TikTok’s turnover in Europe surged nearly six-fold in 2021

TikTok elevated its European turnover practically six-fold in 2021 however its losses grew by a 3rd because the fast-growing social media platform bolstered its providing to advertisers and employed hundreds extra employees the world over.

The Chinese language-owned community reported a turnover of greater than $990mn for the calendar yr ending December 31 2021, in contrast with $172mn the earlier yr, in line with filings from the UK’s Firms Home.

Its pre-tax losses have been $896mn, up greater than a 3rd, primarily resulting from elevated spending on employees.

Development has been pushed by TikTok’s flourishing consumer base, which is estimated to be within the billions, elevated promoting spending, in addition to improved concentrating on of adverts which might be aimed toward customers of the short-video platform.

TikTok is owned by Beijing-based ByteDance, which raised $5bn in December 2020 at a $180bn valuation. The submitting pertains to TikTok operations for customers in Europe, together with the UK. These now have a month-to-month common of 4,396 staff, up greater than 3,000 since 2020.

Promoting and advertising bills have been up practically 90 per cent to $666mn, whereas administrative bills grew nearly 30 per cent to $212mn.

Income was largely generated from the EU, accounting for $532mn, and the UK, which was $279mn. The figures the yr earlier than have been $114mn and $52mn respectively.

Promoting is a vital income driver for TikTok, much like social media rivals Meta and Twitter, and amounted to greater than $802mn of its annual turnover, a fivefold improve from the yr earlier than. The corporate mentioned it had grown its gross sales and accounts groups to supply “enough assist to advertisers”.

TikTok has been experimenting with ecommerce since final yr as a type of extra income, via shoppable hyperlinks on-screen. However the “TikTok Store” characteristic has been hit by inside and exterior difficulties within the UK after a number of Monetary Occasions investigations revealed an exodus of employees. Manufacturers and influencers additionally left the scheme because it failed to realize traction with shoppers.

On Saturday, the FT revealed the corporate deliberate to broaden TikTok Store into North America for the vacation season, outsourcing its dwell buying expertise to an LA-based firm, in line with individuals conversant in the plans.

TikTok Store is at the moment out there within the UK, Thailand, Malaysia, Vietnam, Singapore, the Philippines and Indonesia.

“The dimensions of TikTok’s consumer base and the customers’ stage of engagement are essential to our enterprise, which proceed to be considerably decided by our capability to retain our current customers, preserve them engaged and purchase new customers in a cost-efficient method and our capability to draw, domesticate and retain content material creators to contribute content material,” the corporate mentioned within the submitting.

One of many methods it rewards influencers who create content material for the app is thru digital items, which the corporate additionally derives income from.

Throughout dwell broadcasts, influencers can obtain objects similar to digital roses, hearts and pandas — and convert them into Diamonds, a TikTok foreign money, which might then be exchanged for actual cash. TikTok takes a 50 per cent fee on the cash spent on digital items, in line with creators on the platform. The corporate doesn’t disclose the monetary breakdown of video items.