Blog

An app best known for dancing videos and a valuation worth more than Twitter and Coca-Cola!

So what is this app?

TikTok is a media app used for creating and sharing short videos. It was initially exclusively released in China, in 2016 as Douyin. A year later in 2017, its parent company ByteDance acquired Musical.ly, an already popular app in the US and around the world. This was in an effort to tap into the international market, and it was successful. In 2021, ByteDance has been valued at approximately $250 billion by Bloomberg.

TikTok’s Influence

Latest statistics show that TikTok was the most downloaded app in 2020, with over 850 million downloads globally. TikTok currently boasts 689 million monthly active users, an incredible feat achieved in just under three years. It took Instagram more than six years and Facebook more than four years after launch to achieve this. These numbers do not even include users in China, as the app still goes by the name Douyin in China.

Studies done on the parent app Qustodio, show that in 2020, kids aged 4 – 15 spent an average of 95 minutes a day on TikTok, narrowly behind the 97 average minutes spent on YouTube. Data also shows that 55% of kids prefer to watch videos on TikTok rather than YouTube, and 18% of global internet users aged 16 – 64 use TikTok.

So why is TikTok’s adoption rate much higher than other already established platforms? Well, these positively high numbers have been attributed to:

• Shorter video content
• More people generally being on social media now (especially since Covid-19)
• The more informal ‘vibe’ on the platform
• Not flushed with ads like other apps

TikTok has attracted many celebrities to the app like Will Smith, Selena Gomez, The Rock, Billie Eillish, Jimmy Fallon and many more. Charli D’Amelio (17) is the most followed personality on the app and has approximately 116 million followers & 9.4 billion likes. She accomplished these tremendous milestones in just over a year of using the app.

Use of Artificial Intelligence

TikTok mitigates its risks and optimises the data it collects with the use of Storm Cluster AI, to process real-time sample data  –Clicks, Likes, Comments and Shares. What differentiates their algorithms from other platforms like Netflix, YouTube, and Facebook, is that TikTok decides what content to present to each user’s explore hub based on the processed data from their AI. This is quite a change from the other platforms which present recommendations based on the user’s choices. The approach, although risky at times, makes it easier for users to access content they like and content they are most likely going to enjoy as well. Advertisers can also better reach their specified target audiences because of TikTok’s AI approach. It has been described by users and businesses as the algorithm with the most potential to market your content.

The extent of TikTok viral nature is evident from the 2020 Grammy Awards. It was confirmed that 4 out of 8 nominations for record of the year were songs that were made massively popular because of TikTok. Similarly, 80% of the songs that charted Number #1 on Billboard’s Hot 100 in 2020 and early 2021 were songs that went viral on TikTok.

Monetisation Opportunities

Monetisation capabilities on TikTok have seen an exponential rise since its launch. Content creators can earn $0.09 per 1000 views on the app; but most of the money earned by creators are through sponsorships, with the biggest stars like Charli D’Amelio netting roughly $54,000 to $97,000 per post.

Finance and Fintech related posts have a massive audience on the platform; the #finance hashtag has more than 990 million views attributed to it while #investing has over 1 billion views. You can understand why companies such as Samsung, Toyota, HP, KPMG, and many more are flocking to the platform. Exposure of this magnitude bodes well for content creators and companies alike.

Localised TikTok

TikTok is yet another app that originates from China that has a firm grip on the technology space. The question now is, how can countries on the African continent, Nigeria as an example, get involved?

How can we go about creating our own versions of social media apps like TikTok that can be adopted on the continent and across the world?

The most notable aspects to consider are the Skills, Infrastructure, and Market.

Skills: The skillset required to build & manage such a platform is lacking in Nigeria.

Infrastructure: Good Internet connection! This is arguably the most important infrastructure that needs to be in place, not just for the developers but also for the users in order to drive adoption. The internet cost in Nigeria and Africa are ‘luxurious’ when scaled to the cost of living.

Market: Comparing the market in Nigeria & Africa to that of other continents could be quite limiting. Statista (2021)[1] states there are estimated only about 33 million active social media users in Nigeria, and only about 150 million users in Africa.

To achieve our own version of TikTok, we would need to overcome these obstacles. And so how do we overcome these obstacles? It starts by asking the right questions.

How do we increase the skillset of our people in the subject areas relating to technology? Maybe if we had a learning/skill building online platform that caters to these subject areas with Africa in focus?

How do we tackle the poor connectivity and exorbitant internet access prices in Nigeria? Could we do this with Elon Musk’s Starlink?

How do we increase the number of users online in our country/continent?

As the world makes more strides with technology, we must find solutions to these questions so we are not left behind. We would love to know your thoughts in the comments section!!

We will be back with more on this in the future!!!

[1] Statista (2021) Total number of active social media users in Nigeria from 2017 – 2021 (in millions) [Online]. Available at: https://www.statista.com/statistics/1176096/number-of-social-media-users-nigeria/ (Accessed: 29 May 2021).