How does TikTok China monetize users?

Douyin, the Chinese version of TikTok, is not only monetizing its advertising services, but is also taking over e-commerce and food delivery.

According to SCMP, Douyin, the Chinese version of TikTok, seeks to increase revenue through localized services such as online sales and food ordering. With these new features, Douyin is expected to rival familiar competitors like Alibaba or Meituan.

Besides generating revenue from advertising, Douyin’s growth in e-commerce livestreams or other aspects may reflect the business model TikTok is targeting in the overseas market later on.

Both Douyin and TikTok share the same original algorithm and are owned by Beijing-based ByteDance. Douyin sees around 600 million active users every day in China.

Recently, the social commerce platform hosted the 921 Goodies Festival to compete with Alibaba’s Singles Day in November and JD.com’s 618 festival in June.

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Accordingly, from September 9 to September 21, Douyin is giving users millions of discount codes and coupons to encourage their spending habits on the platform. ByteDance also aims to turn Douyin into an e-commerce giant after collaborating with a number of Chinese express delivery companies such as JD Logistics, SF Express and ZTO Express.

In addition to online shopping, Douyin has also increased its presence in lifestyle services such as groceries and grocery delivery, an area dominated by Meituan.

Last month, the group decided to partner with Ele.me, Alibaba’s food delivery platform, so users can immediately order food during restaurant live streams without leaving the app.

In July, Douyin tested food delivery in several cities, including some affected by Covid-19. The platform is geared towards serving individuals as well as a group delivery service for businesses.

In the first half of this year, the gross goods value (GMV) from Douyin’s online and offline businesses, which includes food and hotel orders, increased more than 30 times compared to the previous year. Currently, the app operates in more than 370 Chinese cities as of the end of August and is associated with nearly 1 million traditional businesses.

ByteDance was recently valued at $300 billion, making it China’s most valuable unicorn. The group is seeking to diversify its revenue streams as growth begins to show signs of slowing.

On the other hand, the company’s IPO plan is still in uncertainty. Last month, CFO Julie Gao confirmed that the company has no plans to list shares.

In 2021, the Beijing-based company grossed $58 billion, up 70% from the previous year. The growth rate fell for the first time from 111% annual revenue growth in 2020.

Jake Eloman

Hello there. I'm on the GMSPORS Editorial team and one of the SEO support staff. I am one of the GMSPORS employees in the preparation and research of many content.

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