TikTok has cemented its position as a force in the digital app economy with a hefty $6 billion mobile purchases in 2024, more than double the revenue of any other app including gaming giants. This milestone, reported in Sensor Tower’s Q4 Digital Market Index, underscores the app’s transformation from a purely social media platform to an e-commerce and advertising powerhouse.
TikTok has cemented its position as a force in the digital app economy with a hefty $6 billion mobile purchases in 2024, more than double the revenue of any other app including gaming giants. This milestone, reported in Sensor Tower’s Q4 Digital Market Index, underscores the app’s transformation from a purely social media platform to an e-commerce and advertising powerhouse.
The $6 billion revenue is a 36% increase from the previous year and most notably, TikTok, along with its Chinese counterpart Douyin, became the first non-gaming app to reach this level of annual in-app purchase revenue. In comparison, the next highest-earning app, Monopoly GO, generated $2.6 billion in the same period.
This surge in revenue is part of a broader trend in the mobile app market, where global in-app purchase revenue reached $39.4 billion in Q4 2024, marking a 13.5% year-over-year increase.
In particular, non-gaming apps saw faster growth, with revenue up 28.2% to $19.2 billion, narrowing the revenue gap between apps and games to only $1 billion.
TikTok’s Personalised Discovery
One key aspect of TikTok’s commercial success is because of its unique approach to product discovery. According to recent Ipsos research commissioned by the app, 73% of TikTok shoppers appreciate their personalised recommendations, with three-quarters using it as their go-to source for discovering new brands and products.
The For You feed allows users to encounter products tailored to their interests with 68% of shoppers saying this tailored content helps them with product discovery.
Additionally, nearly 1 in 4 users initiate a search within 30 seconds of using the app, suggesting its approach to discovery helps drive sales in-app.
And it does translate into sales, with 70% of TikTok shoppers reporting purchases after viewing ads or shoppable content on the platform.
Customers Trust TikTok
TikTok’s emphasis on platforming authentic content contributes massively to its in-app purchase success. The Ipsos study found that 74% of users perceive creator content as authentic, a higher percentage than other platforms.
For example, Aaron Jones, VP of E-commerce & Media for Liquid IV, explained how this belief in creators drove sales:
“An affiliate creator created an honest review that took off, resulting in a sales lift across omnichannel and a full sell out of the flavor with over 59K total orders on TikTok Shop. Of the purchasers, 88% were new customers.”
This is only one example, but highlights the lucrative opportunities for brands looking to market their products on TikTok.
How Brands Can Be Strategic with TikTok
For marketers, this news brings opportunities to leverage TikTok with effective strategies. The Ipsos research highlighted three:
- In-App Commerce: By utilising TikTok Shop features like shoppable videos, LIVE Shopping, and affiliate partnerships you can capture immediate purchases.
- Always-On Engagement: Maintaining consistent engagement through full-funnel experiences will connect TikTok interactions to external purchases.
- Drive Commerce Everywhere: Create seamless journeys that integrate a hybrid of physical and online environments to improve the overall customer experience.
These strategies align with the TikTok’s strengths in personalised discovery and authentic content, enabling brands to effectively reach and convert their target audiences.
TikTok’s Influence on the Digital Advertising Landscape
TikTok’s rise has significant implications for the broader digital advertising market. Its innovative monetisation strategies and strong ROI metrics are prompting advertisers to reconsider their spending allocations. A study by Dentsu revealed that TikTok provided the best short-term ROI in Nordic markets, with brands earning nearly 12 times their initial investment within six weeks.
Furthermore, TikTok’s success is challenging the dominance of traditional digital advertising leaders like Google and Meta. Advertisers are increasingly shifting budgets toward platforms like TikTok, Instagram, Amazon, and Netflix, while reducing spending on Google Search, Facebook, and Twitter.
TikTok’s achievement of $6 billion in annual in-app purchases marks a significant milestone in the evolution of social commerce. By leveraging personalised discovery, authentic content, and innovative commerce features, TikTok has redefined the digital shopping experience. As the platform continues to grow, it offers valuable opportunities for brands to connect with consumers in meaningful and profitable ways.
