ByteDance, the company behind the wildly popular short video app TikTok, is a rapidly rising star in the Chinese tech scene.
Last year, after a $3 billion investment round, ByteDance claimed the title of ‘the world’s most valuable start-up’.
Then, just a few days ago, the news broke that ByteDance is now the second-biggest player in the Chinese digital advertising landscape, taking 23% of all digital media spend in the first half of 2019 – equivalent to 50 billion yuan (or $7 billion). In the process, ByteDance leapfrogged over some of China’s most important tech companies, including the (slightly ailing) search giant Baidu, and Tencent, the owner of omnipresent super-app WeChat.
Ad revenue for ByteDance grew 113% in the first half of this year, according to a report by consultancy R3, who described ByteDance’s growth as “extraordinary”. Most of the growth in ad revenue came from Douyin, the Chinese equivalent of TikTok, and Jinri Toutiao, ByteDance’s news aggregator app.
ByteDance’s rise has been nothing short of meteoric, achieving an estimated value of $78 billion in just six years. The company boasts some of the most popular apps in China, and this year set out to take on the dominance of WeChat with its own chat app that allows users to send disappearing videos. Plus, its short video platform TikTok has taken the west by storm.
But plenty of companies behind popular apps and social networks falter when it comes to turning a profit. So, how has ByteDance succeeded in becoming one of the biggest players in Chinese advertising?