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ByteDance Ltd., the parent company of the globally popular social media platform TikTok, has reported a remarkable surge in sales for the year 2023, exceeding an impressive $110 billion. According to sources familiar with the matter, this surge not only solidifies ByteDance’s position as one of the leading technology companies globally but also places it on the brink of overtaking its arch-foe, Tencent Holdings Ltd.
The growth trajectory mirrors the 30% pace achieved in 2022 when ByteDance reported sales surpassing $80 billion. This remarkable performance is particularly noteworthy considering the economic challenges in China and heightened scrutiny and restrictions faced in key markets ranging from the United States to India.
ByteDance, the world’s most valuable startup, has strategically leveraged the success of its social video services, TikTok, and its Chinese counterpart Douyin, to expand into the burgeoning e-commerce sector. This move is indicative of TikTok’s emerging e-commerce business driving growth during a period of economic uncertainty.
Despite being a private firm with fewer disclosure and audit requirements compared to its listed counterparts, ByteDance’s scale suggests that it has become one of China’s largest corporations by revenue in 2023.
While specific profitability figures for the current year are not disclosed, in 2022, the company’s earnings before interest, tax, depreciation, and amortization surged by an impressive 79% to approximately $25 billion.
ByteDance’s spokesperson declined to comment on the latest financial developments.
ByteDance’s strategic focus on its Chinese home base is evident as Douyin transforms into an all-in-one platform with features such as food orders, flight tickets, and hotel reservations, encroaching on the territory of industry giants Alibaba and Meituan.
Internationally, TikTok is adopting a similar strategy by blending videos with shopping, as seen in its control of GoTo’s e-commerce unit Tokopedia through a $1.5 billion deal.
However, ByteDance faces challenges in the US, where TikTok is still addressing national security concerns due to its Chinese ownership. The company has established a standalone team to manage local user data, navigating issues that reached a peak in March when American lawmakers grilled TikTok CEO Shou Chew in a five-hour hearing. Washington’s focus has since shifted to other matters, such as semiconductors and venture funding.
The company has ventured beyond its social media apps with limited success, as seen in the discontinuation of its game development business this year.
However, the path to its eventual stock market debut is still unclear. In the latest round of investor buybacks, ByteDance is offering to purchase up to $5 billion from shareholders at a valuation of $268 billion, approximately 11% lower than the price in a similar program in 2022.
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