So, do you post your dancing videos on TikTok?
No? You don’t? You don’t even know what TikTok is?
That’s fine … because chances are, your son or your daughter, or your niece and nephew, and their friends do.
According to a report in The Guardian, ByteDance, the Chinese parent of TikTok, more than doubled its revenues last year as usage of the hugely popular video app exploded around the world.
The company, which last year weathered pressure from Donald Trump to sell its US operation as part of a trade war with China, reported a 111% increase in revenues to US$34.3 billion.
ByteDance also reported a 93% increase in gross profit to US$19 bilion, according to an internal memo released to staff, The Guardian reported.
There has been stratospheric growth in user numbers for ByteDance since TikTok launched worldwide only four years ago, hitting 1.9 billion active monthly users at the end of last year.
This includes the Chinese version of TikTok, called Douyin, and products such as the news aggregation app Toutiao.
TikTok has proved to be a social media juggernaut, drawing hundreds of millions of users, most of whom are in the advertiser hotspot of 12 to 24 years old, to short videos from creators including the singer Doja Cat, the social media personality Charli D’Amelio and the illusionist Zach King.
Overall, ByteDance reported a net loss of US$45 billion last year. The company attributed this to a one-off accounting adjustment, and not operational performance.
The operating loss was US$2.1 billion, compared with US$684million in profit in 2019, and was mainly down to the cost of share-based compensation for shareholders.
The rapid growth of the company, which is Beijing-based and privately owned, has led to analysts estimating its value at up to US$100 billion.
The company recently hired the former Xiaomi executive Shou Zi Chew to be its new financial officer, adding to speculation that it may be considering an IPO.
The Trump administration branded ByteDance a national security threat and said it could shut down its US operation if it was not sold to a buyer. Suitors including Microsoft and Oracle emerged but the change in administration at the White House put an end to Trump’s agenda.
Joe Biden subsequently revoked Trump’s executive order to ban TikTok and the Chinese app WeChat in the US.
On Thursday, Reuters reported that an executive order signed by President Joe Biden earlier this month would force some Chinese apps to take tougher measures to protect user data if they wanted to stay in the US market.
It came after President Biden revoked an executive order from his predecessor Donald Trump that banned Chinese apps TikTok and WeChat in the US.
The ban faced a series of legal challenges and never came into force.
Instead, the US Department of Commerce said it would review apps designed and developed by those in “the jurisdiction of a foreign adversary,” such as China.
It should use an “evidence-based approach” to see if they pose a risk to US national security, President Biden said.
In China, ByteDance has been caught up on a broader regulatory crackdown on the country’s technology sector.
Douyin, along with 104 other apps, were called out by China’s Cyberspace Administration of China for the illegal collection of personal data and asked to rectify the issues.
The company will also undergo a key management change this year.
Zhang Yiming, the co-founder of ByteDance, will step down from his role as CEO by the end of the year and move into a key strategy role. Another co-founder, Liang Rubo, who is currently head of human resources, will take over as CEO.
“The truth is, I lack some of the skills that make an ideal manager. I’m more interested in analysing organizational and market principles, and leveraging these theories to further reduce management work, rather than actually managing people,” Zhang wrote in a message on the company’s website.
“Similarly, I’m not very social, preferring solitary activities like being online, reading, listening to music, and contemplating what may be possible,” he added.
Sources: The Guardian, CNBC, Reuters, BBC News