According to reports, TikTok reduced its projected global ad revenue for 2022 by $2 billion. The CEO of the ByteDance-owned app, Shou Zi Chew, informed a small group of staff members. He reported that the company’s expectation for ad income had decreased from $12 billion to $10 billion due to declining sales.
According to people who spoke to a news panel, TikTok CEO Shou Zi Chew criticized employees for doing poorly. Even as the company burned money on inflated salaries and flying teams across countries for costly parties, which led to decreased estimates.
Chew criticized staff members during a virtual all-hands meeting in late September. He scolded them for declining sales in e-commerce and advertising, the two primary sources of income for TikTok.
But according to reports, TikTok wasted money on expensive parties. Such as the $2.9 million internal event called “Evolve” was held in Spain.
Additionally, it is said that the business flew entire teams around the globe for these events. For example, the US sales staff traveled alone to New Orleans during the second half of 2022. At the same time, workers in Europe partied in Barcelona. Meanwhile, the Latin American team traveled to Sao Paulo.
The fact that TikTok is spending money on expensive compensation may also be the cause of its declining revenue targets. According to the four sources who talked with a news panel, TikTok lures employees away from competitors by paying colossal compensation. Some entry-level professionals are now earning six figures as a result.
TikTok on other hand launches TikTok’s app
The in-app shopping function of TikTok is now starting to roll out in the US market. As first reported by Semafor, the business began testing its TikTok Shop function this week, which enables users to make purchases straight from the TikTok app.
Although TikTok has long been focused on e-commerce. The US has started slower than other continents like Asia. After a relatively tricky start earlier this year, the company is getting ready to introduce live shopping features to the US. The company has previously experimented with a Shopify shopping tab.
Although Laura Perez, a spokesman for TikTok, confirmed that the new feature is being tested in the US. She gave no further information. Before this, it had only been available in the UK, Indonesia, and other Southeast Asian nations. Semafor claims that TikTok is distributing invitations to US companies to participate in the new shopping scheme, with access to foreign retailers following.
To provide the functionality to consumers for the holiday season, it has also been considering live shopping in the US. Additionally, the platform has been hiring for positions at US-based fulfillment centers that would handle client returns and warehousing.
