ByteDance – the owner of the TikTok app – is on track to generate at least 180 billion yuan ($ 27.2 billion) in advertising revenue in China this year, cementing its second position in the digital advertising market in China.
Reuters previously reported that the company’s overall revenue target for 2020 is about $ 30 billion, which means that ByteDance’s advertising revenue in China, which accounts for the bulk of its total revenue, is in line with the company’s plan.
ByteDance is known worldwide for its Tik Tok app, but it contributes little to the Chinese company’s overall revenue.
Douyin, the Chinese version of TikTok, contributes nearly 60 percent of advertising revenue, followed by news aggregator Jinri Toutiao with 20 percent, and long-form video platform Xigua with less than 3 percent.
ByteDance surpassed Baidu to become the second digital advertising operator in China in the first half of 2019.
ByteDance earned $ 7.6 billion in total digital advertising spend in the country, while Alibaba came in first place with $ 10.9 billion.
The gap between ByteDance and Alibaba has narrowed this year, and Reuters reported that ByteDance generated a total revenue of $ 16 billion in 2019, even though the company did not disclose ad revenue for 2019.
As ByteDance strives to fulfill its global ambitions, it is looking to ramp up investment in three business priorities next year – namely: e-commerce, search, and feature-length videos.
The company plans to invest 10 billion yuan in the Xigua video app next year, with the goal of increasing the number of daily active users to more than 100 million.
Douyin’s e-commerce platform is expected to reach about 150 billion yuan in total merchandise value this year.
In the search arena, ByteDance launched the Toutiao search engine aimed at the Chinese market last August, in order to compete with the Chinese search engine giant Baidu.
ByteDance has hired experts, including former Baidu executives, to improve its platform architecture and search results collection.
Reuters reported that ByteDance is in talks with investors to raise about two billion dollars in a new financing round, which could bring its market value to $ 180 billion, more than double its valuation in the last fundraising round two years ago.