The TikTok business model primary idea was fast content, with 15 seconds of homemade videos, with dancing, lip-sync, and make-up challenges. This new concept of video made TikTok a popular influence that, in a few years, became a 50-billion-worth-startup.
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TikTok was launched by ByteDance, a company founded by Zhang Yiming, a former software engineer, in 2016. The popularity of this social media increased in 2018, when another app of ByteDance, Musical.ly merged with TikTok. Today, it’s available in 150 countries worldwide and in 75 languages, and it has reached the mark of 1 billion users around the world and 2 billion downloads, which places the application in fourth place with the highest number of users in the world.
TikTok is owned by the company ByteDance Ltd., which is based in China and has Liang Rubo as the CEO.
“Our mission is to inspire creativity and bring joy.”
Like any potential social media, TikTok’s business model has started with advertising to make money, but increased two more revenues: app purchases (TikTok Coins) and e-commerce offers. Let’s take a deeper look at these avenues below.
The largest source of income in social media, TikTok has personalized advertising for each user, like Facebook. There are also TikTok Brands: Takeover, Hashtag, Effects. The TikTok Branded Takeover is a type of advertising that takes over the screen when the user opens the app. Similar to it, there’s TikTok View Ads, where the advertising doesn’t cover the screen, but in the feed. The TikTok Branded Hashtag Ads appear on the discovery page on a video exposing or using the product, challenging the users to engage the hashtag in making a video. The TikTok Branded Effects Ads are very common and very popular. It’s a filter to take photos with frames or stickers with the brand for 10 days.
When a TikToker (a user of TikTok that creates content) reaches 1,000 followers, it’s possible to receive gifts with TikTok Coins, from users in their live videos. To receive these coins, the TikTokers have to exchange them for real money through the app — and then TikTok charges a commission.
Considered new and recent, TikTok is working on ways to integrate e-commerce into its platform, with selling tools that make available shopping events or even ways to display products during a live stream. In each sale, TikTok profits a commission.
Let’s take a look at the TikTok Business Model Canvas below:
TikTok’s customer segments consist of:
TikTok’s value propositions consist of:
TikTok’s channels consist of:
TikTok’s customer relationships consist of:
To users, TikTok provides a customer help center, that provides the best experience to the user. To the advertisers, TikTok provides the metrics to publish their products.
TikTok’s revenue streams consist of:
TikTok’s key resources consist of:
Hans down, the platform is the most profitable key resource to TikTok, but millionaires’ partnership contracts are also a source of income.
TikTok’s key activities consist of:
The most important activity is the development and updating of TikTok, to prevent bugs and attacks and increase user satisfaction.
TikTok’s key partners consist of:
TikTok’s cost structure consists of:
The TikTok’s data centers, employers and developers paychecks, marketing, investments in infrastructure and administrative offices bills.
Below, there is a detailed swot analysis of TikTok:
Even with all the recent controversy, TikTok is getting bigger. Although many people still believe that this social media will never reach Facebook or Instagram’s status, TikTok provides a different algorithm, with a new way of using and producing content that can disturb the rivals.
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