Friday, 2024 June 14

ByteDance hits 2018 sales target, but only barely

Beijing-based ByteDance—the company behind the popular news aggregator Toutiao and the video-sharing app Tik Tok—hit the lower end of its 2018 revenue target of RMB50 billion to 55 billion yuan (US$7.4 billion to US$8.1 billion).

This was mainly due to the company’s delayed launch of new monetisation methods and diminished earnings from ads, according to individuals familiar with the matter who spoke to Bloomberg. This was the first time in years for ByteDance to fall short of beating its earnings estimate.

Many Chinese tech giants—Tencent, Xiaomi, and Meituan-Dianping, for instance—saw their share prices slide in 2018 as investors became wary of frothy tech valuations. ByteDance, however, seemed immune to those anxieties. The company secured funding from SoftBank, KKR & Co., and General Atlantic, taking its valuation to US$75 billion and making it the world’s most valuable startup.

Since its founding in March 2012, ByteDance has become a social media powerhouse. In China, ByteDance’s apps have become potent competitors of messaging and video-sharing platforms in Tencent’s ecosystem. The company has also made successful forays into India, where Tik Tok and Helo—an app that aggregates content about parenting, entertainment, and even farming for an Indian audience—were among the 100 most popular Google Play Store apps in the country last year. In particular, Tik Tok was the top-ranking free Google Play Store app in India in 2018.

Like many tech companies that provide services on users’ smartphones, ByteDance must weigh whether a revenue model based on ads is sustainable. In the meantime, the company is opening new fronts of competition with Tencent. On Tuesday, ByteDance launched a messaging app called Duoshan, making a play to translate Tik Tok’s popularity to another vertical.

Editor: Brady Ng


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