ByteDance 2020 revenue doubles to $37 bn in stay-at-home economy

Douyin, which is the largest short-video app in China by user numbers, also announces a partnership with CCTV New Year’s Gala, the country's biggest TV spectacle, after launching its own payment function last week

ByteDance 2020 revenue doubles to $37 bn in stay-at-home economy
People walk past a logo of Bytedance, the China-based company which owns Douyin and the short-video app TikTok, at its office in Beijing, China on July 7, 2020. File photo by Thomas Suen/ Reuters.

(ATF) Revenues of TikTok’s parent company ByteDance more than doubled to $37 billion last year on the back of significant growth of ad sales over the Douyin app, the Chinese version of TikTok, which offset the impact from India's ban on TikTok and the US move to do the same, sources said.

Meanwhile, Douyin, which is already the largest short-video app in China by user numbers, has announced a partnership with CCTV New Year’s Gala and Hong Kong movie star Andy Lau after launching its own payment function last week.

“Due to the coronavirus crisis, people tend to stay at home rather than going out, and their use of Douyin has increased significantly,” a source from ByteDance told Asia Times Financial.

Douyin, which ByteDance launched in 2016, is China’s largest short-video app used by 62.8% of all short-video users as of September 2020, according to CSM Media Research. Its rival Kuaishou Technology, which is planning the biggest Hong Kong IPO in a year, is used by 42.6% of all short-video users, and there’s a large overlap between the pair’s user base.

The source confirmed that ByteDance’s 2020 revenue figure of $37 billion reported by The Information was accurate, and said the Trump administration’s threat of banning TikTok in the US had not yet had a significant negative impact on the internet giant’s business.

Its business in India, however, was pretty much “gone” after the Modi government banned TikTok, he said, following a border skirmish last June.

While various media reports last October said ByteDance was in early talks about listing list some of its businesses, including Douyin and news aggregation service Jinri Toutiao, the source told ATF that ByteDance’s IPO had been postponed. “We’re not considering an IPO at the moment,” he said.

Deals with CCTV and Andy Lau

In the meantime, Douyin has reached an advertising deal with CCTV to be its sole partner for “interactive red packets” at the CCTV New Year’s Gala, according to an announcement by CCTV’s head office via its WeChat channel on Tuesday.

Douyin will be giving away digital money gifts totalling 1.2 billion yuan (US$185.6 million) during the CCTV New Year’s Gala – the most watched show of the year, which attracted 1.2 billion viewers during Chinese New Year in late January 2020 Tencent’s WeChat Pay obtained a significant tailwind in 2015 from being the exclusive red packet partner for the show in 2015.

This will be second time that Douyin features at the Gala following its debut in 2019 as the Gala’s social media partner.

With over 3,000 celebrities on its platform, Douyin has also signed with Hong Kong-born actor and singer Andy Lau Tak-wah to launch its first social media channel in Chinese language. The channel, launched on Wednesday, has attracted 14 million followers in about 16 hours. 

While TikTok is what ByteDance is best known for globally, the app contributes little to the Chinese company’s revenues overall, according to a Reuters report late last year. 

Douyin contributes nearly 60% of ad revenues, followed by news aggregator Jinri Toutiao at 20% and long-form video platform Xigua at less than 3%. ByteDance’s total revenues for 2019 were $16 billion, according to the report.

Besides TikTok, Douyin, Jinri Toutiao and Xigua, ByteDance also operates the enterprise collaboration platform Lark and social media platform Helo, among others.

As online education saw significant growth in China during the pandemic, ByteDance launched its ed-tech brand Dali Education.

It also last week launched its e-wallet Douyin Pay and added it to its short-video app to compete with Alipay and WeChat Pay, which collectively take up over 90% of China’s digital payments market.

TikTok case in limbo in US court

ByteDance has been in talks for months to close a deal with Walmart and Oracle to shift TikTok’s US assets into a new entity to address security concerns raised b former US president Donald Trump. 

But in September last year, US District Court Judge Carl Nichols in Washington blocked the Commerce Department order hours before it was due to prohibit new downloads of the Chinese-owned short video-sharing app. The ruling has been appealed, but US circuit courts may be waiting for the Biden administration to clarify its stance on whether the department should proceed with the proposed ban.

Meanwhile, India banned TikTok and 58 other Chinese apps in June last year when political tension soared after a deadly clash on their disputed border in the Galwan Valley. 

ByteDance, which had committed to spend $1 billion on TikTok in India, is cutting the size of its 2,000-plus workforce in India amid uncertainty on when it will make a comeback, Reuters reported on Wednesday, citing an internal memo of the company.

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China Bytedance 2020 profit revenue doubles US$37 billion Covid Douyin ads New Year Gala deal Andy Lau TikTok India ban US court case Jinri Toutiao Xigua Douyin Pay