TikTok Aims to Pass 1B Global Daily Active Users, to Start E-Commerce in Brazil
ByteDance’s TikTok has set a goal to reach 1.05 billion daily active users (DAUs) globally by the end of 2022. The popular short video platform currently has more than 800 million DAUs, LatePost reported on October 17.
There are only four platforms with over one billion DAUs in the world – Facebook, WhatsApp, Instagram and YouTube. A TikTok insider said the company hopes that TikTok’s penetration rate overseas will eventually be comparable to Douyin’s in China. TikTok’s current global penetration rate is less than 20%, while Douyin’s domestic rate is close to 54%. TikTok would need to attract more than 2 billion DAUs around the world in order to reach that goal.
Since this year, in order to further improve business growth and management efficiency, TikTok has made some adjustments at the organizational level. TikTok has integrated the same type of markets to form six regions: Japan and South Korea, South Asia, Europe, the Middle East, Latin America, and the one integrating the United States, Canada and Australia.
The platform’s growth center, which was originally responsible for the gathering of TikTok users around the world, has been withdrawn. TikTok has also received support from Douyin in terms of technology and business strategy. Kelly Zhang, CEO of Douyin Group, will intervene and follow up on some of TikTok’s business progress, such as livestreaming.
TikTok’s users have grown rapidly, but it has not received revenue to match the increase. ByteDance CEO Liang Rubo said in September that the commercialization of TikTok is currently slower than expected. TikTok’s revenue in 2021 is around $4 billion, with a target of $12 billion in 2022.
A TikTok insider said that starting from the third quarter of this year, the team already needs to calculate cost per acquisition and the retention of new users. A senior executive at ByteDance’s commercialization department said at a recent internal meeting that TikTok should further acquire those with more spending power, as they are more able to attract advertisers and bring in revenue.
TikTok has also continued to expand its e-commerce business. The platform has posted jobs on LinkedIn and plans to provide warehousing, fulfillment and return services for sellers. Many of the open positions are based in Seattle, the US headquarters of e-commerce giant Amazon. TikTok will open a local e-commerce business in the United States by the end of 2022, and it will only sell goods from local merchants or importers in the United States.
TikTok has recently advanced its entry into the Brazilian market – from the second half of 2023 to the first half of the year. Jared Huang, the former head of international products of Didi, will be in charge of the market operation of TikTok e-commerce in Brazil, reporting to Kang Zeyu, the top person in charge of TikTok e-commerce.
Brazil will be the ninth country in which TikTok’s e-commerce business has entered. TikTok has recently increased the priority of the Brazilian market. A TikTok e-commerce insider analyzed that an important reason is that fast fashion e-commerce platform SHEIN has been actively expanded in the country. Although SHEIN and TikTok have different sales models, both of them focus on women’s clothing and beauty products. It is difficult for TikTok to provide users with a differentiated purchasing experience in a short period of time.
According to eMarketer data, Brazil ranks fourth among the countries with the fastest growth in the global e-commerce market in 2021. Last year, the scale of e-commerce in Brazil was close to $34 billion, and the compound growth rate is expected to exceed 20% from 2022 to 2025.
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The Brazilian e-commerce market is relatively fragmented. Mercado Libre has a market share of about 33%, followed by retail company B2W’s Americanas. Other Brazilian e-commerce players have relatively small market shares. After operating in Brazil for three years, Shopee, which is now experiencing layoffs and business reductions, accounts for only 5%.