Social media use has exploded. Since it's humble beginnings this part of the tech world has grown leaps and bounds. It first started out as a way to help family and friends connect, regardless of where they were located. Since then, businesses tapped into the potential to reach new and existing consumers.

There's no doubt that Facebook is, by far, the most popular social media site in the world. The company boasts about 2.5 billion active users who log into the site every day. The company also owns two other popular social media sites—photo-sharing site Instagram and messaging app WhatsApp. While Facebook continues to dominate the social media marketplace, other names continue to pop up to try to eat away at its market share and take the top spot. One of the newest players available is TikTok. Read on to find out more about the company and what makes it so popular.

Key Takeaways

  • TikTok allows users to watch, create, and share 15-second videos shot on cellphones.
  • The app was launched in 2016 by startup ByteDance in China.
  • Available in more than 150 different markets, TikTok has offices in Beijing, Los Angeles, Moscow, Mumbai, Seoul, and Tokyo.
  • The app hit one billion downloads as of February 2019, with two million downloads alone as of January 2020.

What Is TikTok?

TikTok is a popular social media app that allows users to watch, create, and share 15-second videos shot on cellphones. With its personalized feeds of quirky and creative short videos, the app is characterized by its addictive quality and high levels of engagement. Besides adding effects like filters, background music, and stickers to their videos, users can also collaborate on content even if they're in different locations and create split-screen duet videos.

The name TikTok is onomatopoeia for the sound of a ticking clock and represents the short format of the videos. Launched in 2016 by startup ByteDance in China, where it's known as Douyin, TikTok absorbed a similar Chinese video app called musical.ly in August 2018. ByteDance purchased the lip sync-app for an estimated $1 billion the previous year.

ByteDance was reportedly valued at $75 billion as of 2018, making it the most valuable startup in the world. It owns several other apps and raised $3 billion from investors, including SoftBank Group, KKR, K3 Ventures, TCV, and General Atlantic, according to Crunchbase.

ByteDance was reportedly valued at $75 billion as of 2018.

The company's popularity is helping it branch off globally. TikTok has offices in Beijing, Berlin, Jakarta, London, Los Angeles, Moscow, Mumbai, Sao Paulo, Seoul, Shanghai, Singapore, and Tokyo.

User Base

TikTok is one of the world's most popular social media apps and is available in more than 150 different markets and in 75 languages. The app hit close to two billion downloads as of March 2020, with 104.7 million downloads alone as of January 2020, according to market analyst Sensor Tower.

Here's a breakdown of some of the app's most notable statistics:

Business

Like many other social media sites, TikTok makes money from in-app purchases. Users can buy coins priced from 99 cents to $99.99 and use them to tip their favorite creators on the platform. The company grossed $80 million from in-app purchases globally, according to an April 2019 report from Sensor Tower. In Q1 2019, user spending reaching an estimated $18.9 million globally—222% more than the app grossed during the same period last year. 

TikTok also began testing ads on the app. The company allows marketers to connect with users and consumers in more than 20 different markets including North America, India, Russia, and Japan.

A social media trend that has helped the app gain attention worldwide is viral meme challenges. The company has also pursued an aggressive marketing strategy that involves getting popular celebrities to use the app and advertising on competing platforms like Instagram and Snapchat (SNAP). Facebook launched a TikTok clone called Lasso in 2018.

Controversy and Bans

Despite its popularity, the app isn't immune to controversy. The Intercept reported that a Brazilian user livestreamed his suicide on TikTok in 2019. According to the report, the video was left up for more than an hour before the company noticed and removed it. But officials at TikTok waited a few hours after removing the video from its site before contacting authorities.

In the first three months of 2019, an estimated 88.6 million people downloaded the app in India, according to Sensor Tower. This was 8.2 times more installs than during the same period last year. But in April 2019, the app was taken off the Apple App Store and Google Play in India after a state court asked the federal government to ban it because it is used to distribute inappropriate and pornographic material and could make young users vulnerable to sexual predators.

TikTok is banned in neighboring Bangladesh. It was also briefly banned in Indonesia for "pornography, inappropriate content, and blasphemy." The ban was overturned a week later after the company promised to take all objectionable content off the platform and set up a local office to monitor and sanitize content, according to Reuters.

In February 2019, the company paid $5.7 million in the U.S. to settle allegations that it illegally collected personal information from children. It is the largest civil penalty ever obtained by the Federal Trade Commission (FTC) in a children’s privacy case.