TikTok has become the first app to soar past $10 billion (£7.9 bn) in user spending in 2023, the year when mobile spending reached a new high.
This is despite games spending being down, according to recent data from data.ai. Popular apps centred around videos like TikTok and Disney+ have helped to drive an 11 per cent rise in consumer app sales in 2023.
For TikTok, in-app spending can do a multitude of things, from tipping creators you like to buying viral products.
For many in-app creators, it's a vital part of their income. Even without getting directly tipped, users can also earn income from a percentage of sales made on products bought via links shared on their videos.
Linking to products has never been easier than on TikTok either, with yellow buttons at the bottom of videos highlighting where you can click through to TikTok Shop and start browsing.
“Social apps and the creator economy pioneered new pathways to monetization beyond advertising,” said Lexi Sydow, director of corporate marketing and insights at data.ai told Bloomberg. “TikTok laid the groundwork through its content-creator tipping mechanism. In 2024, direct consumer monetisation in social apps through in-app purchases is set to grow 150 per cent to $1.3 billion [£1 bn] as competition ramps up.”
As users became more accustomed to spending money on streaming, app spending rose alongside it. Nonetheless, the biggest revenue driver for apps, according to data.ai, is advertising, which rose to eight per cent of revenue in 2023. That accounts for a massive two-thirds of mobile sales.
Looking ahead for 2024, data.ai estimates the next year will bring in $402 billion (£316 bn) in global mobile ad spending.
It's perhaps no surprise that in-app spending has gone up, with people spending more time than ever on their phones and therefore their apps. British users, for example, spent 27 hours on their phones per month in 2023.
In other markets, this is even higher, with Indonesia ranked highest at more than six hours per person per day.
