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BEIJING, April 3 (TMTPOST)— TikTok parent ByteDance Ltd. is approaching its archrival Tencent Holdings Ltd. by sales in the year 2022, when a wide range of Chinese internet companies were struggling for growth amid macroeconomic slowdown with cost cuts.

Source: Visual China

ByteDance posted annual revenue of more than US$80 billion in 2022, increasing over 30% from about US$60 billion in the previous year, The Information reported, citing people with knowledge of the matter. Most of ByteDance’s growth came from its core advertising business in China, which generated about US$10 billion, approximately 2.5 times greater than the revenue of the business in 2021, according to the report. The report suggested expansion in e-commerce also drives ByteDance. The e-commerce gross merchandise volume (GMV) at Douyin, the sister app of TikTok that ByteDance operates in China, had a strong 76% growth to US$208 billion, The Information reported in January. But the official at Douyin later that month told Chinese media outlets that the news was false.

ByteDance’s sales topped US$80 billion with a yearly growth of 30%, Bloomberg quoted people who saw a recent memo from the company on Monday. Representatives at the TikTok owner didn’t respond to the request for comments on its financials that day. If the reported sales were correct, that is undoubtedly a significant achievement since most of tech companies witnessed more or less slowdown last year. The ad revenue of Facebook parent Meta Platforms Inc. declined 1% to US$113.6 billion in 2022 with a third straight quarterly decline as of the end of the year. While the annual revenue from ad gained more than 7% to US$224 billion from 2021, Google parent Alphabet made US$59 billion from advertising in the quarter ended December, a decrease of 3.6% from the same period in 2021. That is the first quarterly drop since the Covid-19 pandemic.

The recent news signaled ByteDance sales could roughly match Tencent. Earlier this month, Tencent disclosed total revenue in 2022 fell 1% year-over-year (YoY) to RMB554.55 billion (US$80 billion), the first annual negative growth for the Shenzhen-based company founded in 1998. It was still better than the analysts’ forecast of RMB554.2 billion. Revenue in the fourth quarter edged 1% higher from a year ago to RMB144.95 billion, snapping two consecutive quarters of decline. The chairman and CEO Ma Huateng noted the changes his company made during 2022 such as increase in business efficiency, sharpening focus on core activities positioned it to benefit from, and contribute to, a rebound in China economic growth.

ByteDance management has cautioned growth prospect facing various headlines. The leading edge in content offerings, including Douyin, TikTok, and Toutiao, has diminished over the past year or two, CEO Liang Rubo said in an internal meeting held on March 16 to celebrate ByteDance’s 11th anniversary, according to Chinese tech media outlet 36Kr. “We are not very confident to say our work, either in terms of understanding in business or technical capability, is better than peers in China or the global market, as we are still facing severe competition,” Liang warned. He concluded one of the main goals ByteDance will achieve is to focus on two main businesses-- content offerings and e-commerce.

Another report in mid Mach said G42, an AI and cloud computing technology company founded in Abu Dhabi, recently acquired stakes worth of more than $100 million in ByteDance, valuing the Chinese internet giant at about $220 billion. The valuation has been a big discount to that in last October, when the unlisted company was reportedly valued around $300 billion following the second stock option buyback in 2022. It was also well below a peak of about $460 billion in 2021, when Tiger Global Management said it spent $1.1 billion to take the company’s shares.

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