(Credit: Transcript by OpenAI Whisper)
ByteDance's Sales Break $110 Billion To Pass Tencent this year ByteDance's limited sales surged in 2023 to more than $110 billion, according to people familiar with the matter. Potentially overtaking ArchFo, Tencent Holdings Ltd. and Assigned TikTok's fledgling ecommerce business is driving growth at a time of economic malaise. The world's most valuable startups' growth broadly match the 30% pace it managed in 2022, when it reported sales in excess of $80 billion, the people said, asking not to be identified as the information is in public. That's despite economic turbulence in China and elevated scrutiny and restrictions in key markets from the US to India. The owner of TikTok and Chinese twin Douyin this year cemented its position as one of China's Internet leaders, alongside Tencent and Alibaba Group Holding Ltd., leveraging the popularity of its social video services to expand into e-commerce and other spheres. At roughly 30%, ByteDance would outpace the projected growth of far more established social media rivals Meta Platforms Inc. and Tencent, which is estimated to generate $86 billion in revenue this year. It's not clear how ByteDance, which is a private firm has far fewer disclosure and audit requirements versus its listed rivals, performed in profitability this year. While its internal numbers haven't been independently audited, the sheer scale suggests the social media juggernaut in 2023 became one of China's largest corporations by revenue. Its earnings before interest, tax, depreciation and amortization surged 79% to about $25 billion in 2022, the Financial Times reported in April, citing investors briefed on the number. A ByteDance spokesperson declined to comment. Alibaba Al's commerce chief splits assets in new shake-up. TikTok shop is looking to beat Amazon on its home turf. ByteDance offers investors a buyback at $268 billion valuation. ByteDance is banking on its Chinese home base to bankroll a global and business expansion in 2024. In China, Douyin is morphing to become an all-in-one platform with built-in features for food orders, flight tickets and hotel reservations, encroaching on the main territory of Alibaba and delivery leader Meijuan. Abroad, TikTok is following that strategy to blend videos and shopping in markets like the U.S. and Indonesia, where it has taken control of GoTo's e-commerce unit Tokopedia. The $1.5 billion deal, which marks one of ByteDance's biggest takeovers in recent years, allows TikTok to restart its online retail service after months of scrutiny by the Indonesian government. In the U.S., TikTok is still working to address concerns around national security due to its Chinese ownership by setting up a standalone team to manage local user data. The hostility reached its peak in March, when American lawmakers grilled TikTok chief executive officer Xu Chu in a five-hour hearing. But Washington quickly shifted to issues like semiconductors and venture funding. Longer term, it remains to be seen if ByteDance can continue to challenge the major incumbents on their turf or make its mark in artificial intelligence. ByteDance has tried to expand beyond the social media apps that pushed its valuation to above $200 billion, the highest of any startup in the world, with limited success. The company this year pulled the plug on its game development business, slashing hundreds of jobs while weighing sales of existing projects. Its chat-GPT-like service, Dabao, competes with a sea of Chinese AI bots funded by well-known venture firms and fellow technology companies. The company founded more than a decade ago by coding wizards Zhang Yiming and Liang Rubo is one of the few remaining Chinese internet IPO candidates, but there's still no clear path to its eventual stock market debut. In the latest round of investor buybacks, it's offering to purchase up to $5 billion from shareholders at a valuation of $268 billion, roughly 11% lower than the price in a similar program in 2022.
3 Key Takeaways:
- ByteDance, the parent company of TikTok and Douyin, saw its sales soar to over $110 billion in 2023, potentially surpassing Tencent, driven largely by the expansion of its e-commerce business through TikTok.
- The company is using its strong base in China to expand globally, offering various services through Douyin and integrating shopping with video on TikTok in markets like the U.S. and Indonesia.
- Despite challenges in diversifying beyond social media and facing national security concerns, ByteDance remains a significant player in the tech industry, with a current valuation of around $268 billion as it proceeds with a $5 billion share buyback program.