TikTok’s owner ByteDance has overtaken Baidu to become China’s second-largest digital ad player, accounting for 23%, or RMB 50 billion (USD 7.1 billion) of all digital media spend in the country in the first half of 2019, leapfrogging Baidu and Tencent and behind only Alibaba.
The owner of the global short video hit app, which is facing pressure in the US over censorship concerns, achieved 113% growth in ad revenue in the first half compared to the same period last year, according to the China Media Inflation Trend Report 2020 conducted by consultancy R3.
Alibaba Group Holding accounted for 33% of all digital media revenue, worth RMB 72.1 billion, in the first half with Baidu in third place with 17%, or RMB 36.9 billion of revenue. Tencent Holdings was fourth with 14%.
ByteDance’s TikTok has become one of the very few Chinese-owned apps to achieve success outside China. TikTok currently ranks second after American subscription video on-demand streaming service Disney+ in the entertainment category in the US iPhone app store, according to data provider Sensor Tower.
The viral short-video app, wildly popular among teenagers, has however received increased scrutiny from the US over privacy concerns and potential censorship by China.
TikTok, valued at USD 78 billion late last year, has repeatedly defended itself against US allegations saying that it stores US user data locally with backup redundancy in Singapore.
Despite the political pressure, Western social media giant Facebook has taken note of ByteDance’s rapid rise and expansion overseas. Instagram, owned by Facebook, launched a new TikTok-like video-music remix feature in Brazil this month.
“We’re trying to first see if we can get it to work in countries where TikTok is not already big before we go and compete with TikTok in countries where they are big,” Facebook founder and CEO Mark Zuckerberg said of the new service, in a leaked audio recording in October.
Zuckerberg, in the two-hour recording of him speaking to employees, praised TikTok as the first Chinese internet product to successfully go global.
Founded by former engineer Zhang Yiming in 2012, ByteDance booked better-than-expected revenue of between RMB 50 billion to RMB 60 billion (USD 7 billion to USD 8.4 billion) in the first half of this year, according to a September Reuters report, citing people familiar with the situation.
This article first appeared on the South China Morning Post.