According to Sensor Tower’s Q4 report, TikTok, along with its Chinese counterpart Douyin, generated $6 billion in in-app purchases last year, more than doubling the revenue of any competitor. Digital Market Index.
This represents a 36% increase from the previous year, highlighting TikTok’s expanding financial dominance in the mobile commerce space.
Mobile App Market Growth
Global in-app purchase revenue hit 39.4billioninQ42024,reflectinga13.5150 billion, marking a 12.5% increase compared to 2023.
Non-gaming apps experienced faster growth, with revenue surging 28.2% to 19.2billion.Therevenuegapbetweenappsandgamesnarrowedsignificantlytojust1 billion, down from $5 billion the previous year.
TikTok’s Commerce Transformation
Recent Ipsos research commissioned by TikTok sheds light on how the platform is reshaping consumer behavior in commerce.
The study, which surveyed nearly 4,000 U.S. consumers, found that 73% of TikTok shoppers appreciate the platform’s personalized recommendations. Additionally, three-quarters of respondents agreed that TikTok is their preferred destination for discovering new brands and products.
Discovery Engine Drives Purchases
TikTok’s unique approach to discovery plays a key role in driving in-app sales.
Two primary components of product discovery on TikTok include:
- Personalized For You Feed: 68% of TikTok shoppers say the tailored content enhances their ability to discover new products.
- Intent-Based Search: Nearly one in four users search for something within 30 seconds of opening the app.
This discovery system directly translates into sales. In fact, 70% of TikTok shoppers report making a purchase after encountering an ad or shoppable content on the platform.
The Authenticity Factor
TikTok’s success in commerce is rooted in trust.
According to Ipsos, 74% of users find TikTok’s creator content more authentic compared to other platforms. This sense of authenticity has become a cornerstone of its appeal.
Aaron Jones, VP of E-commerce & Media at Liquid I.V., highlighted how this authenticity drives tangible results:
“An affiliate creator posted an honest review that went viral, leading to a significant sales boost across all channels and a complete sell-out of the flavor. This resulted in over 59,000 orders on TikTok Shop, with 88% of purchasers being new customers.”
Actionable Strategies for Marketers
The Ipsos research outlines three key strategies for brands to leverage TikTok effectively:
- Capture Immediate Purchases with In-App Commerce: Utilize TikTok Shop for shoppable videos, LIVE Shopping, and affiliate partnerships.
- Maximize E-Commerce with Always-On Tactics: Build full-funnel experiences that connect TikTok engagement with external purchases.
- Drive Commerce Everywhere with Hybrid Strategies: Enable seamless transitions between physical and online shopping environments.
Platform Context
iOS dominates in-app revenue, accounting for 70% ($27.5 billion) of total earnings. Meanwhile, Google Play leads in downloads with a 73.6% market share, despite hitting its lowest download count (25.1 billion) since Q1 2020.
TikTok ROI
A recent Dentsu study revealed that TikTok delivers the best short-term ROI for advertisers in Nordic markets. The platform generated an ROI of 11.8, meaning brands earned nearly 12 times their initial investment in sales revenue within six weeks of advertising on TikTok.
Brands that adopted TikTok as an always-on channel, rather than running sporadic campaigns, achieved stronger sales results and higher returns.
Looking Ahead
In 2025, TikTok is set to become an indispensable platform for digital marketers, thanks to its robust monetization strategies, impressive ROI metrics, and growing influence in the commerce landscape.
