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TikTok Business Model Research Team | Posted On Monday, July 29,2019, 04:09 PM

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TikTok Business Model



TikTok is an Android video-making application which is used to create lip-synced videos and upload them on social media. It is a Chinese company owned by ByteDance. It has a huge user base and was an instant hit with the Indian market.

The videos clips are about 15 seconds long and allow users to create short comedy, dance or skit videos and upload them on the app for public viewing. The app has become an outlet for people to showcase their skills through lip-syncing and performances.

When you sign up for the app the account become public by default, allowing people to access your videos, send direct messages as well as use location information.

Tiktok users must be at least 13 years of age to upload videos and use the platform. This app is quite famous in other countries as well and different countries have set specific restrictions on age and usage of this app.

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TikTok Business Model

How It Rose to Popularity?

The TikTok app has been growing tremendously since inception. In the year 2018, it was the most downloaded photo and video application in India. The app has over 500 million monthly active users across the Globe. It recorded the highest downloads in the U.S through apple store with about 80 million downloads. Some of the reasons behind its massive success are:

Celebrity Endorsements: Celebrity partnership is one of the most crucial strategies used by TikTok in its claim to fame and to expand geographical boundaries. The app partners with celebrities to create a buzz thus influencing people to use the app and generate viral content. The celebrities use the app to post personalized videos and also promote the app on various other social media channels like Facebook, Instagram and so on.

Content Localization: Another key factor that is driving the popularity of this app is its strong focus on localized content. Despite being a global app, it runs contests and challenges that help it capture the local market using localized hash tags. Such trends are helping it generate viral content as well as promote the app and this has made it popular in countries like Russia and China.

How TikTok Makes Money?

According to reports, TikTok earns considerable revenue each year. This can be attributed to the social media content generated by its users. A large user base helps generate a huge amount of social media content absolutely free. ByteDance, the company behind Tiktok, claims to use machine learning and artificial intelligence to modify and curate content and enhance the app usage experience.

Apart from making huge profits, the current strategy of TikTok is to grab a considerable market share. The company is investing a huge amount of profits towards business expansion and to also gain popularity. Listed below are some of the ways, TikTok earns money:

  • Generating revenue through targeted advertisements.
  • Helping content creators monetize content and rise to fame, by showcasing their talent on this user-generated platform. This step is crucial for the long term success of TikTok.
  • There are other sources of generating revenue through in-app purchases, where users gift coins to their favourite creators in return for digital gifts.
  •  The app also displays splash ads and newsfeed ads that generate revenue per click.
  • The app has merged with the musically app which had a user base of 100 million users. This has enabled the app to grow functions like enabling music and dialogue options, lip-synced videos, funny and entertaining videos, further increasing popularity.

How Can Users Make Money Using TikTok?

The users can also use this platform to monetize content. This is a strategy used by TikTok to engage its user base.

  • You can cross promote your ventures on TikTok if you are an influencer on other social media platforms. You can influence people to like and follow your ventures and generate revenue.
  • You can also promote your brand using TikTok. You can earn a significant amount by promoting a certain brand, if you have a large number of followers on social media. You can also sell and promote your own stuff through TikTok videos.

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