ByteDance profit surges 60% in sign of resilience

ByteDance’s profit surged by roughly 60 per cent last year, outpacing the growth of online peers Tencent Holdings and Alibaba Group Holding, in a sign of the TikTok owner’s resilience amid an economic downturn.

Earnings before interest, tax, depreciation and amortisation jumped to more than US$40 billion from US$25 billion in 2022, according to people familiar with the matter, who asked not to be named. The world’s most valuable start-up also grew sales to nearly US$120 billion from US$80 billion, the sources said.

The results mark the first time ByteDance has overtaken arch rival Tencent in revenue and profit as it leveraged its popular short-video platforms to expand into international e-commerce.

While ByteDance’s internal figures have not been independently audited, they suggest it became one of the world’s fastest-growing tech giants in 2023.

A ByteDance representative did not respond to a request for comment.

The owner of TikTok and its domestic twin, Douyin, last year cemented its position as one of China’s internet leaders, alongside Tencent and Alibaba, which have both struggled to rekindle growth at a time of economic uncertainty. Alibaba owns the Post.

In the domestic market, Douyin is morphing into an all-inone platform akin to Tencent’s WeChat, with its added features encroaching on Alibaba’s e-commerce turf and competing with Meituan for food delivery orders.

Even with the strong results, ByteDance decided to overhaul management of its China operations in February, with Kelly Zhang stepping down from the chief executive role without plans for appointing a successor.

The roll-out of TikTok Shop in markets like the United States and Southeast Asia has unlocked new revenue sources beyond digital marketing. TikTok is seeking to grow its e-commerce business tenfold this year in the US, where it has 170 million users.

That is despite TikTok’s existential crisis in its most lucrative market. In March, the US House of Representatives passed a bill to ban TikTok in the country unless ByteDance sells it, though the measure faces a less certain outcome in the Senate.

ByteDance has started to unwind risky bets in recent months. It has cut hundreds of jobs at its gaming development and enterprise software units, which dragged profitability and failed to live up to their promise.