What happened: TikTok and Douyin have brought in an estimated $75 million (around RMB 500 million) through in-app sales of virtual coins, according to mobile app intelligence firm Sensor Tower. TikTok users in the US contributed the most to the sales, purchasing close to $41.3 million worth of coins, or 55% of the global total. About 23% of the revenue came from China’s iOS users, who use the app’s Chinese version, Douyin. The figure doesn’t include revenue from China’s third-party Android stores. Both TikTok and Douyin users can purchase virtual coins and use them to exchange gifts that can be given to livestreamers.
Why it’s important: The substantial revenue from virtual coins, which received little promotional effort from Bytedance, highlights the popularity of Douyin and TikTok. In addition to the high total revenue, monthly global in-app sales revenue is also seeing strong growth—the number surged by almost 250% year-on-year to $5.5 million in February 2019. While in-app purchases are still insignificant compared to Bytedance’s advertising business and would contribute only minorly to the company’s ambitious RMB 100 billion revenue goal for 2019, they could potentially become a much more significant revenue source given the right strategies.