok’s monetization strategy, let’s take a closer look at each of these sources of income:

tiktok revenue model

1. TikTok Ads

Like any other social media network, TikTok’s main source of income is through advertising. The many ad types that advertisers use on TikTok are listed below:

TikTok In-Feed Ads

Short video commercials are known as “in-feed ads” are displayed to users as they scroll through the “For You Page,” which is filled with content that has been specifically tailored for them. These advertisements, which resemble those on Instagram Stories, naturally merge into the TikTok feed.

TikTok Brand Takeover Ads

The TikTok Brand Takeover advertising covers the full screen as soon as users launch the app, as implied by the name. By displaying these types of advertisements to their intended audience, advertisers hope to increase sales.

TikTok Top View Ads

Top Views on TikTok Similar to TikTok Brand Takeover advertisements, the ads do not immediately fill users’ screens as they log in; instead, they appear in the first In-feed post after three seconds. These 60-second full-screen advertisements with auto-play and sound help improve brand exposure.

TikTok Branded Hashtag Ads

Branded Hashtags adverts are displayed on the discovery page and ask users to make a video of them dancing or acting in any other way that promotes a specific product. Users upload these amusing videos with a predetermined marketing hashtag after producing them. Branded hashtag ads are a cool format that promotes awareness while also making it a fun pastime.

TikTok Branded Effect Ads

Users can also add Branded Effects to their films, such as unique stickers, augmented reality filters, and lenses. Users have a sufficient amount of time to connect with the brand thanks to TikTok’s decision to allow these effects to remain online for up to 10 days.

2. TikTok Coins

Virtual coins are another way that TikTok users and the platform itself can both make money. By broadcasting a live video, TikTokers with at least 1,000 followers can earn virtual presents.

If viewers enjoy their work, they can tip them by sending them virtual gifts, but each present costs coins, which users must buy through the app with real money. They can then use these currencies to send presents to the content providers they most enjoy.

3. Ecommerce Offerings

For a long time, TikTok has been developing its e-commerce-related features. TikTok started testing simple eCommerce connections inside their video in 2019. Following the addition of live-stream shopping events and a Shopify Integration to display product adverts in-stream, TikTok further improved its on-platform selling options.

Wrapping Up

We are one of the leading social media app development companies. We have been assisting startups, SMBs, and businesses for more than 9 years in acquiring new technologies that improve their overall performance and enable them to scale new heights.

Ready to implement the TikTok business model in your business? Contact us today!

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