BYTEDANCE’S TikTok became the first app to surpass US$10 billion in cumulative consumer spending, helping power mobile app sales to a new high in a year revenue from games was down, according to the latest annual report by data.ai.

Video-streaming platforms like TikTok and Disney+ drove an 11 per cent rise in consumer app sales in 2023, showing resilient demand while the games industry dealt with a double-digit sales decline in China that dragged global sales down 2 per cent.

TikTok’s in-app purchases of credit that can be used to tip favoured creators and live streamers accounted for the bulk of its income, and “unlocked the secret to monetisation on mobile”, according to the market researchers, whose services are used by many of the world’s biggest brands to track the performance of their mobile apps and ads.

“Social apps and the creator economy pioneered new pathways to monetisation beyond advertising,” said Lexi Sydow, director of corporate marketing and insights at data.ai. “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 US$1.3 billion as competition ramps up.”

Spending in apps, rather than games, grew as consumers spent more on streaming, user-generated content and dating apps. Still, the bigger revenue driver remained advertising, which rose 8 per cent in 2023 to US$362 billion and accounted for two-thirds of mobile sales. That makes the battle to attract and retain user attention paramount, as data.ai estimates 2024 will bring in US$402 billion in global mobile ad spending.

Consumers again increased their time spent on smartphones – Indonesia ranked highest with over six hours per person per day. The average among the top 10 markets hit five hours of daily app usage, and spending in apps increased by 3 per cent in 2023. South Korea, Brazil, Mexico and Turkey all hit 25 per cent growth or more in consumer app spending for the year, according to data.ai.

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Chinese budget shopping sensations Shein and PDD Holdings’ Temu shot up the download rankings, growing by 140 per cent, with Temu leading downloads across 125 markets.

Elsewhere, the travel and ticketing sectors staged a rebound in popularity and spending as post-pandemic demand for in-person events and experiences boomed.

Artificial intelligence became a key path for attracting new users, with generative AI surging seven-fold and distinct sub-segments emerging around AI chatbots and art generators. Generative AI apps surpassed US$10 million in monthly consumer spending by late 2023.

“This AI growth also fuelled embedded features across virtually all mobile sectors, paving the way for a fresh wave of digital innovation,” the data.ai report said. BLOOMBERG