Social media video app TikTok has become the first app to surpass $1bn in consumer spend within a single quarter in Q1 2023.
According to Data.ai, in this quarter TikTok surpassed both Tencent's Honor of Kings ($570m) and YouTube ($530m) in terms of consumer spend. In terms of one-time purchase revenue, TikTok dominates the top ten, above heavy hitters such as Roblox and Candy Crush Saga.
Aside from a startling difference in revenue this is especially notable when looking at TikTok compared to mobile games, which have historically ruled the roost when it came to one-time spends and purchases. Naturally, certain apps such as Netflix and YouTube stand on their own with income from subscriptions, a monetisation model that mobile games have largely left on the table.
However, for TikTok, as Data.ai specify, this is drastically different. "While nearly 70% of in-app purchase spending in non-game apps comes from subscriptions, TikTok bucks this trend by relying on one-time purchases (typically more popular among gaming) to gift to their favorite streamers."
All in-one place
TikTok's origin as Douyin in China may go some way to explaining this meteoric rise. In China, a number of apps such as WeChat pull double-duty, allowing users to access a huge number of services and enable transactions through them. Video streaming, social media, shopping, even working on the cloud and the use of 'mini-programs' mean that these apps pull in a large amount of revenue.
Although TikTok is much more narrow in comparison, with the addition of mini-games that were trialled in the UK recently, we've seen an increasing focus on adding more activities for users to engage in besides the typical short video-format that has made the platform a success.
For TikTok to dethrone mobile games which have previously been dominant in this mode of monetisation is an example both that nothing remains static, and that no model of monetisation is prohibitive when it's used well.