TikTok slashes revenue target for this year by 20%: FT

November 10, 2022 11:52 pm

TikTok slashed its revenue target by 20%, from a projected $12-$14 billion to about $10 billion, Financial Times reported on Wednesday.

The $2 billion cut in revenue forecasts was announced by TikTok's chief executive, Shou Zi Chew, at a virtual all-hands meeting in September, sources told the FT.

In that meeting, staffers were blamed for not driving enough sales in the areas of advertising and ecommerce.

The macroeconomic downturn has made advertisers more cautious about spending, with tech firms such as Google, Meta, and Snapchat seeing slower or even negative ad revenue growth in the third quarter. TikTok, the hit short video platform owned by ByteDance, has not been immune to the depressing climate.

According to eMarketer, US advertisers are expected to spend $65.3 billion on social media this year, up just 3.6% year-over-year and about 10 times slower than 2021.

Additionally, during the meeting, TikTok employees were told that its parent company, ByteDance, was unlikely to list in Hong Kong this year. The Beijing-headquartered unicorn was valued around $300 billion recently in the private-equity secondary market, down from a peak of around $400 billion reached last year.

Currently, the social platform is aggressively pushing forward its e-commerce in the US, recruiting talents in warehousing, fulfillment, marketing, and more. However, it could be a bumpy road - given its lackluster performance in the UK - its first tryout in developed markets.

Social commerce is expected to make up only around 5% of total e-commerce sales in the US this year, compared to nearly 16% in China, according to Insider Intelligence.