TikTok hit $9M in in-app purchases last month, up 500% over last year

Popular short-form video app TikTok has been slowly
ramping up its advertising strategy this year as it increases its
focus on monetization. However, the company still generates a
smaller of its revenue from in-app purchases — and that number
hit a high of $9 million in May, according to a report
from Sensor Tower. That represents 500% year-over-year growth from
the $1.5 million spent in May 2018, and 22% growth from April’s
$7.4 million.

Arguably, TikTok’s hasn’t put much emphasis on its in-app
purchase strategy. For now, the Beijing-based app owned by
ByteDance is more heavily focused on driving user growth. It knows
that putting some of its best features behind a paywall could
potentially limit user adoption and engagement — especially as
TikTok looks for growth in emerging markets like India, where

it recently said it has 200 million users
, 120 million who are
monthly actives.

In India, the app overtook Facebook as the most downloaded
social networking app in the first quarter of the year, and is now
looking to pull in more advertisers. The Economic Times
recently reported
brands like Pepsi, Snapdeal, Myntra,
Shaadi.com, and Shopclues have signed on to advertise.

Meanwhile, Indian users only accounted for half a percent of
in-app purchases — just around $45,000, said Sensor Tower.

The lack of spending points to how little TikTok has focused on
virtual goods. Instead of offering its video effects or filters for
purchase, TikTok’s coins are used for buying gifts
which can be sent to live streamers to show support.

Despite TikTok’s inattention to its virtual goods strategy,
iOS users in China spent $5.9 million, of the total $9 million
spent on in-app purchases in May, accounting for nearly 65% of
purchases. In the U.S., both iOS and Android users spent a combined
nearly $2 million, or 22%, of the app’s gross revenue.

TikTok’s installs are continuing to climb, Sensor Tower also
noted.

In May, around 56 million users worldwide installed the app for
the first time — a 27% increase over April. However, new installs
were down by 21% from January’s 70.8 million. To some extent,
India’s brief
ban on the app
impacted these figures — the app likely lost a
potential 15 million new users in April, Sensor Tower had earlier
estimated.

To date, TikTok has seen 1.2 billion installs, up from a billion
at the
end of last year
. This figure doesn’t equate to active user
numbers, however. On that front,
TikTok said last summer
it has 500 million monthly actives, and
hasn’t publicly shared an updated number since. Life-to-date user
spending is currently at $97.4 million, with the app expected to
pass the $100 million milestone this month, the new report
said.

Source: FS – All Tech News 2
TikTok hit M in in-app purchases last month, up 500% over last year