While TikTok is what ByteDance is best known for globally, the app contributes little to the Chinese company's revenue overall. It relies on Douyin, the Chinese version of TikTok, for nearly 60% of ad revenue, followed by news aggregator Jinri Toutiao for 20% and long-form video platform Xigua for under 3%, according to one of the sources.
ByteDance declined to comment.
The group is one of only a few Chinese companies with global reach, but it is currently battling plans to force it to divest TikTok's U.S. operations because of Washington's national security concerns over the data of more than 100 million U.S. users.
STRENGTH AT HOME
ByteDance overtook Baidu to become China's second largest digital ad player in the first half of 2019 with 23% ($7.6 billion) of the total digital ad spend in the country, according to consultancy R3, with Alibaba Group in first place, raking in $10.9 billion or 33%.
The gap between ByteDance and Alibaba has narrowed this year, according to the second source. Although ByteDance did not disclose ad revenue for 2019, Reuters has reported it generated total revenue of $16 billion last year.
As ByteDance pursues its global ambitions, it is also looking to step up investment in three main areas at home next year - e-commerce, search and longer-form videos, the source said.
It plans to invest around 10 billion yuan, including the value of traffic and advertising support to partners, on Xigua next year, its longer form video app, with the aim of increasing the number of daily active users to over 100 million, the first source said.
Douyin's e-commerce platform, one of the fastest-growing sectors within the company, is projected to hit around 150 billion yuan in gross merchandise value (GMV) this year, according to both sources, who declined to be named as the information had not been made public.
The final numbers will be adjusted at the end of the year to take account of key campaigns around events such as year-end sales, which haven't been officially launched yet, the people said. Douyin held its first major shopping festival on Wednesday, in tandem with Alibaba's mega shopping event Singles' Day.
Douyin's rival Kuaishou, which filed for a Hong Kong initial public offering last week, reported total revenue and ecommerce GMV for the first half of this year of 25.3 billion yuan and 109.6 billion yuan respectively.
In the search arena, ByteDance launched Toutiao Search for the Chinese market last August to take on China's search engine Baidu. It has since hired experts including former Baidu executives to improve its platform's architecture and range of search results.
ByteDance is in talks with investors to raise around $2 billion in a new financing round that will value it at $180 billion after the investment, more than double its valuation in the last fundraising round two years ago, Reuters has reported.
It is also exploring whether to pursue a standalone public listing for Douyin or list some of its Chinese operations including Douyin and Toutiao as a package in Hong Kong or Shanghai.
($1 = 6.6204 Chinese yuan renminbi)
(Reporting by Julie Zhu in Hong Kong and Yingzhi Yang in Beijing; Editing by Brenda Goh and Elaine Hardcastle)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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