WSJ: TikTok’s Still Ticking, but Growth Is Down

(Photo Illustration by Drew Angerer/Getty Images)

If the House bill to forcing TikTok to be sold from its China-tied owner ByteDance or face a U.S. ban was not headwinds enough, the youthful social media app has already been struggling to maintain growth.

Its users are aging out of the phenomenon that once made it a startup darling and Meta/Facebook’s Instagram Reels is gaining momentum in the marketplace, The Wall Street Journal reported Sunday.

“The generation that started growing up with TikTok, they’re growing up and becoming adult consumers,” Futurum Group executive Daniel Newman told the Journal.

The report comes at a tenuous time as the sagging user growth and increased competition can be a drag on its potential sale price if the Senate votes to pass the House bill. I

However, many Democrats and some Republicans are unlikely to vote for a bill that would ban a popular social media app in an election year.

The TikTok user growth has stagnated for the first time as the number of new users dwindles and the number of departed users increases.

Not only are TikTokers aging out, but they have also grown disenchanted with the peddling of e-commerce advertisements, according to the report.

“How do we opt out of TikTok Shop videos? I don’t want to see them anymore,” a TikTok creator with 21 million followers, Brody Wellmaker, said in a recent video on the app. “I’m not going to shop on TikTok Shop. I’m going to shop on Amazon. I want my For You page back the way that it was.”

TikTok still has 170 million users in the U.S., but Instagram Reels is cutting into the market share.

“TikTok is and continues to be the premier platform for millions of users, creators, and advertisers,” a TikTok spokesman told the Journal.

Neither TikTok nor ByteDance is publicly traded, so financial and user data is not released, but the amount of departing users is surpassing the new user totals, according to mobile analytics firm Data.ai.

TikTok remains unprofitable, too, as it is coming down from its peak engagement in the U.S., further complicating a potential sale.

Former Trump administration Treasury Secretary Steven Mnuchin is among those rumored to be putting together a bid, so negative information on the TikTok base could make a purchase less pricey.

The Trump administration had once sought to ban TikTok in the U.S. due to concerns of potential forced technology transfer to the Chinese Communist Party, leaving Americans’ private data at risk.

Despite his campaign having used the app to attract young voters, President Joe Biden has stated publicly he would sign a sale-or-ban TikTok bill if the Senate passed it and sent it to his desk.