TikTok’s revenue in Europe grew 545% to $170.8 million in 2020, but the company’s losses continued to pile up to $644.3 million.
|TikTok’s loss increased 5 times to 644.3 million USD in 2020. Photo: AFP|
According to the profile that TikTok submitted to the UK Business Registry (Companies House) on October 4, this business has invested heavily to expand its business in the European market, in an effort to compete. with many big-name competitors like Facebook, Instagram, YouTube, and Snap.
TikTok’s losses jumped to $644.3 million in 2020, 5.4 times the $118.7 million figure in 2019. However, these results “reflect a period business good growth,” a TikTok spokesperson told CNBC.
“We’ve seen a significant increase in revenue thanks to a thriving user community, and we’ve continued to invest heavily in building a strong foundation for long-term success,” TikTok said.
Staffing costs are one of TikTok’s biggest expenses. Number of employees of TikTok in the European market increased by more than 1,000 people, to 1,924 in 2020, from 208 in 2019.
TikTok declined to disclose the total number of employees globally. But in July, TikTok announced its intention to increase staffing for the US market to 10,000 people, from 1,400 at present.
In addition to the burden of personnel costs, TikTok also spends large amounts on sales and marketing. The total spending for these two items amounted to 344.9 million USD in 2020, an increase of 3 times compared to 2019.
Number of users TikTok boomed in the past 3 years. Last week, the short video app announced it had hit 1 billion monthly regular users, a 45% increase from July 2020.
The growth rate of TikTok users increased rapidly. In January 2021, the total number of TikTok users globally reached about 55 million. This number jumped to 271 million in December 2018 and increased tenfold to 507 million by the end of 2019.
Last summer, TikTok said the number of regular users of the app had reached 700 million.
However, the company is aware that user growth will not last forever, while business risks are always lurking. They are facing stiff competition from technology companies that develop social platforms based on digital content. In fact, Facebook and Snap are TikTok’s biggest rivals, and they’re all vying for ad revenue.
The scale of operations has increased rapidly, making online video platforms like TikTok fall into the legal sights of many countries in recent years. Under the “risk assessment” section of its application to the UK Business Registry, TikTok notes that it is “subject to current and new laws within a legal framework that changeable”.
Developed by Chinese technology company ByteDance, TikTok has faced many ups and downs in recent years, notably that the US government under former US President Donald Trump pressured to ban TikTok from operating in this market on the grounds that TikTok’s collection of user data could not be effective. used as a national security risk to the United States.
The Trump administration then forced Tiktok to sell its business in the US market to American businesses if it wanted to continue to operate widely in the market. At that time, American software corporation Oracle emerged as a “trusted technology partner” of TikTok.
However, when Joe Biden was elected President and took over the White House, TikTok was allowed to continue operating as usual.