Sandy Saputra, 19, who is one of TikTok's biggest Indonesian stars, is seen on his smartphone dancing as he records a video using the app in Jakarta, Indonesia, July 24, 2020. Picture taken July 24, 2020. REUTERS/Willy Kurniawan - RC2PMI9A7A06
HONG KONG, Jan 21 (Reuters Breakingviews) - If ByteDance had a tough 2021, the year ahead looks even more bleak. The TikTok parent grew annual sales 70% to $58 billion, Reuters reported read more , citing sources. Granted, that sounds impressive, but it’s slower than the triple digit pace in the previous year and comes mostly from its home market where the business is set for a tough 12 months or more.
The 10-year-old company has been caught out by China's regulatory clampdowns alongside peers like Alibaba (9988.HK) and Tencent (0700.HK). In May, co-founder Zhang Yiming abruptly stepped down as chief executive. Just months later, finance chief Shou Zi Chew left the group to focus on running TikTok as part of a broader corporate overhaul announced in November read more .
In the meantime, the company's sprawling businesses in online videos, gaming and more have been whacked by new rules from Beijing. An overnight decision to ban for-profit after-school tutoring, for instance, forced its once-promising education unit to lay off staff and pare back operations. ByteDance is also planning to spin off read more its real-estate listing service and recently shrank its investments team read more .
More bad news awaits for the privately held company, which was valued at $300 billion based on recent secondary-market trades. A weakening domestic economy looms large; online advertising sales are already showing signs of strain, with 2021 growth dipping to 9.3% from 13.8% a year earlier, per Reuters. ByteDance's crown jewel and main money spinner, viral video-app Douyin, will also be constrained by the latest rules ranging from better data privacy protections to curbs on how companies can use algorithms to hook in users.
That leaves TikTok, the global version of Douyin, as a rare bright spot. The company wants to triple advertising revenue on the app this year from $4 billion in 2021, according to Chinese news outlet LatePost. Maintaining TikTok’s momentum overseas will be key and might even take the sting off an otherwise torrid year ahead.
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(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)
- Revenue at China's ByteDance grew 70% in 2021 to around $58 billion, Reuters reported on Jan. 20, citing sources.
- ByteDance, which owns video app TikTok and its Chinese version Douyin, was last valued at about $300 billion, based on recent trades in the private equity secondary market, according to Reuters.
Editing by Antony Currie and Katrina Hamlin
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