BEIJING, November 17 (TMTPost)— Recent report suggested ByteDance Ltd. is well on the track to overtak another Chinese internet heavyweight Tencent Holdings Ltd. by sales.

Credit:Visual China

ByteDance's revenue in the second quarter jumped 40% year-over-year (YoY) to US$29 billion, The Information cited people familiar with the figures. If the data is accurate, TikTok parent should have delivered a much robust growth and its quarterly sales have overtaken Tencent. Tencent's revenue rose 11% YoY to RMB149.2 billion (US$20.6 billion) in the quarter ended June 30, missing the Wall Street expectation of RMB152.021 billion.

ByteDance is also closing gap with Meta Platforms, Inc. The U.S. internet giant posted revenue of US$32 billion with an 11% YoY increase in the second quarter. The report attributed its revenue achievement to advertising and e-commerce. ByteDance recorded revenue of US$54 billion in the first half of the year, about 89% of Meta's in the same period, according to the report.

In the June quarter, markets outside China contributed US$5.8 billion, or about 20% of ByteDance's total revenue, and the most majority came from TikTok, which likely generated at least US$5 billion, The Information reported. The U.S. tech media outlet noted that while ByteDance gets a bulk of revenue from China, where it operates TikTok's sister app Douyin, overseas operations are helping drive its growth.

The Information has revealed overseas businesses, especially TikTok, are becoming more important for ByteDance, and Douyin's e-commerce is one of its revenue pillars last year. Its report in August said the company recorded revenue of US$85 billion last year with a 38% yearly increase, while revenue from China grew to US $69 billion with at growth rate of 25%, about one third of annual growth for the year 2021, as growth in the market had slowed to 68% that year, down from rates of 150% and 105% in 2019 and 2020 respectively. In comparison, TikTok as well as video games, softwares and other businesses overseas contributed US$16 billion last year, more than doubling US $6.5 billion of sales in 2021. These overseas operations only generated US$1.2 billion in year 2020.

At an internal meeting held on March 16 to celebrate ByteDance's 11th anniversary, the CEO Liang Rubo cautioned that the leading edge in content offerings, including Douyin, TikTok, and Toutiao, has diminished over the past year or two. "We are not very confident to say our work, either in terms of understanding in business or technical capability, is better than peers in China or the global market, as we are still facing severe competition," Liang said. He concluded one of the main goals ByteDance will achieve is to focus on two main businesses-- content offerings and e-commerce.

ByteDance was reported in April that most of its growth came from its core advertising business in China, which generated about US$10 billion, approximately 2.5 times greater than the revenue of the business in 2021. It also said the e-commerce gross merchandise volume (GMV) at Douyin had a strong 76% growth to RMB1.41 trillion ($195 billion).

The growth that Douyin revealed later was even stronger. Douyin platform had a growth of 80% in gross merchandise volume (GMV) last year, and out of the annual volumes, the mall GMV increased 277% and GMV from the e-commerce search up 159%, Wei Wenwen, president of Douyin's e-commerce unit, said at Douyin's Ecosystem Conference held in May. Wei said more than 30 per cent of the total GMV came from the "marketplace" channel. She added that the company will invest RMB10 billion this year to help merchants grow their business on the platform.