TikTok: Super App or Supernova?

TikTok: Super App or Supernova?

by Bloomberg Stocks
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November 30, 2021

TikTok’s parent company, ByteDance, was launched in 2012 around the simple idea of helping users entertain themselves on their smartphones while on the Beijing Subway. By May 2020, TikTok operated in 155 countries and, together with Douyin (its China app), it had roughly one billion monthly active users, placing it in the top ranks of digital platforms globally.

Some industry experts argued that it was the first consumer app operating at scale where artificial intelligence (or AI) was the product. But TikTok had drawn the attention of competitors, regulators, and politicians — especially in the U.S., where commercial success was critical to its long-term enterprise value. With less than two percent of its global revenue generated in the U.S., should the company continue to drive growth there or focus on monetizing that audience by introducing revenue generating activities like advertising? Would TikTok become the first “Super App” with a global footprint or, if it moved too fast, did it run the risk of becoming a supernova that shone brightly only for a passing moment? Harvard Business School senior lecturer Jeffrey Rayport discusses these strategic challenges in his case, “TikTok in 2020: Super App or Supernova?”

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