Here is Zhang Yiming, who became the richest man in China in 8 years… How can TikTok bring in so much money?

News JVTech Here is Zhang Yiming, who became the richest man in China in 8 years… How can TikTok bring in so much money?

The richest man in China

The meteoric rise of TikTok, the video application that has become a global phenomenon, has propelled its creator, Zhang Yiming, to the pinnacle of wealth in China. According to the Hurun Research Institute, his fortune now stands at $49.3 billion, a dizzying increase of 43% compared to 2023. A feat all the more remarkable given that it was accomplished in just eight years, since the creation of ByteDance, the parent company of TikTok, in 2015. But how could a simple video sharing application generate such wealth? The story of Zhang Yiming and his digital empire is a fascinating illustration of the power of innovation, algorithm and an aggressive global expansion strategy.

Zhang Yiming, 41, stepped down as CEO of ByteDance in 2021but still holds around 20% of the company’s shares. This minority stake, combined with the exponential growth of TikTok, largely explains its colossal fortune. The application, which has more than a billion monthly active users worldwide, has become a veritable revenue-generating machine, mainly through advertising.

TikTok’s business model is based on an extremely sophisticated algorithm that analyzes user preferences and offers them a personalized feed of short, attention-grabbing videos. This ultra-precise personalization allows for extremely effective advertising targeting, attracting advertisers from all over the world. Brands can thus reach very specific customer segments, maximizing the impact of their advertising campaigns and justifying significant investments. Additionally, TikTok has integrated e-commerce featuresallowing users to purchase products directly through the app, opening up a huge new revenue stream.

A genius social network

The incredible success of TikTok, and consequently the enrichment of Zhang Yiming, contrasts with the difficulties encountered by other sectors of the Chinese economy. The Hurun report also highlights that the list of the richest people in China has shrunk for the third year in a row, due to a difficult economic and stock market context. Only 30% of people on the list saw their wealth increase, while the others recorded a decline. Rupert Hoogewerf, chairman of Hurun, notes that sectors like green energy, including solar panel and lithium battery makers, have had a difficult year facing increased competition and uncertainties over tariffs. In this context, the performance of ByteDance and TikTok appears all the more exceptional.

However, the success of TikTok is not without raising concerns, particularly in the United States. ByteDance’s alleged ties to the Chinese government are at the heart of an intense political and security debate. Washington fears that Beijing could use the app to access US user data or influence public opinion. Despite denials from ByteDance, which asserts its independence from the Chinese government, the United States is threatening to ban TikTok on its territory by January 2025, unless ByteDance sells its American activities. This political pressure, while significant, has not dampened ByteDance’s profit growth globally, which rose 60% last year.

The story of Zhang Yiming and TikTok is a striking example of how quickly the global economic landscape can be transformed by technological innovation. In less than a decade, a simple mobile app has become an entertainment and advertising giant, generating billions of dollars in revenue and propelling its creator to become one of the richest men in the world. The future of TikTok, however, remains uncertain, facing major geopolitical challenges. The company’s ability to navigate these murky waters will determine whether the upward trajectory of Zhang Yiming and his digital empire continues.