TikTok, also known as Douyin in China, is a popular social media app that allows users to watch, create and share 15-second videos shot on cellphones. Besides adding various effects like filters, background music and stickers to their videos, users can also collaborate on content while being in different locations and create split screen "duet" videos. The platform is said to have an addictive quality and high levels of engagement with its personalized feeds of quirky and creative short videos.
The name TikTok is onomatopoeia for the sound of a ticking clock and represents the short format of the videos. Launched by Chinese startup ByteDance in 2016, TikTok absorbed the similar Chinese video app musical.ly in August 2018. Lip sync-app musical.ly was bought by ByteDance for an estimated $1 billion the previous year.
ByteDance is reportedly valued at $75 billion, making it the most valuable startup in the world. It owns several other apps and has raised $3 billion from investors, including SoftBank Group, KKR, K3 Ventures, TCV and General Atlantic, according to Crunchbase.
TikTok hit 500 million active monthly users worldwide in July last year, according to ByteDance. Market analyst Sensor Tower has said the app crossed the one billion mark for worldwide installs on the App Store and Google Play in February. Besides China, it enjoys immense popularity in India, which is where a quarter of its downloads have come from. About 96 million of the downloads have come from the U.S..The company currently has offices in Beijing, Berlin, Jakarta, London, Los Angeles, Moscow, Mumbai, Sao Paulo, Seoul, Shanghai, Singapore and Tokyo.
TikTok recently began testing ads and also makes money on in-app purchases. Users can buy coins to tip their favorite creators on the platform. It has grossed $80 million from in-app purchases globally, according to an April report from Sensor Tower. In Q1 2019, user spending reaching an estimated $18.9 million globally, which was 222% more than the app grossed during the same period last year.
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 Facebook Inc.'s (FB) Instagram and Snap Inc.'s (SNAP) Snapchat. Facebook launched a TikTok clone called Lasso late last year.
Controversy and Bans
In April 2019, the app was taken off the 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. The app has exploded in popularity in India, where it has been downloaded 250 million times as of February 2019. 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.
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, according to Reuters.
In February, 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 in a children’s privacy case.